The underlying premise premise is that a transmission line across time zones can be seen as virtual storage… you “charge” by sending power to the other time zone/region, and discharge by bringing it from the other region.

Figuring out just how long a wire you need to get somewhere that the power supply/demand balance is sufficiently different to enable this technique is a judgment call, but I figured 1000 miles (one time zone) was about right.

My intent was that people like you would do exactly what you did: get better data and make more accurate calculations of EIRR for comparing energy technologies as a supplement to EROI.

Are these numbers just for getting coal/gas out of the ground? I find it hard to believe that after transport, flue scrubbing and other conversion inefficiency you’d still have anything like the EROEIs and EIRRs you’re showing for coal and gas once it’s been turned into electricity.

On the other hand, I didn’t find a lot of data for coal- or gas-fired generation so I am willing to be corrected. If you or anyone else has sources for different figures, please post them in the comments here or at the oCo carbon blog.

The economics of energy investment follows the same rules. For example, in order to understand the economics of biofuel production one must consider the opportunity cost of all of the required inputs of finite resource such as farm land, irrigation water, labor, etc. Yes, the input of energy must also be considered, although this energy should be counted as detraction from profit rather than as a cost. Properly speaking the production of energy does not have an energy cost. If I manufacture some new kind of electronic toy, the production of this product has an energy cost because one of two energy related outcomes must occur:

1. Some energy producer must produce extra energy in order to allow my manfacturing process to function.

2. Some other economic producer must give up energy in order to allow my manufacturing process to function.

However, if I use energy to produce energy and I have a postive energy balance, neither of above energy outcomes occurs. The energy I consume must be subtracted from my gross output in order to calculate my energy profit, but no energy cost to the larger economy in incurred. The real cost of producing my net output is cost of the non-energy resources consumed such as land, irrigation water, labor etc.

Of course EROEI is qualitatively correlated to total resource costs. Energy producing processes with high EROEI tend to have low resource costs and energy producing processes low EROEI tend to have high resource costs. In fact in the limit that EROEI approaches 1 the resources cost approach infinity since larger and larger amounts of resources must be invested to produce 1 unit of useful (or net) energy.

However, I believe that the resource cost intensity of net energy production is a more fundamental concept than EROEI. For example if one is used to thinking in terms of resource costs then it is immediately clear that higher EROEI water cooled CSP plants in the desert are going to lose out to lower EROEI air cooled ones because of the high opportunity costs of water consumption.

One question though: are the data in the bubble chart just the SciAm data? The fossil fuel ones seem a long way off what I have found in the literature. Coal fired power stations seem to average at an EROEI of around 5.5 (1.5 with CCS) and an EIRR of 17% (8% with CCS).

However, if you want to add complexity, such as riskiness of *energy* flows, and project size, I agree that ENPV will be the way to go.

Financing a nuclear plant is a lot tougher and costlier than financing a wind plant these days and thus the wind plant could be a good bet even with a lower EIRR. If you consider power purchase agreements or the fact that the plant’s output is roughly inflation indexed), it seems like the project risk is the major cost-of-capital factor.

I know it isn’t a direct mapping, but it seems like NPV might be a better match, since you could include a discount rate that accounts for the riskiness of a project’s cashflows. Not sure how you normalize it all though!