Economic Trend Report: Energy Descent, Transition and Alternatives to 2050

For the past few months, I’ve focused the time available for Beyond this Brief Anomaly on background research and modelling aimed at testing more rigorously some of the conclusions towards which the inquiry has pointed so far. This has come at the cost of keeping things active here though. I’m planning to share some of the results of this work shortly. In the meantime, I was recently looking back over a piece of work on energy transition as a key economic trend that I did last year for a client. It occurred to me that it provides a remarkably good summary of the inquiry’s findings to date, and sets out many of the conclusions that I’ve been stress testing behind the scenes. The report below is a version of the original briefing paper revised slightly for a more general audience than the original. It was last updated in November 2014, but for the most part— save perhaps for updated global oil production data and the post-price plunge tight oil situation in the USA—it continues to be relevant today. Also, the brief comments in relation to battery storage may, to some readers at least, seem rather at odds with the popular view that has gained such a significant boost in recent months. More on that when I report on the background work I’ve been up to.

Download the report pdf.

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EROI and the limits of conventional feasibility assessment—Part 3: Intermittency & seasonal variation

In the previous post in this sequence, I developed the concept of power return on investment as a complementary indicator to energy return on investment (EROI) for assessing the viability of wind and solar PV as alternatives to thermal electricity generation. I used as my departure point for this an article in which Ioannis Kessides and David Wade introduce a dynamic approach to EROI analysis.[1] Specifically, I drew on an illustrative example that they present, based on IEA data for coal-fired thermal and wind electricity generation in Japan, showing how the time required for coal and wind installations to provide sufficient energy to emplace additional generating capacity equal to their own can differ by an order of magnitude even where the EROI for coal and wind is identical. Given that the data on which this example was based was from prior to 2002, both the doubling time in Kessides & Wade’s example and the power return on investment in the extended analysis would likely be improved if up-to-date figures for emplacement energy and capacity factor were substituted for those from the IEA study. Unfortunately, this goes only a limited way to mitigating the central issue in terms of “real world” considerations. Continue reading

EROI and the limits of conventional feasibility assessment—Part 2: Stocks, flows and power return on investment

Update, 24 July 2015: while doing some background work for a forthcoming post that draws on data presented here, I reconsidered the best basis to use for the PV comparison. The post has now been revised to reflect my updated thinking, specifically using a higher EROI for PV of 4.17:1, rather than the original of 2.45:1, by considering only a subset of Prieto and Hall’s energy costs. In the course of making this change, I also discovered an error in the original calculation, in the ratio of emplacement energy to operating & maintenance energy for PV (relatively minor impact only, from 0.59 to 0.55). This is also corrected here.


An important principle to bear in mind for inquiring into the ways that energy-related considerations influence human societies is that, by and large, economies are dependent for their present functioning not on the total stocks of energy sources they might have at their disposal, but on the current rate at which energy sources are supplied and utilised. This is a key distinction in understanding the phenomenon of peak oil. “Peak oil” for a given field or territory is taken to have occurred at the point in time for which the production rate for petroleum—appropriately defined, i.e. by grade or composition—reaches a maximum, and thereafter declines. But at such a time, as much as half of the ultimate resource may still be available. Peak oil doesn’t imply that we’re on the brink of “running out of oil”. What it means is that the production rate is at the highest level that will ever be achieved. It is the change in rate that is central for understanding the implications of the phenomenon for future social prospects, as a declining aggregate oil production rate (i.e. where a shortfall from one region cannot be compensated by increased production from others) implies greatly foreshortened prospects for further growth in the non-energy related economic activity enabled by that production, and in fact very likely implies commensurate economic contraction. The same principle applies to any resource that is ultimately stock-limited, but for which it is the supply rate upon which the present nature of the economic activity enabled by that resource depends. Continue reading

EROI and the limits of conventional feasibility assessment—Part 1: The technical potential for renewables

A fundamental requirement that any energy supply system must satisfy for economic viability is a sufficiently high energy return on energy investment (EROI) for manufacturing, installing, operating and maintaining the system over its operating life. The question of what constitutes a sufficient return depends on the nature of the economy and society that the energy supply system is intended to support—while an EROI <1 implies a net energy sink, an EROI >1 does not automatically entail viability. Consider the limiting case in which net energy supply is zero, i.e. EROI =1. This would entail an economy consisting entirely of an energy supply sector that supported itself, but allowed for no economic activity beyond this. It’s certainly possible to imagine a functional economy along such lines, but it implies that every person living in such a society must dedicate their life to and focus all of their attention and effort on providing for the subsistence energy needs of their economic system. Such an economic system would serve no purpose beyond its own perpetuation; citizens of such a society might very well consider their lives to constitute a form of slavery to their economy. Continue reading

Worldviews and energy futures

In last week’s post I linked to an article published recently in the Journal of Futures Studies (JFS) in which I look at the relationship between the questions that we ask about energy futures, what it is that we then take into account as relevant in exploring them, and the possible avenues for action that are apparent to us in the present as a result. As I pointed out, that article acts as a pretty good overview of the inquiry here at Beyond this Brief Anomaly, and also prepares the way for the phase into which this will head shortly. Before embarking on this next phase, it occurred to me that it might be worth dusting off some earlier work on which the JFS article was based that goes a little further in sketching out the background context for the inquiry, and that will help with locating the areas covered to date within that broader context. Continue reading

Responding to the Millennium Project’s Energy Challenge

An article providing a broad overview of the territory being explored at Beyond this Brief Anomaly has just has just been published in the Journal of Futures Studies (JFS):

Floyd, J. 2012, ‘Responding to the Millennium Project’s Energy Challenge: a futurist’s perspective’, vol. 16, no. 4, pp.21-32.

The journal is open access—click on the link above to open the pdf version on the JFS website. The article is part of a special issue of JFS comprising contributions from the Australasian Node of the Millennium Project for the 2011 State of the Future Report. Other articles from colleagues in the Australian futures and foresight practitioner community are available here. Continue reading

Energy transitions, feasibility studies and the limits of abstraction: the case for a (soft) systems approach

As noted in my introductory post, over the past five years a number of prominent reports have concluded that transition from fossil-fuelled to renewably-powered economies is technically and economically feasible on national and even global scales, without need for change in the cultural landscape. They conclude that entire national energy infrastructures can be replaced—over periods ranging from 10 to 40 years—with little need for us to adjust our socio-economic expectations. In fact, given the roles assumed for large-scale centralised infrastructure in these studies, relatively few of us would need to be involved in the actual implementation, let alone decision making, planning and co-ordination. A common message seems to be that we shouldn’t expect to be inconvenienced by these technologically significant but socially, culturally and economically benign changes.

To most observers, presentation of such findings in the language of technical and economic feasibility may pass without much remark. From an engineer’s perspective though, it raises a flag. Technical and economic feasibility have quite a specific meaning in engineering parlance—in essence, this means that a) sufficient work has been done to be confident that overall cost will fall within a specified range; and b) that following from this, financiers’ expectations with respect to return on investment can be met. To be clear, none of the studies that I’m thinking of actually make such claims directly—this is just what is usually expected for infrastructure projects on the scale of millions through to multiple billions of dollars, prior to commencing engineering design. Given the enormous scale of the proposals we’re talking about—from hundreds of billions of dollars upwards—then they’d surely be expected to conform with established conventions in this respect. At least, this would be the case if approached as top-down, centrally-administered engineering projects. You may well query, though, why I’d assume such an approach. Given the unprecedented nature and scale of the proposals perhaps they would demand a fundamentally different approach to that which suits, say, construction of a single power station. That’s a question I’ll return to in due course. For now though, I’m simply taking my cue from the nature of the reports themselves, and the general method on which they are based: aggregation of generic public-domain data from a wide range of primary and secondary sources, along with original work involving a variety of desk-based modelling techniques.
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