Assessment of the global transition to low-carbon energy from the lens of EROI- Rajesh
Business Context
With the rapidly growing carbon offset projects across the world in the compliance and the voluntary carbon market, it becomes crucial to objectively and comprehensively analyse the real positive impact of such projects. Choosing a project to fund can be tricky and an impact assessment will help investors and companies to reliably support high impact projects in the carbon offset market.
Hence, Rajesh’s team studied and analysed multiple indicators to assess the impact of various projects and compare them.
Key observations
→ Energy transition is not going to be smooth, hence precautionary way is to reduce our fossil fuels consumption until renewables +storage reaches a certain threshold level of global energy coverage.
→ Important to assess emission intensity and Energy return on investment (EROI) in conjunction for our renewables to see whether they meet our near future energy workloads.
→ We have multiple competing global energy workloads: Raise standard of living in developing countries, industrial carbon removal projects, adaptation for extreme climate events, AI development and geopolitical wars.
→ Energy transition away from fossil fuels is a must to meet climate targets but renewable infrastructure still not ready to give consistently high EROI like fossil fuels due to intermittency. Reliable long duration grid storage is missing.
Notes-
EROI is defined as ratio of energy output to energy input or can be understood as ratio of energy returned to energy invested for any energy source. Naturally a higher EROI is desirable.
The usefulness of EROI as a metric has its limitations and criticism within the scientific community. EROI is mostly criticized on its ‘time factor’ deficiency as it doesn’t shine light on the energy payback time, which is commonly used to assess renewable energy options.
Process
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