Energy storage investment return indicators

What is energy return on investment (EROI)?

A common metric to quantify the net energy returns of a given energy system is the energy return on investment (EROI), defined as the ratio of the energy delivered divided by the energy invested in the considered energy system 3.

Are estimated EROIs a power return on investment?

As we use yearly energy flows (annual-flow framework) instead of energy flows over the lifetime of an installation, estimated EROIs may be considered a power return on investment 30.

Are final energy investments included in EROI calculations?

Hence, both final energy purchased and final energy self consumption (when reported in the IEA’s EWEB) are included as final energy investments in our EROI calculations. We note that there is no agreement on how self-consumption energy flows should be accounted for in net energy analysis.

Are fossil fuels useful-stage energy returns on investment (EROIs) low?

We estimate fossil fuelsʼ useful-stage energy returns on investment (EROIs) over the period 1971–2020, globally and nationally, and disaggregate EROIs by end use. We find that fossil fuelsʼ useful-stage EROIs (~3.5:1) are considerably lower than at the final stage (~8.5:1), due to low final-to-useful efficiencies.

Is battery energy storage a good investment?

There are signs of life among important new and emerging technologies, where absolute investment remains relatively small but growth rates are high. Investment in battery energy storage is hitting new highs and is expected to more than double to reach almost USD 20 billion in 2022.

What is the growth rate of industrial energy storage?

The majority of the growth is due to forklifts (8% CAGR). UPS and data centers show moderate growth (4% CAGR) and telecom backup battery demand shows the lowest growth level (2% CAGR) through 2030. Figure 8. Projected global industrial energy storage deployments by application