Energy Sources: History, Selection, and Transitions

Net Returns and Cost


Net energy analysis is used to evaluate and compare energy sources and systems (172). This is a method to calculate the energy return on investment (EROI).              

EROI = quantity of energy supplied
quantity of energy used in supply process



An article by Cleveland et al. (173) includes a table of EROI estimates for the production and delivery of fuel sources in 1984 (Table 2). From these figures, it is evident that fossil fuel production is highly profitable because very little energy is required to extract them and they have high energy densities. The EROI values of electrical generation by energy source are shown in Figure 13. Many factors may be included in these types of estimates: construction and operation costs of fuel extraction, refineries, and power plants; regional differences in source supply and prices; variable price over time and with respect to other fuels; pollution controls; and waste handling.


Table 2. Energy returns on investment (EROI) estimates for source production.



Oil and gas (domestic wellhead)



discoveries >100.0

production 23.0, discoveries 8.0

Coal mine (mine mouth)





Coal liquidification

0.5 to 8.2

Oil shale

0.7 to 13.3

Ethanol (sugar cane)


0.8 to 1.7


Methanol (wood)


Solar space heat (with fossil backup)

           flat-plate collector

           concentrating collector



Electrical production


         U.S. average

         Western surface coal

               No scrubbers









           Nuclear (light-water reactor)



           Power tower



1.7 to 10.0


           Liquid dominated

           Hot dry rock


1.9 to 13.0

From: Cleveland, Cutler J., Robert Costanza, Charles A.S. Hall, Robert Kaufmann. “Energy and the U.S. economy: A biophysical perspective.” (1984) Science, 225:890-897.


Figure 13. Energy return on investment (EROI) estimates for electrical generation.

Energy sources may also be compared to one another by cost, either by price per Btu or by kWh as shown in Tables 3 and 4. These values will change (particularly for the newer sources) as technologies progress and scaling up continues. Other points to consider when comparing sources for electrical generation are plant efficiency, plant location, and transmission. Much of the energy contained in fossil fuels is lost as waste heat during electrical generation. The efficiency of a coal-fired plant, for example may be from 30 to 40 percent. Electrical energy lost in transmission (power plant to substation) and distribution (substation to end users) can be substantial. Only one-third of the energy used to generate electricity in the U.S. actually reaches the consumer in the form of electricity (6). This loss can be reduced by the use of distributed power, which is produced near the consumer by small generating systems: one of the attributes of wind, solar, biomass, and small hydroelectric systems.

Table 3. Average energy prices to all users (residential, commercial, industrial, and transportation) by source in 2009 (in 2007 dollars per million Btu).
Coal 1.96
Natural gas 8.24
Jet fuel 14.63
Liquified petroleum gases 17.70
Distallate fuel oil 18.55
Motor gasoline 18.92
Electricity 28.28
E85 33.59
Table 4. Estimates of cost of electricity per kilowatthour by source.
Source Cost per kilowatthour in cents
Coal 2 - 5
Natural gas 2.8 – 12
Landfill gas 2.9 – 3.6
Wind 3.5 - 5
Manure 3.7 – 5.4
Geothermal 4.5 – 7.5
Solar thermal (large array) 16
Photovoltaic (solar farms)
                      (roof tops)
19 – 40
From various sources.









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