Energy return on investment (EROI) is a ratio of the energy obtained in relation to the energy used to extract/produce it. The EROI of fossil fuels is globally decreasing. What do the declining EROIs of energy sources imply for society as a whole? We answer this question by proposing a novel EROI measure that describes, through one parameter, the efficiency of a society in managing energy resources over time. Our comprehensive societal EROI measure was developed by (1) expanding the boundaries of the analysis up to the useful stage; (2) estimating the amount of energy embodied in the energy-converting capital; (3) considering non-conventional sources such as the muscle work of humans and draught animals; and (4) considering the influence of imported and exported energy. We computed the new EROI for Portugal as a case study. We find a considerably lower EROI value, at around 3, compared to those currently available, which is stable over a long-time range (1960–2014). This suggests an independence of EROI from economic growth. When estimated at the final stage, using conventional methods (i.e., without applying the four novelties here introduced), we find a declining societal EROI. Therefore, our results imply that the production of new and more efficient final-to-useful energy converting capital has historically kept societal EROI around a stable value by offsetting the effects of the changing returns of energy sources at the primary and final stages. This will be crucial in the successful transition to renewables.

Reducing the energy intensity of economies is key to meeting sustainable development goals. In the past, energy intensity has generally decreased or has shown inverted U-shape patterns. However, most global energy scenarios project unrealistically increasing relative decoupling rates of primary and final energy when compared to the observed historical trends. Here, we develop a final energy intensity decomposition which considers both productive and non-productive sectors, includes both traditional and commercial sources, and uses the exergy metric to aggregate different energy flows. We study the Portuguese economy between 1960 and 2014, a period of major energy and economic transitions. First, we find that the strong decrease of final energy intensity during the period of highest economic growth (1960–1974) is mainly driven by the following: (1) the efficiency increase in the residential sector, due to the transition from traditional sources (firewood) to electricity; (2) the relatively slow growth of energy use in the residential sector; and (3) the efficiency improvements in the productive sectors. We find that the second factor was determined by the fact that increasing per capita economic consumption was not channeled through private energy use. Second, excluding the last decade, private transportation had a growing effect on final energy intensity throughout the whole time range. Overall, we find that, essentially, remarkable technical improvements in terms of increasing final-to-useful energy efficiency made possible a relative decoupling at the final stage.

The adaptation of the energy return on investment (EROI) measure to the societal level has long been the subject of debate within net energy analysis (NEA). Recent advances, such as the application in calculation of EROI at the useful stage and new empirical studies, have enabled the discussion to move forward. This chapter presents the challenges of using NEA at the societal level and establishes the rigorous methodological requirements for such an application. The first comprehensive measure of EROI which moves the analysis to the useful stage, considers energy trade and muscle work, and includes all capital investments at a national scope, is here introduced. With a step-by-step definition of more and more refined calculations of societal EROI, it is possible to fully understand its real limits and historical trends. <!----> <!----> <!----> <!---->