The Great Simplification with Nate Hagens - Iñigo Capellán Pérez: "Net Energy Analysis: Through a Systems Lens"

Episode Date: July 5, 2023

On this episode, global systems researcher Iñigo Capellán Pérez joins Nate to discuss net energy analysis, and its use as a tool in analyzing the feasibility of an entire system. While net energy analysis is complex and polarized, some form of it will be necessary to guide society into a resource-constrained future. The energy outlook of a technology changes when scaled up to meet the needs of a larger society.  Many models and EROI analyses that fail to take a system-wide view and only look at a single technology use case, only reflect the partial net energy story. When looking at the huge scale-up needed for 'solutions' such as Green Growth and Net Zero Transitions, do the hopes for renewable technologies hold up the lifestyles we've come to expect over the last century of fossil surplus? Do our policymakers and leaders have the full picture to make competent decisions? How can we best use these tools to make creative responses to guide us through a Great Simplification? About Iñigo Capellán Pérez: Iñigo is an Industrial Engineer currently doing research with The Group of Energy, Economy and Systems Dynamics (GEEDS) of the University of Valladolid. He holds a Master degree in Electric Energy and Sustainable Development and a PhD in Economics with his dissertation on "Development and Application of Environmental Integrated Assessment Modelling towards Sustainability" at the University of the Basque Country. His research interests focus on the analysis and modeling of the energy-economy-environment systems, the transition to renewable energies in the context of the depletion of fossil fuels and climate mitigation and the technical and social transformations towards sustainability. For Show Notes and More visit:  https://www.thegreatsimplification.com/episode/78-iigo-capelln-prez To watch this video episode on YouTube: https://youtu.be/m9VFYTXSwNw

You're listening to The Great Simplification with Nate Higgins. That's me. On this show, we try to explore and simplify what's happening with energy, the economy, the environment, in our society. Together with scientists, experts, and leaders, this show is about understanding the bird's eye view of how everything fits together, where we go from here and what we can do about it as a society and as individuals. Please welcome Enigo Capelan Perez to the Great Simplification. Enigo is an industrial engineer currently doing research at the group of energy economy and systems dynamics at the University of Valladolid in Valladolid, Spain. He holds a master's in electric energy and sustainable development as well as a PhD in economics. I have met with him and his team who are working on systems integration of energy, climate, renewable energy, fossil fuel depletion, and technical and social transformations towards sustainability.

We talked about EROI and the importance of a wide boundary perspective on biophysical analysis. I hope you enjoy this conversation with Enigo Kaplan-Perez. Enigo, good to see you. Hello. Welcome to the Great Simplification podcast. The last time I saw you was in Valladolid when we had a one-day seminar on biophysical economics at your university. Six years ago or something. Yes, pre-COVID for sure.

Yeah. You know, it's interesting. I don't know why this is, and it might be a small sample size, but of the really biophysically aware humans. It seems like one in ten of them live in Spain. Do you have any idea why that might be? I don't know. Maybe because you are more familiar with Spanish people, maybe, and then you know one person and it's easy to know the rest of us. I don't know. It could be. So I think this is your very first podcast. And I've selected I invited you because we met, but because EROI, energy return on investment is what I wrote my PhD

thesis on. And there's a lot of BS and ideology in today's EROI analysis. And your paper, which we're going to talk about, is probably one of the best, clearest, in my opinion, most accurate bird's eye views of the situation. So I really want you to explain a little bit about that. But before we get to that, could you introduce yourself? What is your work? What are you generally working on?

And how did you arrive at this place in your life and your career? Now I am a postdoctoral researcher at the University of Valladoliffe in a research group called Group of Energy, Economy and System Dynamics of the university. and well, what we are basically doing, because we work really in team experience, team work, what we are doing is to try to build system dynamics models that cover all the relevant dimensions in the interface between, let's say, natural and human systems, no?

So these type of models, they have a name in the literature. They are called integrated assessment models. But I can say that we are trying to do modeling, which is, let's say, quite different from a standard IPCC-integrated assessment model. So we are trying to address some of the limitations that this model have. One of the main objectives is to bring more biophysical realities because we think that they are not so biophysically grounded. So the conclusions they extracts they are not so reliable. Well, that's been my experience, too, is the client. modelers themselves are doing the best job they can with a very complex situation,

which is the global climate. But then we add energy, energy systems, money, the economy, individual and aggregate human behavior, geopolitics, and it becomes really complex, really fast. But at a first order, I think, to have, the climate scenarios better tethered to our energy reality is a first step? Well, I think here there are several problems, no, with the existing, let's say, more classical models, no? There are some things that maybe are scientific, other things that are maybe related with the scientific paradigm that we have. So the scientific, there is a scientific paradigm and then even if you have dozens,

of hundreds of Internet Assessment models, you notice that many of them have the same founding hypothesis, no? So you have a false sense of diversity in this sense. And then also you have the problem, or the issue that the IPCC, sorry, the Internet Assessment models from the IPCC, we don't have to forget the IPCC is a United Nations process. So it is embedded in current institutions. We have the governments there and there are research.

There is the research that has shown hope this government can influence the scientific outcomes because the IPCC reports are not purely scientific outcomes. So it's a mix of them. I can maybe enter into detail of some of the most important things. So what you're saying is there's two challenges. One is there's groupthink in the integrated assessment models themselves because they all rely on standard assumptions. And two, is there's a political ceiling on what might be said and understood, which I think applies to a lot of the things in the current human predicament.

Is that correct? Yeah. So, yeah, I'm going to give a couple of examples not to remain so abstract, no? From the point of view, the scientific or general paradigm, the current general paradigm is that energy is very abundant in the world. I'm not now referring to specifically fossils of renewables. Both of them are very abundant. We had this debate some years ago with the peak oil, and now that maybe especially in Europe,

where I am more familiar with the politics, now climate policies are being taken seriously, climate problem. So peak oil issue is a bit less important because we want to get rid of it anyway. But for renewables, we have the same thing, so we always see this figure of one square in the Sahara that is enough to power all the world,

which gives the impression that we have a lot of affordable energy. So this is one scientific paradigm, which has not so much interference, I will say, with institutional framework. But I'm going to give another example where the institutional framework is key. And for anybody familiar with the IPCC scenarios, the APCC framework, we all know that the GDP per capita in the IPCC scenarios is an exogenous assumption.

So, the models need to be built, designed in a way that GDP per capita, let's say, is given. And then the models reply the question, what is the energy mix configuration, I need to have to be able to grow at this rate and so on. So, for example, we build models in which GDP is endogenous, which is what happens in reality. The GDP is the addition of all the consumption of goods and services, blah, blah, blah. So it's endogenous in reality. But because of a institutional framework for which growth is not negotiable,

because even if they have several scenarios in all of them, the GDP per capita grows in all. the region. So this again falls, let's say, diversity. So they're building the house, which is the integrated assessment model from the roof instead of

from the floor foundation. In some sense, yes, they are fitting the request from the institution who wants to use that. So it's true that in the last IPCC report

the I mean the especially the mitigation report the framework and how it is explained and the topics they cover has changed a lot I can also feel there is a generational I don't know in English relief

and a generational shift with more young people interested about more I will say modern topics but still the classical IPCCA the classical integrated assessment models are there. These are models very complex. You need decades to build them. So it's difficult to, let's say, from one day to the other, change them or there is an enormous inertia in this scientific process. So my understanding is that in the integrated assessment models,

there is not a single scenario that has economic growth declining from here until 2100. There are one or two scenarios where growth peaks in 2070 in 45 years from now and then declines into 2100. But still, all of it is growth, net growth from here to 2100. What would happen if the United Nations IPCC or any global governing body produced research that showed declining GDP wouldn't that be so politically huge of a line to cross? Because then the question becomes, oh, if that's going to happen, then maybe energy security becomes more important

than low-carbon progress. What are your thoughts on that in ego? Well, this declining GDP could happen because of two different things. It could be the reflection of, a recession, let's say a catastrophe or a crisis scenario. And for example, our models typically are able to produce this in baseline business as usual scenarios in which there are no strong actions to try to avoid the ecological collapse. Then you get this recession scenarios. So this will be one

one option and the other one will be to have a reduction in GDP because there is implemented an idea of post-growth or de-growth scenario in the sense as I understand it in the sense of a plan reduction of the size of the economy to reduce the environmental footprints but trying to maintain or even increase well-being. So I think from the the one hand politicians in general want to show that they have the control of the situation. So maybe they will not be willing to show these recession scenarios because then people will say would be afraid, and then if they are afraid, they could do things that they will be less controllable. I think this is one part of the story. Another part of the story could be that

it is also, I think that the mainstream is dominated. by the idea of green growth. So last week was the conference Beyond Growth, I think is the official name in the EU, in Brussels. I don't know if the news went to the other side of the ocean. I watched several of the presentations.

Okay. So this is not the first conference about this. There was at least one more. I was present. I don't remember now the year. but this year it seems it's bigger there was the president of the commission von der Leyen in the opening and it's very interesting that there were several high rank staff from the EU commission in the Beyond Growth Conference saying that we need more more green growth no so this I think this is

very very paradigmatic I think also this the growth post-growth ideas are very not known not well known in the mainstream and also they are very easily misrepresented and they don't distinguish sometimes the growth and recession so i think there is a lack of awareness of these ideas in the political policy arena your papers clearly imply that a degrowth scenario is going to happen from your first scenario because of energy and biophysical uh limits not a political choice. And I'd like to get to the one paper that I'm referring to. But maybe as a biophysical analyst, you could first explain, because I don't think I've actually had a guest, you know, you're going to be my 80th episode. I don't have, I haven't had anyone that specifically talked

about energy return on investment and how important it is or how not, important it is. Could you just explain to a lay person that isn't aware of this? What is EROI? Why is it important? How has it been an important indicator for the prosperity of societies and as it declines what it will imply for societies? Okay, yes, I think it's a good idea because this is a concept that sometimes it looks a bit abstract for people who are not familiar with it. So yes, basically ROI is the acronym of energy return on energy invested. And the name is trying to refer to the return of investment from the financial world. And it is basically a ratio between how much energy do you invest to have an energy system,

providing you energy back. So here the idea is that you want to build an energy system that is going to provide you I don't know, let's say 100 energy units over its lifetime, you should have, I mean, this to set up and to build and to manufacture and to run and so on, this energy system should require much less than 100 energy units, because if not, then you have a net loss. So this, which I think for one energy system, is very intuitive, we can extrapolate to the full society.

because it's true that we know that not all the energies have the same quality. So if we have in the society an energy which very high quality, which are very high ROI, we can somehow help or allow that other energies with low ROI can enter into the system. I think the classical example for this is biofuels. biofuels have an energy return on energy investment, which there are between one, two, three. Of course, it depends on climate, it depends on agriculture management practices, but very, very low ROI. This is not scalable to replace, for example, oil, it will reduce a lot of the ROI of the society. So, the ROI is basically an indicator of efficiency also.

And why is this important? Because basically the current society, there is uncertainty in the estimates because it's very difficult to calculate a societal level. But basically we need between 5 and 15 ROI standard in, let's say, industrial modern societies as in the USA or Europe. So we need to be able to get for each energy investment at least 5 or 15, you need. minutes back. What happens if this EROI reduces? It's important here to have in mind that there is not a hard limit for ERI because there was also a debate about which is the minimum EROI to sustain our society. So my understanding and our understanding in the group together with Professor Carlos de Castro, which by the way I forgot to mention because all the EROI work we do together in the group. So just to mention him also, our idea here is that... I know Carlos, but your English is much better, so I invited you, but please give him my regards. Thank you, thank you. I will.

So what I was saying. So the idea is that there is not a hard threshold, because different societal configurations can work with different errors. For example, if we have a system of, I don't know, private transport with no public transport at all, then we are going to spend much more energy on sustaining this network of private transport that if we have a solid public transport. So with less energy, we provide the same energy service. So there is never here a hard threshold, but, of course, there are thermodynamical limitations which are important. So if the ROI tends to decrease, if we want to maintain the same amount of net energy

which corresponds with the consumption of goods and services, food, cooling and heating our houses, producing goods and services in the industry, blah, blah, blah, then we will need more primary energy because we have more losses, no? So for the same amount of net energy, we need more primary energy. If we need more primary energy, this needs two things. More environmental impacts. If we are talking about fossil fuels, more emissions in particular, and if we are talking about renewables,

this means that we are eating a higher part of the cake of the techno-sustainable potential, which is also one of the topics that we work in our team that is very important. Because if we have a sustainable potential for a renewable, of 100 units of energy, if the error decreases a lot, then the primary end, we are going to need a lot of more of it. And if we cannot increase the primary energy, then the amount of discretionary uses for energy, the amount of goods and services that we can enjoy decreases. And this in a growth dominated system is recession. In a de-growth plan system, we could deal with it. Thank you.

that was clear. So you said that the EROI of society, not of an individual oil or solar or geothermal technology, but for society needs to be five to 15. So let's just talk about the five. So if the EROI of society was five, that would mean that if we had 100 units of energy for society, or a million or whatever it would be, that 20% of that energy would be used by the refining discovery,

extraction, distribution of energy to the rest of society, meaning that 80% of our total energy only would be available for hospitals and air travel and shopping centers and universities. Is that right? Yes, the interpretation is correct. The only thing maybe I forgot to mention before is the issue of boundaries, because I'm talking about ROI, but ROI we need to specify which boundary. When I mention 5 to 15, it will be a ROI standard,

which is the energy return on energy investment at the generation plant. So this does not include transport, for example, transport of energy, which is a very relevant part of the cake also. What does that mean? If we will take as reference, the eroy point of use, then the thresholds reduce. It would not be 5.15,

but I don't want to say numbers because I don't have the calculation, but it will be much lower. It would be three to nine or something like that. Who knows? Yes, we will need to do proper calculations. but yes, it will be lower. So here I'm talking in EROA standard terms.

Okay. So in the EROI of five, in the standard terms, actually a greater percentage than 20% would be allocated to the energy sector if you include transports and distribution and everything. This is what I refer to as a Mordor economy is as as we grow our growth. gross energy and our net energy stays flat or declines. It's good for GDP, but our entire system ends up being increasingly allocated to the energy and material sector to power the rest of the system. And increasingly we'll have to use some energy to mitigate environmental damage from the use of so much energy.

Yes. it can be understood as a loss of efficiency. We are less efficient. We use the resources in a worse manner. So let me take a side step there, and I want to get to your paper, especially a particular graph, but there's efficiency at three levels.

And this is, I'm just thinking out loud here. The first is the efficiency of the oil, oh, well, the energy source at its point of extraction. Like you invest one barrel of oil and you get out 100 barrels of oil from under the earth. So that process gets more or less efficient over time. Then there's the efficiency of the point of use like driving an electric car instead of internal combustion car or you are more efficient by using electrical energy than waste heat. And then the third would be the human choice efficiency. I drive a big car by myself versus fitting five people into a small car.

That has nothing to do with EROI. that has to do with the human choice of what they do with the energy once it's at their car. Does that make sense? And are there models that include all three of those steps? Well, almost no model includes error eye at all. So the question about the levels is very broad question. In general, this is, I mean, when I mentioned at the beginning, that why we are developing a new integrated access.

assessment model when there are already, I don't know, hundreds maybe out there, there are some reasons why, and one of the reason is that we want to be able to understand what are the implications of a changing ROI in the whole system. Because another of the paradigm thinking is that, especially from green growth and from the mainstream, is that in general we can do the energy transition plugging out some sources of energy and plugging in the renewables. And let's say that the rest of the system, economy, society, cities, whatever, will remain the same. But our understanding is not, is that the transition is going to imply changes in the society and the economy.

So we need to have these feedbacks feeding from the biophysical dimension to the economy. And for that, we do need to design models that from the start, from the core, they are thought to take these relationships. So with that, let's go to your paper. The paper is called Dynamic EROI of the Global Energy System in future scenarios of transition to renewable energies. Can you give a brief overview of the paper, but specifically explain what the figure nine is,

attempting to show. So this paper is the result of a lot of years of work, I will start saying. Our idea was, because as you have mentioned, the ROI literature and debate is many times confusing. There are many people doing estimates, obtaining very different numbers. The hypothesis are not always clear. there is this lack of transparency. So we knew it was a world, how to say,

especially for us that we never studied before ROI, difficult, let's say. So our idea was in an integrated assessment model we built for a European project called Medeas. So we had different levels of Medeas. We had Medea's war, Medea's EU, and then Medea's country level. So here we were interested into looking at the problem at the global level,

because now with the global trade and so on, I don't know, in Spain, we are installing a lot of PV, but if this PV is manufactured in China, but then the energy investment is done in China. So we wanted to have the global picture, not to have to deal with these trade effects. And the idea was to see what would happen with the arrow eye of the system in a dynamic way if we do the transition to renewables at different pace, at different rhythms. So in this figure, in this figure we have three lines.

We have GG corresponds to green growth, and the percentage refers to the amount of renewables in the system in the year 2016. So, for example, the thick, solid line is a green growth scenario, which attains 100% renewables in 2016. And the other two scenarios are, let's say, less stringent, and we wanted to see the difference. So what we see basically here is that if we do this fast transition, which in fact is a transition we should do if we want to avoid climate change, all the time thinking in green growth perspective, were interested in assessing the feasibility, technical feasibility of green growth. We were not interested in proposing a workable alternative in this paper. So we saw that the error eye of the system will decrease a lot and very fast.

So from the levels we were talking before, something between 10 and 15, we will be something in the minimum because there is like a rebound. I will explain now why this rebound. 3, 4, no? Just to be clear, this is the standard EOI, not the wide boundary. So that, like you said before, things like transportation and the ultimate distribution of the energy is not included in this. Well, yes, here, the thing is that we use something in between a standard and point of fuse,

but we are much closer to standard because we didn't compute all the, all the energy embedded in the grids, which is enormous. So we only took some effects related with the general system. For example, we took into account transmission losses. We took into account everything related with the management of variability. So if we need to put more storage and if we have some curtailment, because the system has a very high share of renewables, variables. So it's something in between.

But I think we are closer to standard. And you were about to explain what happened in 2050-5, the rebound, yeah. Yeah, so the rebound. Why is this rebound? Because the renewables have a pattern of investment of energy and money very different to the pattern of investment of fossil fuels. In general, fossil fuels, you have an investment at the beginning, but then you have also significant investment that you need to do all the time to extract this energy.

Basically, for oil, you need to be pumping all the time, and to pump this, you need energy, you know. But for renewables, the investment, the big investment in terms of energy, money and materials is at the beginning. is up from investment. So you spend a lot of money, materials and energy, even your plant has not started to provide you one unit of energy. And then in terms of operational maintenance, it's much lower. So what does it happen? That if you do all the, you need to do the transition very fast,

you need to put all the up from investments now. And this is what drags the ROI of the system. And this is the reason it recovers, because when you reach 100%, you arrive like a stationary state where you only need to replace the capacities that are being the commission. So you don't need to expand the system, but maintain. And that is the reason that after the minimum, it stabilized. I think it stabilized at around 7 or 8.

I'm not sure now in the paper we didn't show, because we were focusing on the 2016, but I think we explained in the paper. So we recover. Because this paper, our paper has been criticized, well, first ignore, I would say,

and then by those who didn't ignore it, they criticized. And the main critics is, oh, you, in your group, you do error estimates that are very low. And they are bad estimates are not reliable. But the thing is that

we use an ROI levels that are within the range of the literature. So the thing is that they didn't get the point that we are using a standard aeroyes from the literature, but we are capturing the dynamic effect because the airway literature is dominated by static assumptions. What does that mean dynamic effect? Dynamic means over time, variation over time. So if you are analyzing a problem related with the energy transition, the energy

transition is inherently a dynamic problem because you are increasing the share of some technologies at the expense of other technologies. So there are dynamic effects. And what I explained, the pattern of investment, you have the lifetime of 25 years. It is not the same if you need to do the investment in the year one or if you need to do it over the period distributed. So most EROI analysis made by the teams that they say are more influential, they use static assumptions, and they don't see these dynamic issues. Because their methodology is not able to see it.

So I have a lot of questions here. This may be esoteric to a lot of listeners, but I see why this is important. This is the whole story. This is building the house from the foundation. First of all, I forgot to ask you this earlier. Why should people use EROI analysis or net energy analysis or biofysical analysis instead of just looking at the market prices and using dollars?

Well, this is, I mean, the question could be asked as why is biophysical economics important? No, the basic idea is that economics understood in a constrained way, just looking at dollars, it's a very partial and incomplete view of economy. So it's true that it is the dominant way of looking to the economy, but if you go to ecological economics or biophysical economics, the idea is that in order to have the complete picture, you need to have physical dimension. also. You need to have kilos, you need to have cubic meters of water, you need to have

tons of resources, you need to have joules of energy. Because with the money, you can do things that are a bit, you can trick a lot. You can give subsidies, you can put taxes, you have inflation, the government can get in debt, but the physical reality is like the foundation. So our idea is the opposite. Let's represent the foundation and let's try to capture after what are the impacts in the monetary dimension,

which is also important. I don't want to say that it's not important the economy. It's very important. And in our models, it's one of the most important modules. As you said before, how we manage the consumption and the production is critical. It's critical. And we need also to deal with it. But it's not the only thing we have.

Carlos, if he will be here, he will say that these models that only have dollars are flat earth models, no? He would also say that Gaia might have something to say about these models. No, I'm kidding. So here's another question. I used to love EROI because it made so much sense to me as you just described. But now I think it's often used as an ideological tool to represent fossil fuels favorably or to represent renewables favorably without a lot of standardization. So one of my many pet peeves is EROI standalone for a technology is mildly useful.

But what we really need is what you did in this paper, which is an EROI of the system. because if you add a little bit of a solar panel, solar photovoltaic to a system, the EROI of it as a standalone is probably accurate. But as you increase it to 10% of the system or 30% or 50% or 80%, the cost to the system with the backup and the transmission and the distribution and all those things reduces the EROI of the system. So can you talk a little bit about the importance of using a system EROI of the entire, I guess it would be a grid in a region or a country or a world?

I really like your question because I go to the heart of the problem. Precisely what we wanted to avoid when we were doing this research is to avoid this never-ending debates about airway of solar. Solar is intermittent. then I need to assign backup, how much backup. Then there are so many assumptions that, as you said, you can get what you want. So our idea is we are not interested into allocating energy costs to any technology. We are interested in to have the complete picture and know what is the energy cost of that energy mix.

And if I can get a better energy mix, this combination is better. And also, we have to be aware that the energy mix is going, the, the, I don't want to say the word optimum, but the best energy mix is going to be different in each region, because it's not the same the sun we have in Spain that the sun they don't have in Denmark. So, I mean, there are a lot of things with the ROI that have not been done properly. So why is important the ROI of the system in order to have the full picture and to avoid to focus in the trees and to see the forest, I will say.

Well, speaking of the forest, one could argue that in your solid line scenario, the green growth of 100%, you're treating energy as the limiting variable, but if we were to scale renewable energy to be 100%, or anything close to that, we would then run into water and mineral and material and land and maybe forest limitations. So EROI focuses on energy as being the most important variable.

And I would argue that other than the ecosystem services of Gaia, it is the most important. But there are other limiters too. So that would be an additional layer of complexity to your model. Yes, when I give talks about this, I generally start by the general picture, mentioned the planetary boundaries framework, definitions of sustainability, and then one of the elements, because we have to distinguish between renewables and sustainable renewables, no? Not all the renewables are exploited in a sustainable way.

So as you said, we need to have in consideration a lot of things. And then for the technical feasibility of the system, the ROI is something important, but the ROI is not the perfect indicator. Maybe it will be good to insist on this, not to give this impression. The ROI captures very interesting characteristics, but does not see many others. So, yes, renewables, limits to renewables. there are different limits, also different limits depending on the technology. For solar and wind, I would say some materials could pose a problem.

For land, I think it depends a lot on the region. So we have done some research about potential land constraints for solar. For example, what we see is that it depends a lot on the country. Let's take a couple of examples. It is not the same. Australia with enormous size. I mean, a very little density, small density of population. And a lot of irration than, I don't know, UK.

UK low irration, high density population, high energy consumption. So in some northern European countries, it could be a problem. But of course they are already trying to find a solution through trade. But I don't know. It's a topic which is very broad. And yes, the renewables have different problems. We'll have different problems. So back to your graph again.

You had real data through 1995 to 2018 or so that the EROI of the system declined from 16 to 12. So can you speculate or did you do the analysis? And I think renewables system-wide right now are around 5%, depending if you include hydro or not. But it's already declined 20% in the last 25 years. So what if you didn't have a green growth scenario and you just continued the current mix? Will that EROI also continue lower or didn't you do that analysis?

Well, the Medea's model is not ready for this. I will explain why. This data from 1995 until 2015 or no, 2010, I think in the case of Medias, are derived from historical data, basically from the international energy balances. So what the model is there is capturing there, is something that is not new, is something that has been found in other studies by, for example, Paul Brockway team,

or there is also a team in France has published some ROI estimates, which are showing that the ROI of fossil fuels over time in the last decades has a declining trend. So I think the EA data captures this. But in Mereas, for the sake of simplicity, we did not consider that the ROI of fossil fuels decline over time, which is one of the optimistic assumptions we did in this work.

I think we have a full paragraph about the limitations and we took a lot of care that all these limitations would be biased towards overestimating the ROI because we knew we were going to receive critics. So for us, the ROI of oil in 2010 and 2016 is the same. So this is a wrong assumption, but it was very difficult for us to project that. And we decided we already had interesting results without it. And we kept it like this. As a human, you're a scientist and a human.

But as a human, when you saw these graphs when they first came out of your computer, and it showed that the EROI, which you just said is probably a little overestimate from reality, got down to three in 2050-5 before rebounding. What was your reaction? I mean, I can't imagine our society could function at an EROI of three, not remotely how it looks today. Well, I think as a human, I first thought there was some error. Because we, I mean, to our knowledge, no one has done this type of research, so you are

blind. So I don't know, my intuition or my bias was telling me that it was not going to be so strong. So you'll try to find errors. You always find some errors, but in this case, I remember they were not relevant because many times you find two errors are they compensate one with the other, especially when the model is already very validated. And then the second thing I think, and this is how I interpret this is that the green growth story for the world world is this is a story.

They are telling us. Do you think they're lying or trying to trick or do some political thing or do you think they're energy blind? They just don't understand the biophysical ground up.

It's ignorance, I think. In my opinion, I'm not going to talk for 100%. But of people, but for the most, I think, is ignorance. There is a status quo, a mainstream scientific paradigm, and it's one of us saying this against 10 other saying other things.

So... 10 other well-funded, well-funded and supported people, by the way. So what would be... I assume the objective of your group at Valladolid would be to integrate graphs like this and the numbers that support them into the integrated assessment models to have more accurate portrayals of net zero and some of these scenarios that are very popular. Yes? Well, that will be one option. Maybe our group is really small. So it's like it's an enormous task for one group.

I think we should maybe devote more time for this type of strategies. But here we have to talk about how science is finance because our group is a very reduced number of professors. Most of us are our contracts are attached to projects. So if the European Commission or the Spanish Ministry is not interested about ROI, we don't get project about the right. So we do this on the side or we try to do it as a subtask of a big project. So what I want to say is that we have small capacities in the group to do this type of,

how to say, to be influencers, to say modern terminology, you know? So do you think the Ukraine-Russia situation has accelerated interest in this sort of realistic energy of future scenarios? No, I don't know. I think the European Union had a green, sorry, a green deal package with a lot of investments for the transition. And I think this has distracted because, you know, you cannot have many main goals. So this has distracted the attention.

I don't know to some point, I imagine also the budget, because all the military budget is now skyrocketing. So where is this money? If we spend on this, we will not spend on other things. And what is, maybe it has accelerated all the issue of hydrogen in Europe. Because, as you know,

the problem with Russia, Russia is that we were consumed, well, the situation is that Europe was very dependent on Russian natural gas, not only natural gas, metals, nickel, also fertilized, etc but natural gas is a bit the most famous so now there is this idea that which was already on the table but now I think they are trying to boost it so the south of Europe and the north of Africa

Morocco and so on produce with a lot of renewables produce hydrogen that is then transfer to the north of Europe synthetic fuels or whatever to replace gas so this is another research challenge which in the treasure team we are very some of us are very motivated to analyze there is no almost no eroy on hydrogen fuels and so on this is a blind spot and they are putting the European Union millions of millions of euros on something that in our opinion is quite immature this reminds me a bit the biofuel story no when the issue of pick oil started to be a bit relevant then they started to to invest a lot of money in biofuels, people were, some people, few people were warning,

take care, this doesn't make sense. And then they realize when, because this is one of them maybe, personally I find a bit frustrating that for me, science about environmental problem is about anticipating. So with these simulation models, you detect some issues that now are not a problem, but that could be a problem in the future. You anticipate, you force them and then you tell people take care if you continue like this, you will face this problem. But the problem is that we say things and they don't listen and then they only realize that these are a problem where they have already made the mistake. So it's a bit useless.

With biofuels is the same. Yeah, I agree with you. Actually, my only article ever in science was about corn ethanol like 20 years ago. You know, on that note, Enigo, are you afraid of science and the scientific process as we approach tougher economic times that the actual science about scenarios, realistic scenarios about the future politically within the peer review and institutional funding process will start to be different. Do you have any fears about that? I'm not so pessimistic in the sense that we don't think that, I don't think, personally, this is totally now subjective opinion, no? We have enormous challenges. There are some people who think that we are doomed to chaos

or to a really bad, bad times. I'm not so pessimistic. I think this comes also with your character, but if I can bring some elements, rational elements. If you look to the history, the history is full of events, with situations very, very bad for people, very bad times, that they manage to overcome it. Of course, also there is plenty of situations where they did not manage to overcome and it was very bad. But this is my opinion, that the human, the human, the humans, we are, if you are aware of the problem and you are motivated and you understand and you have a sense that you can achieve, we have an enormous energy to mobilize. And as we say, the ROI is determined by social decision and economic decision.

Nothing is written in stone, no? So, I don't know. I'm in this sense, I'm not so pessimistic, but I'm aware that we need a change, a radical change. In this sense, in terms of energy, another strand of research which I have is related with energy communities, energy cooperatives. And these type of projects, even if they are small, for the moment they don't have most countries an impact in the macro view, these projects give hope. They are examples of what can be done. And I think they are very, very, like sheets of change.

What does that mean energy communities? Okay, I think it's maybe more a U term in the legislation. But basically, it's the idea that historically the energy has been supplied and managed by very large companies. Private companies or state companies is the same. It's something outside of the control of the citizen, no? So all these also they call energy democracy or energy cooperatives, energy communities, is the idea. that people, late people, you can make an association for, I don't know, for getting your food locally and sustainable,

you can also make an association to install some PV panels somewhere and then share this energy, you know? So this is the idea. So decentralization you're talking about kind of... Decentralization, but also decentralization in the ownership and the management of the resource, because if you can have the centralization for a technical point of view, if all the panels are on or everything is controlled by big, large corporations, no?

Yeah. Excellent. Well, this has been a helpful glimpse into a biophysically plausible green growth scenario. If you don't mind, I would like to ask you some personal questions since I've known you for six or seven years. you have thought about EROI, biophysical economics, peak oil, climate change, these things as an individual and as a career choice,

do you have any personal advice to people watching or listening to this at this time of a global meta-crisis? It's difficult because this is so far from our daily life, especially in Europe. I know, you're a scientist. So it's a, it's a, it's totally, disconnected no so for normal for for for lay people who are not interested

about this or have no information they the message is hard because the message is the life we have now is temporal it's not sustainable maybe if you are young 30 40 years you will see these problems your family will see it so that will be maybe my message But don't give for granted what you have. This is sustain. We say in Spanish is a giant with mad feet. I don't know if English you have such a...

How do you say in Spanish? A giant with a mad feet. So it looks enormous, but it's very unstable. Yeah, well, I agree with you. So you teach at a university. You're a postdoc. What recommendations do you give to 18, 19, 20-year-old humans at Vaya Adolid University or any young people listening to this program?

I will say that everybody should, when we make plans for the future, big things. For example, buying a house or I don't know, these type of things, you need to carefully think if this is really going to be a good option in this context. So to try to be more resilient. Also, I think there are two things here. There is the structural change and there is the personal change. I think I'm not naive to think that if everybody changed our behavior, then the world will be perfect.

This is totally naive, but it's true that this is one of the pillars of the transitions. So I think we have a process, especially in reaching countries where we are surrounded by this superabundance and overconsumption and so on, that we need to learn to live ourselves with less. We have, I insist, structural constant, but as a way to be good with ourselves, I would say. So if in the future there is some bad situation, we already understand what happens and know and be used to that. What do you care most about in the world in ego?

I think values of, I think, freedom and autonomy. So if people are really free and autonomous in the way that they are not manipulated, thing that can save us from many things. And of all the issues in the world, could be biophysical analysis or anything else, what issue are you personally most concerned about in the coming, 10 years or so. I think my main worry is that all these problems will be too much and it will be a big mess. And in contrast to that, what gives you optimism?

What things have you witnessed or small examples give you optimism and some inspiration for a better future than the default? examples that are happening now, I would like to highlight this group of people who gather together in small cooperatives for providing themselves not only with energy, but bio food, finance. Even we have now in the city a cooperative for transport with electric cars which are shared. I think this gathering, doing projects in common is very good. And then in the history, for example, I really always recommend the book from Jared Diamond Collapse, which is a classic now, which gives these examples of societies which fail and societies which survive. So I think there is a list of historical cases.

there is the case of Iceland, there is the case of Japan, which manage to survive. It's true that in some cases with authoritarian rule, this is maybe not optimal, but there are situations. If you could wave a magic wand with no personal recourse to you or your reputation, what is one thing you might do to improve human and planetary futures? Well, I think I will maybe repeat, but I think for me is very important. This idea that everybody, we try to be or we are non-manipulated, that we transparently see when someone is cheating on us, someone or the system. That would be magic, no, like a red light in your brain

when someone is trying or such a situation is not true in their manipulating. That will be like a semaphore, very interesting. full behavioral transparency. Excellent. This has been great in ego. As usual, when I have my first guest, the first time on the program, I'll ask you,

if you were to come back in six months or nine months, what is one topic that maybe we didn't cover today that you are very passionate about, interested in that is relevant to our future, that maybe you could come back and do a deep dive on that topic. I will say that the two things

are for me are very key. One thing will be all this net energy assessment of the hydrogen and the other thing will be the what are the sustainable potentials of renewables or to try to understand a bit more the situation. Do you think that a group

of researchers either at Viadolid or 10 other universities if they very convincingly came up with research and analysis showing that the net energy of hydrogen system-wide was a bad path to go on. Do you think that politicians and decision-makers would actually heed that advice or is the momentum too strong to change that? The problem I think are delays because we have not even started.

so that means that we will get results not before two years. In two years, the amount of investments done is going to be enormous and this is going to be for me like stranded assets. And this is what happened with biofuels. Now we are consuming in Europe of biofuels because we built some refineries 20 years ago and these refineries have a lifetime of, I'm not sure how many years,

but we need to use them until the end. So maybe there is a risk that again we arrive late and then they cannot undo what they did also not to acknowledge that they did an error. Because for example, about hydrogen, I can give an anecdote. A couple of weeks ago, I was in a debate about hydrogen with some people who are working with hydrogen. And well, they call me a bit to be the opposing side of these people who are working with hydrogen and think that it cannot be applied in many things and, let's say, the most typical view. So the debate was very good.

I think it was constructive and we were listening to each other and I think it was very respectful and so on. But at the end, how the debate finished. There was an intervention from one person from the research center who said, anyway, the European Union is putting a lot of money in hydrogen, so there's going to be a lot of job and money there. So when the debate finishes like this, then I can go out because, I mean, we have different priorities and we have different ways of taking decision. Well, I wish you luck in your work on that.

I do think more broadly, we need massively more education on how important energy is to our lives, how our fossil energy is depleting. It won't be here forever. And the importance of energy quality and energy properties that not all jewels are created equal. We can't just create these hydrogen cars and scale renewables and continue to power a 19 terawatt society. We are energy blind. And thank you and your team at Valladolid University, at least trying to build the analysis from the ground up. I'm a big fan of your work and ego. Thank you very much, Nate, for your words.

And we welcome everybody interested in this type of research in our group. We will be very great to host anybody for short time or long time. To be continued. Saludos, Amigo. It was a pleasure to be in the podcast. It was very, very fine. So thank you again and see you soon. If you enjoyed or learned from this episode of The Great Simplification,

please subscribe to us on your favorite podcast platform and visit thegreat simplification.com for more information on future releases.