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Excel

comparing the total costs and monetary returns over the life of an energy production project is referred to as a life cycle

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Microsoft excel cost-benefit analysis for installation of a hydropower energy system over a 20 year period. One of the critical issues in evaluating new energy technologies is how to determine whether a new energy installation--a windmill, a solar panel, a power plant--will generate more energy over its useful life than the energy it takes to build and maintain it, and how much more. This analysis falls under the general category of cost/benefit analysis. Comparing the total costs and monetary returns over the life of an energy production project is referred to as a life cycle cost study, although the term "cost" here is misleading: what is important is the balance of the actual amount of energy that goes into and comes out of the project, not the dollar cost. A popular current form of "life cycle" analysis for energy sources is "energy return over energy invested," or EROEI. The concept is quite simple, although it can be complicated to apply in practice. To do an EROEI analysis, one tallies up all the energy that it takes to build, install, operate, maintain, and "decommission" (recycle or scrap) the energy facility over its entire life. One then calculates the total amount of energy that will be generated over that same time. The EROEI is the ratio of the energy generated divided by the energy invested. Obviously, the higher the ratio, the better. Sources of highly dense energy that are relatively easy to tap, like crude oil from the Middle East, have a high EROEI. The best EROEI's are in the range of 100:1. Using the crude oil example, this implies that an energy expenditure of one barrel of crude oil, used in exploration, drilling, and production, will yield 100 barrels of oil for ultimate use. In the early days of crude oil exploitation, EROEI's of 100:1 were the rule rather than the exception. Now, as oil gets harder to find and pump out of the ground, the EROEI's are going down. Analysts now think that much of the current hard-to-find and/or hard-to-pump oil now has EROEI's in the range of 20:1 to 30:1. The tar sands of Canada yield as low as 5:1 due to high processing costs-and note that EROEI does not typically include the long-term environmental costs, such as air and water pollution, or global warming.

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