Fostering Effective Energy Transition 2024

Fostering EffectiveEnergy Transition I N S I G H TR E P O R TJ U N E2 0 2 4 Contents Foreword3 Executive summary4 Introduction5 1Framework8 2Overall results11 2.1Transition scores132.2Transition momentum162.3A lookback on COVID-19 impacts18 3Sub-index and dimension trends21 3.1System performance223.2Transition readiness34 4Tailored transition pathways37 4.1Regional insights384.2Income-level insights404.3Local energy resources insights40 5Looking ahead: top 10 actions42 Appendices A1Methodology and indicators44A2Country group performance profiles45 Contributors53 Disclaimer This document is published by theWorld Economic Forum as a contributionto a project, insight area or interaction.The findings, interpretations andconclusions expressed herein are a resultof a collaborative process facilitated andendorsed by the World Economic Forumbut whose results do not necessarilyrepresent the views of the World EconomicForum, nor the entirety of its Members,Partners or other stakeholders. © 2024 World Economic Forum. All rightsreserved. No part of this publication maybe reproduced or transmitted in any formor by any means, including photocopyingand recording, or by any informationstorage and retrieval system. Foreword Roberto BoccaHead, Centre for Energyand Materials; Memberof the Executive Committee,World Economic Forum Muqsit AshrafGroup Chief Executive,Accenture Strategy The speed and trajectory of the global energytransition are now more important than ever. It iscritical for both policy-makers and businesses tobalance the three energy system priorities of equity,security and sustainability. It is also clear that thereis no single universal answer for all countries. TheFostering Effective Energy Transitionreport, nowin its 14th edition, benchmarks energy systemperformance and readiness for the transitionthrough the Energy Transition Index (ETI) andprovides insights across nations. Countries are ramping up efforts to enhance transitionreadiness, including human capital development,where clean jobs represent more than half of allenergy-related jobs. Clean energy infrastructureinvestments have also been increasing, reaching $1.8trillion in 2023, but almost 90% of the growth since2021 has been in advanced economies and China,1highlighting wide gaps in transition momentum. Digital innovations, including generative artificialintelligence (AI), present significant opportunitiesfor energy companies, enabling them to generateover $500 billion in savings annually.2This canenhance equity and security by enabling additionalcapital investment or reducing energy supply costs.Nevertheless, as these technologies advance, theelectricity needed for their computational demandswill increase and must be managed carefullythrough the adoption of more efficient AI modelsand clean energy sources. In the past decade, the sustainability dimension ofenergy system performance has improved with ashift to renewables and the integration of electricvehicles into mainstream use. However, progresshas been uneven globally. Aside from increasedadoption of wind and solar, it has not kept pacewith the trajectory needed to reach net zero by2050,particularly regarding energy efficiency gains,system electrification and adoption of low-carbonenergy sources and fuels. In a significant stepforward,recent decisions at the 28th Conferenceof the Parties(COP28) aim to double energyefficiency and triple renewable energy capacity by2030, and transition away from fossil fuels in a justand equitable manner. While ETI scores have reached record highsand shown notable improvements across variousdimensions, the pace of progress has slowed,partly due to growing uncertainties in the globallandscape. The ETI provides decision-makerswith a comprehensive assessment of globalenergy systems and trends over time. This year’sedition maintains consistency with last year’smethodology, enabling stakeholders to makecomparisons and track developments. The 2024ETI also introduces “tailored pathways,” providingnew perspectives on country pathways and globalcollaboration. These pathways allow decision-makers to consider country-specific dimensions,such as income level, local energy resourcesand region, to maximize impact and advancethe energy transition. Equity-focused policies and decisions are gainingprominence. However, investments in developingnations remain insufficient, and challenges persistwithin and across countries, especially in energyaffordability and access. Meanwhile, energy securityrisks need to be managed effectively amid risinggeopolitical tensions. ETI data shows that whilecountries have managed to address security shocksin recent years, this comes at the expense of equityand sustainability. Executive summary In a dynamic global landscape, mostcountries are progressing in the energytransition, with the centre of gravity movingtowards developing nations. 12% reduction in energy intensity in 2022 comparedto 2021.4Six G20 countries also fea