GENEVA - The energy transition is progressing but has lost momentum in the face of increasing global uncertainty, according to the World Economic Forum's Fostering Effective Energy Transition 2024 report.
The Energy Transition Index (ETI), which benchmarks 120 countries on their current energy system performance and on the readiness of their enabling environment, finds that while there has been notable progress in energy efficiency and a marked increase in the adoption of clean energy sources, energy transition momentum has been held back by setbacks in energy equity, driven by rising energy prices in recent years. Energy security also continues to be tested by geopolitical risks.
Executive summary
In a dynamic global landscape, most countries are progressing in the energy transition, with the centre of gravity moving towards developing nations.
Growing uncertainties are impeding energy transition momentum despite record Energy Transition Index scores. Global average Energy Transition Index (ETI) scores reached their highest levels, with 107 out of 120 countries making progress over the past decade. However, the global landscape is marked by economic volatility, heightened geopolitical tensions, and technological shifts. This uncertainty is reflected in
the ETI, where the rate of improvement over the past three years has decreased.
Energy security continues to be tested, energy equity has gone into reverse and sustainability shows a gradual improvement over the past three years. Geopolitical tensions continue to test energy security, yet there are positive signs that countries are successfully mitigating most risks. Equity has faced a setback in the past three years driven by increased energy prices and fossil fuel subsidies.
Sustainability has shown progress, mainly due to improved energy efficiency and increased share of clean energy, despite energy-related emissions growing by 1.1% in 2023.3 Transition readiness has progressed significantly, driven by regulations and
political commitment, education and human capital, and infrastructure. While innovation growth has slowed, countries like China and India are leading in developing new energy solutions and technologies.
Advanced economies, along with China and Brazil continue to be top performers, together with several developing nations that are forging pathways for progress. Sweden, Denmark, Finland and Switzerland lead the rankings, with France entering the top five performers due to its effective energy efficiency policies, resulting in a
12% reduction in energy intensity in 2022 compared to 2021.4
Six G20 countries also feature among the top 20 performers on this year’s ETI; France, Germany, Brazil, China, the United Kingdom and the United States. In 2023, China commissioned as much solar photovoltaic (PV) as the entire world in 2022, while its wind additions also grew by 66% year-on-year.5
Brazil’s long-term plan for hydropower and biofuels, along with institution-building initiatives, have been key in attracting investments. Estonia, Ethiopia and Lebanon have seen the fastest improvements in the past five years, prioritizing off-grid renewable energy to enhance access and sustainability. International support that is tailored to country specific requirements, must be reinforced to direct sufficient financing to emerging and developing economies. The widening gap in transition financing between advanced and developing economies necessitates increased international support and new approaches to unlock investments. Tailoring support based on factors like region, income level and local energy resources can underpin customized energy transition pathways. Sub-Saharan Africa shows the strongest growth in ETI scores, driven by improvement in energy access and affordability.
Prioritizing these areas with international support can help sustain progress. Moreover, countries with abundant local energy resources are top performers in
equity and security while being the worst performers in sustainability, emphasizing the need to balance the transition.
Decision-makers across the globe must act decisively and collaboratively to accelerate the transition towards an equitable, secure and sustainable energy future.
To download the report, visit: https://www3.weforum.org/docs/WEF_Fostering_Effective_Energy_Transition_2024.pdf
