Getting sustainable, secure and equitable power to the people - how's the global energy transition going?

Andrew Herscowitz, CEO, Mission 300 (M300) Accelerator: We need to start the process of people getting access to electricity so they can have meaningful, productive jobs, because there aren't really productive jobs without electricity.

Robin Pomeroy, host, Radio Davos: Welcome to Radio Davos, the podcast from the World Economic Forum. This week we're talking about energy because the World Economic Forum has just published the Energy Transition Index, its annual assessment and overview of the energy situation and the energy transition around the world.

Espen Mehlum, Head, Energy Transition Intelligence and Regional Acceleration: The progress is there, but it is uneven. And it's really being challenged, we see now, by geopolitical uncertainty, financing gaps, and the pressing need to really augment the clean energy investments and bring affordable solutions for energy for all.

Clarissa Lins, Founding Partner, Catavento: What gives me hope is that the diversity of solutions that are possible and the commitment of people in the energy field to find new ways of producing but also of consuming energy.

Robin Pomeroy: We've got two expert guests joining us on the line, and I am joined in person in the studio here by a co-host for this episode, Espen Mehlum. Hi Espen

Espen Mehlum: Thanks Robin. Yes, I'm overseeing part of our energy portfolio here at the World Economic Forum, notably including the Energy Transition Index, which is part of a Forum flagship report called Fostering Effective Energy Transition, in collaboration with Accenture. This report has been published annually for 15 years now and the 2025 edition just released.

The Energy Transition Index benchmarks countries on the performance on key dimensions such as sustainability, security and equity and five enablers of transition: regulation, innovation, investment, infrastructure and human capital. The report also provides some global insights on energy transition.

Robin Pomeroy: So it's an annual report. Can you pick out one or two highlights from this edition?

Espen Mehlum: So we really see the global progress is accelerating, but it's uneven.

The ETI index recorded the highest year-on-year global improvement. Very good news. With notable gains in energy equity and sustainability. We have seen energy security stagnating.

A reason for that is that many countries are struggling with inflexible power systems, high energy import dependence, and limited diversification of the mix. But countries really have different starting points and transition at different speeds.

Sweden topped the index this year, with many European countries among the best performing ones. But it's really encouraging that also major emerging economies and regional leaders like Brazil, China, the US and Nigeria have made significant improvements in the energy transition.

So the progress is there, but it's uneven and it's really being challenged, we see now by geopolitical uncertainty, financing gaps and the pressing need to really augment the clean energy investments and bring affordable solutions for energy for all, where it's most needed.

And just an example there, Robin, we see the global clean energy investments soared to 2.1 trillion US dollars last year, an all time high, but it's compared to the 5.6 trillion that is really needed to bring us on track for tackling the climate issue by 2030, is still low and it's not evenly spread because it's concentrated in advanced economies and China.

Robin Pomeroy: It's such a massive issue, energy around the world. And you have two guests that you've invited to this podcast to help us understand it all. Who are they?

Espen Mehlum: So warm welcome, of course, to Clarissa Lins, founding partner at Catavento, a consultancy based in Brazil. Clarissa is also a member of the group of expert advisors having provided input to this report.

And we also have the pleasure to have Andrew Herscowitz, the CEO of Mission 300 Accelerator, linked to the Rockefeller Foundation, really focus on expanding electricity access to 300 million people in Africa by 2030.

Welcome both of you.

Robin Pomeroy: Thanks, Espen. You know both the guests. It's my first time meeting them. So really, Andrew, let me just ask you, what is Mission 300?

Andrew Herscowitz: Mission 300 is an effort that's being led by the World Bank and the African Development Bank to deliver electricity to 300 million Africans by 2030. They currently have 600 million people in Africa who don't have access to electricity out of the 700 million people globally. the vast majority, almost half of the Africans don't have even a light bulb that's hanging in their house. So one of the things that we're trying to tackle is significantly reducing this gap over the next five years, which is it's an unprecedented effort and both in terms of the speed and the amount of concessional resources that are being made available to try to close this gap.

Robin Pomeroy: We're going to dive into Africa later in the show. Let me just turn to Clarissa then. You, Clarissa, you're on the advisory board providing expert input for the Energy Transition Index this year. Was there a particular highlight for you in this year's index?

Clarissa Lins: So first of all, thank you for having me on this podcast. My pleasure. One of the, I would say, the aspect that caught my attention had to do with the fact that energy transition is more than ever connected to energy security. While at the same time, it could mean different things for different countries.

So for a country like Brazil, for instance, energy transition means keeping our diverse set of energy sources contributing to our energy security, but also at the same time reconciling it with access to energy and fighting energy poverty. In Europe, means doubling down on renewables, but also guaranteeing nuclear. instance, in the US, it means a different thing right now. So very interesting to observe different realities matching one objective, but through different paths.

Robin Pomeroy: Well, that brings me to the first question I was really going to ask. What do we mean by the energy transition? Maybe Espen, you can start off. What are we talking about here?

Espen Mehlum: So I think Clarissa, you pointed to something important that different countries, different people, value or emphasize different parts of the energy transition. And I think at the core of it, energy needs to really deliver energy security in an equitable way that also means affordable energy and it needs to be sustainable as possible.

Then what you put into that can differ by region and country, and each country will have to find their way. And it will be interesting maybe to hear your views Clarissa, maybe from where you're sitting in Brazil and Latin America, how does this look? How do you square that circle or the triangle if you like in your view?

Clarissa Lins: So, Espan, as I mentioned, Brazil is a very diverse energy powerhouse because we are both champions in renewables but also in low-carbon oil and gas.

And we have, if you look to our renewables portfolio, for instance, we have biomass, we have hydro, we have, and this is historically our major sources, but now we also have wind and solar. We still not have, you know, the more advanced ones, but we have, I would say, a very powerful combination of energy, and we stand basically 48% of our energy mix is renewable. But when you look to the power mix, then we got 90%, almost, renewable.

So this puts us in a very, I would say, very positive standpoint from, I would say, an energy and a power mix.

When we think about the just and orderly transition, that's where the challenges lie. Because when we mean just, in addition to lifting some population, it is not the same, I would say, landscape than in Africa. But we still have some population in the northern region, access to modern state and modern forms of energy. It's not electricity because almost 100 % of our country has the benefit of electricity, but modern forms of energy to cook, for instance. And so it means also lifting those people from this energy poverty, but guaranteeing that no one is left behind. So in terms of re-skilling, in terms of really engaging with communities so they have jobs opportunity and benefit from energy services.

But at the same time, when we look deeper into the transition over the long term, this also means making sure that the new energy system and the new power system is able to deliver the same energy services that the current one. So, and then it means investing in infrastructure and making sure that our grid is reliable and flexible to allow for an increased share of renewables.

Robin Pomeroy: Andrew, what does energy transition mean from your point of view?

Andrew Herscowitz: So, I don't love the phrase energy transition because it's really not, it's honestly the natural move of market forces of what's happening. It's more of energy development. It's an energy evolution as we move forward in this new century. And it's being prodded into becoming an energy revolution by whatever subsidies that we give to help bring down the cost curves for new technologies.

So, ultimately, fossil fuels are going to run out. Right? There'll be, you know, it could be hundreds of years, but we all have to move towards newer forms of energy. And we've all learned that the intermittent forms of renewable energy are imperfect as well. We've watched whole systems, you know, screech to a halt, whether you're looking at in Spain and Portugal and Texas and California at different times, where the huge increase in intermittent renewables has made everyone want to double down on baseload power.

Now that baseload power can come from gas and there's plenty of gas out there, or it can come from geothermal. It can come from hydropower, which are reliable.

And now you're seeing this increased push to bring down the cost curve for nuclear because nuclear in the long run is going to be the power source that is going to be the most sustainable, but it's expensive now. But with the increased demand of energy from AI and data everyone's saying we've got to very quickly figure out what the new technology is going to be and bring down that cost curve.

So by investing heavily in bringing down the cost curve, that's kind of the energy revolution that we're trying to push, and move beyond just the slow evolution.

So that to me is what the transition is about. It's not just saying we need to get rid of fossil fuels and move everything to renewables. We've got to take a best of the above approach because there's no country in the world that's going to give up its energy security, and there's no country or household in the world that wants to have lower quality energy. So we need to invest in the technologies of the future.

Robin Pomeroy: It's really interesting what you said about the sudden arrival of AI and that just jump in demand.

Andrew Herscowitz: It's a massive demand. saw Three Mile Island in Pennsylvania, which was this controversial nuclear plant, just come online in order to feed the demand for data.

So in the US, you're even seeing like on a bipartisan basis, everyone's saying, we've got to do more nuclear. And we know it's expensive. We just opened up a new nuclear plant in Georgia recently. It was very expensive, but nobody's complaining about it because we're realizing that this is an important investment.

Robin Pomeroy: I'll ask one more then I'm going to hand over to Espen to ask you couple of questions.

The recent kind of trade disruptions and trade tensions will have some kind of impact on the world of energy and the energy transition or evolution or revolution, however we're describing it. Could I ask either of you to comment on, is that being felt now? The US administration's, its tariffs, the uncertainty in the global economy that's partly to do with that and other factors as well. What impact is that having on energy?

Clarissa Lins: If I may jump in, Andrew, so from I would say an emerging economy standpoint, impeding trade flows usually has a huge economic toll on many economies, and emerging in particular. I would say, I'm an economist by training. So that's the first, I would say big statement.

When you look into the details, and we've been monitoring closely what is happening worldwide on the energy space due to the tariffs, there's an increased cost of capex for new investments. This is, of course, in the US, but it has other spillovers, it might have spillovers in other geographies.

So if you look to the cost of renewables or even nuclear as mentioned by Andrew, the expected ones, or the legacy fuels, then there's an expectation of increased costs. So this is, I would say, a first hurdle.

But in addition to that, if you look to the impact on the overall pace of growth and inflation worldwide, then it has an impact also on interest rates. And financing, having access to financing is one of the major barriers that we face in emerging economies. So tapping resources at affordable cost is even more difficult in a fragmented world. So I would pause and I guess that we'll explore those aspects later on.

Espen Mehlum: Thank you so much. And interesting to hear your perspectives on this and the way you phrase it as well, Andrew, it's not about the transition, but it's an evolution that moves into a revolution and using all of the options there, I think it's a very interesting one. And also the connection to the trade aspects and what that might mean.

So I think that's also a good segueway to talk a little bit about what you see as some of these biggest economic or political roadblocks to spark that energy revolution that we very much need, and not least in the emerging and developing economies. Maybe Andrew, start with you first and then hear Clarissa on the same point.

Andrew Herscowitz: So it's interesting. So look, I'm not an economist, but I did take economics when I was in university. And I remember learning about the theory of comparative advantage, which means that everybody should produce whatever they can produce most efficiently and trade it throughout the world. But there's a major caveat to that, particularly in the topic that we're talking about, which is energy and energy security.

So a country may be able to produce energy or electricity really inexpensively. And in an ideal world, you're going to trade that across the border. But as soon as a country decides to use that as a tool or a weapon or anything, it can completely cripple an economy. As soon as a country becomes overly dominant in controlling the inputs for energy, that gives them tremendous amount of geopolitical power.

So there are adjustments that you need to make to this economic structure. Like in the pure economic structure, if you didn't have geopolitics at play, yes, that would work, but you've got real geopolitics at play and needs for countries.

I'll give you an example. There is an African country that I was on the phone with recently, and they were counting on importing power from a neighbouring country. They were at the time reliant on very expensive emergency power, and they suspected that the provider of that emergency power was telling the other country to cut off the power that they were importing so that they were forced to renegotiate for a few more years.

So you've got to factor in like the real world of what goes on. And you can't just have this like this pure like everyone, all the goods and all of energy is going to flow freely from one thing to another.

So I think it all remains to be seen. I know from the U.S. perspective, we're trying to make sure that the U.S. is secure, that no one country dominates all the critical minerals that are the key inputs to the energy sources of the future, whether you're talking about nuclear or battery technology or anything, we need to make sure that there's a diverse marketplace so that it remains competitive, which will help keep costs down for everybody and also make sure there's no monopoly in any of sectors.

The one danger of that free flow of goods, if you really go to who can produce it most inexpensively, there's a real danger that there becomes a monopoly and then prices go up for everyone.

Clarissa Lins: So it's interesting to hear from a US perspective because I guess that we all, as a world, we all benefited from increased trade flows and investment flows over the last 80 years. So it's very difficult now to have a second thought on the benefits of international collaboration, cooperation and multilateralism.

So from an emerging standpoint, I would say that it is, we don't see so many benefits than I would say increased costs. Because as I mentioned, there is an expectation to increase cost of capital to increase and to decrease the flow, not only of products, but also of services and of innovation and technology.

And so when we think about the needs really to progress and to advance in more I would say low carbon energy sources and technology, the lower the cooperation, the cost it will have. And for countries that lack access to capital, then it is even more challenging and difficult.

Andrew Herscowitz: Yes, the high cost of capital is one of the key constraints to energy development all throughout Africa and a lot of the developing economies or the emerging markets. As interest rates increase in the U.S., the rates in other countries increase by multiples. And so that's been the key constraint for a lot of the development is the high cost of capital.

This is why Mission 300 is unprecedented in that the World Bank and the African Development Bank are making 30 to 40 billion dollars of concessional capital available to a lot of the countries that have been left behind. It's about bringing down the costs of not just the cost of electricity, but the cost of development.

One of the statistics, which is it's troubling. I always tell people if you want to make money, don't go into the energy access business. OK, that's you're not making a lot of money there. It's a necessary thing because as the lag time between the time that someone gets access to electricity the first time and then achieving cost recovery on the investment, it could be five years, 10 years, it could be a whole generation.

We saw that in the US. A colleague of mine recently wrote a piece on this, looking back on the US and the communities who got electrified in which order, and how long it took for incomes to increase. There was a clear correlation between getting energy access first and when those communities became more prosperous, but it took time.

So we're doing that with eyes wide open. If you look in Africa, for example, the GOGLA, that used to be the Global Off-Grid Lighting Association, did some research and found that of the 600 million Africans who don't have access to electricity, 78 % of them can't even afford the $5 a month needed for a basic solar home system.

So part of what Mission 300 is trying to do, a significant portion, half of those people can afford maybe two or three dollars a month. So we need to try to bring down the costs, reduce the amount of subsidy, and have the private sector be able to provide solutions, but it's going to require some level of low-cost financing over time.

Robin Pomeroy: Let's stay with Africa for a moment then. Can you give us kind of a view, a broad view of what's happening there and your work there, Andrew? You know, what are the success stories? What is working?

Andrew Herscowitz: So we've learned a lot. I was originally the coordinator for Power Africa, which was launched in 2013 by the US, and it became the largest public-private partnership for development. And the goal was to double access to electricity in sub-Saharan Africa by 2030. It took us 11 years to bring electricity access to 200 million people. Some of those were just like basic solar lanterns. And we don't really like to count five people standing around a solar lantern as electricity access. But we've learned a tremendous amount in those 11 years. And now with Mission 300, we're trying to achieve 300 million people in only five years.

So what do you need? You need strong government commitment. So we've got 12 countries have already signed energy compacts where they commit to making the reforms that we know are needed to make sure the sectors can develop. And that's difficult. I mean, it's difficult to push those reforms.

We've got another 20 countries that are in the process of negotiating compacts.

We've got the low cost financing available. A lot of that low cost financing is only available to the poorest countries. So even the middle income countries still have energy access gaps. So we have to figure out that even though those countries may be OK because they're middle income, the sector itself is one that struggles. So we've got to identify low cost financing.

Philanthropy, the Global Energy Alliance for People and Planet, GEOP, Rockefeller Foundation, we're bringing in money to help kind of grease the wheels on a lot of those projects that World Bank and the African Development Bank have moving forward. About half the connections we expect to come from either grid expansion or grid densification, know, good old grid power. The other half we recognize are going to come from off-grid. Some will be solar home systems initially. Others will be mini-grids.

But the goal of this whole program, it's job creation, it's economic growth. We need to start the process of people getting access to electricity so they can have meaningful, productive jobs, because there aren't really productive jobs without electricity.

Robin Pomeroy: Espen, do you have questions for Andrew?

Espen Mehlum: Yes, so Andrew, I think you're talking both about the bottom-up need here and the top-down. So just maybe a related question there. On the one hand, how can African entrepreneurship and innovation really help in this regard? And on the top-down side, this year is the first time ever that an African country holds the G20 presidency through South Africa. What are your hopes on how this can also help propel Africa's energy revolution?

Andrew Herscowitz: So African innovation is super exciting. We saw what's happened in the digital payment space. I always describe Nairobi as kind of like the Silicon Valley for people who have souls and care about humanity. So you see incredible innovation coming out of Kenya, out of Nigeria as well. We've seen tremendous success, sustainable energy for all.

And GEOP have had great success in Nigeria, for example, taking like the markets that have sometimes thousands of business stalls that are all running diesel generators. In Nigeria, there's 10 times the amount of power being generated from diesel generators as is being generated from the grid. So, SE4ALL and GEOP, working with the World Bank, African Development Bank and others, have been helping convert these market stalls to using solar battery generators that save money and that are better for the environment as well.

So we're seeing all kinds of innovation, all kinds of needs, but where I actually see the real innovation happening, it goes back to AI. So I talked about AI and the demand that AI and data is creating for grids all over the world, but it's also an opportunity. So there's a company called Liquidstar, for example, that has, it's what it's called, it's a waypoint. It's a mini-grid, but it's a mini-grid without wires attached to it that's in Djibouti, in a small community there.

What they're doing is they're charging batteries using those solar panels. Those batteries then get put into motorcycles. Those motorcycles are electric motorcycles, so you can travel around with them, but you can then take those batteries to your house. You can discharge them, use them for powering your television, charging your cell phone, other things.

But the other thing that Liquidstar is doing is they're realizing they've got excess electrons at different times. So because they've got a Starlink connection, they're able to sell excess electrons for doing Bitcoin mining. They're able to do localized AI learning and earn income from that. So these are what we're calling digital loads.

So in theory, you can have, and this is why I think technology and where the marks are going to take us is,
are there income streams for mini grids in remote areas beyond just the wire to the home? And if you can supplement the income for those mini grids, knowing that that person who's getting electricity isn't really paying much, you can reduce the amount of subsidy that the World Bank and governments need to pay to make sure that people have access to electricity and accelerate the path towards cost recovery so that these mini grids become bankable.

These are the solutions we're going to be seeing in Africa and I'm really excited about it.

Robin Pomeroy: Let's move to Brazil then and Clarissa. Espen, do you have Brazil-based questions?

Espec Mehlum: Yes, I think also to build a bridge between the continents here. Brazil is of course being a front runner here, both in terms of solving partly at least the energy access issue, but also spearheading this clean energy revolution being an early mover on the auctions to get the renewables going and many other things. And also in terms of funding, I think BNDES has been playing a key role in Brazilian ecosystem. Clarissa, what's your thinking here and what can African countries and others learn from the Brazilian experience and vice versa perhaps?

Clarissa Lins: So just to start, Brazil is a middle-income country. So we are, you know, according to the World Bank rank, so we stand in the middle, but we have a population of more than 220 million people. So very large, very robust and strong domestic, I would say, environment with a strong capital markets and I would say per capita GDP, know, standing at the middle of the world pack.

From an electricity access standpoint, as I mentioned before, we have a very high rate of electricity access standing almost close to 100 percent because we invested heavily in the past on having an integrated grid that covers the whole country except one of the 27 states that compose Brazil, which is more in the northern region, called Roraima. And then we have isolated systems that are able to provide electricity to the people living there. But we are also investing in new grids, so to have 100 % of our territory covered by the integrated grid.

So I would say that the first maybe lesson to be learned from Brazil is the role of robust energy and power planning that benefited the private players to know what is at stake on a yearly, but also looking to 10 years plan, looking to decades ahead, but also with a strong, as mentioned, capital markets and a development bank.

So, Espen mentioned, the BNDES, which stands for the National Brazilian Development Bank, which is really at the core of the development of our renewable industry in Brazil, but also of the oil and gas industry. And I want to come back to that because it is really a balance among those two very strong sources of energy.

We are nowadays the eighth producer of oil and gas, an oil and gas of relatively low carbon content, highly technological, deep offshore, and that also has benefited from local, I would say, technology, but mostly on the international partnerships that were developed over the last more than three to four decades.

So this is a huge part of our baseload. And the other part, of course, has to do with the long-standing development of hydro with a very important role in Brazil, but also biomass. now over the last 10 years, I would say, the new renewables such as hydro and wind.

At the same time, there is also an increased penetration of decentralized energy with all the consequences that it might have for the operation of the grid. So as all other countries, due to the increased share of renewables and the fact that the electricity generation is also distributed all over the country, then there's an increased challenge to really operate the grid in a safe and reliable manner. So there's been a bill as we speak submitted to Congress in order to try to really fix some of the inconsistencies that have occurred in the recent period.

But I would say that, in general, Brazil is pretty attractive in terms of, I would say, energy and electricity basis. And that's why we are well positioned to attract investments in data centres or in green hydrogen or in sustainable aviation fuel, because we have biomass, have hydro, we have ethanol, we have wind energy, and we have a relatively middle to low also oil and gas industry with supply chains, robust supply chains, access to National Development Bank but also access to a robust capital market.

Espen Mehlum: Really interesting, Clare, so thank you for that. And I think you're pointing to number of examples where Brazil has been very successful and a front runner, all the way from oil and gas to biofuels to hydro to renewables, et cetera. But where do you see the next frontier now for Brazil's energy transition or revolution to use Andy's word? Is it within AI? Is it different types of clean fuels or all?

Clarissa Lins: So this is a very good question, Espen, because when we look ahead, so the risk of being big and already very well positioned is the risk of, you know, say, OK, I've done everything that I could and now let's just wait. And we cannot afford not to be part of this, of the transition, the evolution of the revolution, you name it. But I would say we cannot afford not to be part of the future. Let's call it that way.

And so it means that we'll have to keep this diversity of energy sources running in a competitive mode. And I have to mention that as we are fiscal constrained, this also means that we have to do this in a way to attract private players, private capital, because we cannot afford to have subsidies supporting our our energy future.

So somehow we have at the same time to secure these diverse and balanced sources of energy while also identifying the new opportunities. And certainly advanced biofuels is an opportunity. So sustainable aviation fuel, so ethanol to jet. And then we have to work on global standards not to be biased against crop-based biomass.

And this is absolutely key for us. So working to influence global standards, not to exclude crop based routes, mainly dealing with the European restrictions on ethanol based and our ethanol is majorly sugar cane, although corn ethanol has been growing recently. So this is one of the aspects of the future.

The other one is also making sure that we are able to attract not only data centres and AI, but also the green hydrogen development, because due to our highly competitive renewable sources, we could attract renewable hydrogen once it is worldwide competitive.

So all these new technologies are, you know, are absolutely welcome in Brazil and could benefit from our very competitive starting base, I would say.

When it comes to nuclear, then it is unclear if Brazil will have all the, I would say, competitive conditions, we are still facing the challenge of ending one of the large facilities that we have in place. It is state-owned, so lots of problems, et cetera. I don't want to dip into this.

But when we look also to a third avenue, which has to do with critical minerals and all the value change related to this, Brazil is well positioned in some of these minerals. Our high-grade iron ore is already where we are highly competitive, but we could also be competitive in other rare earth, copper and other. So combining efforts with other Latin American countries to really reinforce Latin American positioning in critical mineral supply well chains.

Robin Pomeroy: You've both spoken about the importance of innovation in various different areas. I'm wondering, it's such a diverse area energy and clearly you just listed so many important areas. But I guess there's a couple of questions really. If you were to put your money on the energy of the future, what would it be? I'm guessing neither of you are going to say one thing for that.

But also this question of leapfrogging and maybe we've seen it, Andrew, in Africa with telecoms that many African countries...

Andrew Herscowitz: So I hate when people say that. I hate the word leapfrog. I'll tell you why. So here's the thing. So I mentioned Liquidstar, all right? A mobile phone doesn't have a wire, okay? People are like, you're going to have an Africa, you're going to have these mini grids and it's going to leapfrog. You're not going to be dependent on the grid. Well, I'm sorry, if you still have a mini grid, it's still running a wire to a person's house. But that's when, I wrote a blog about this. So Liquidstar, in fact, one of reasons they started their company was they read this blog that I wrote like probably eight years ago, where I had this aha moment about what the real leapfrog would be. It's wireless. I said, what if you weren't running wires to people's homes from these little mini grids, and instead you just had these, imagine like a container with solar panels or a gas station, whatever it's going to be, which is charging batteries all day long, and you ride up on your two-wheeler and you plop in two or three batteries, and then you drive to your house and you watch TV with that battery. Or if you need a new battery, you go to the local shop, just like people put minutes on their mobile phone, you say, hey, I'd like to, I need a new battery. Can you swap that out for me? That's the leapfrog where the battery becomes the commodity for delivery.

The founder of LiquidStar read that he's had this, hey, I'm going to try this out. But that's when he realized that he's not making tons of money from doing the two-wheelers. It's making some money. But that's when he realized that with a low orbit satellite internet connection, he can make money, extra money from doing Bitcoin mining and from doing localized AI learning. He has an internet cafe. They're doing water purification from the mini-grid. So they're selling clean water. They've got like 10 different income streams from this one mini-grid.

Now, is it fully sustainable, like full cost recovery? Not yet. Does he have in his mind? I asked him, I said, is this like an eighth grade science experiment or are going to make money from this? And he laughed. He said, no, no, I'm going to make money from this. I now know how to scale it.

But what's more important is even if he's not achieving full cost recovery from this business model, if it means that the World Bank or the government have to pay less subsidy to make sure that people have access to electricity, that means that you can reach more people more quickly.

So these are the innovations that are happening. This is the leapfrog. Figure out how to use digital loads and basically how do you remove the wire from the equation. Because honestly, even a few extra yards of copper wire to a house can mean that it's no longer affordable for someone and you don't achieve cost recovery.

And that's what we need to think through. There are a lot of interesting companies doing other innovations in this space. There's a company, there's two companies, one's called Moon and the other one's called Anka. And what they're doing is called Energy as a Service. Moon has traditionally done solar home systems. Anka has done mini-grids. This is in Madagascar, in a remote area. They're pairing together and they're saying, why don't we start some households out with mini-grids and they we'll get paid, you know, we're providing energy as a service instead of just like selling them the solar home system or, you know, leasing it to them. That they just pay a certain amount of month for energy. And as we realize that their consumption increases, we can then give them mini grid power. And then as that mini grid demand becomes peaks, we can then transfer them to the grid. It helps planning out how you do that electrification in the country.

Clarissa Lins: Can I just jump in? Yeah, because I agree with Andrew that there are so many examples when you look to country and to specific technologies. But I would say that two main routes, I'm keeping an eye on. The first one has to do with advanced fuels, so sustainable fuels. So I mentioned already sustainable aviation fuel, but you can think of green ammonia, you can think of, you know, bio-bunker, you name it, but they'll be needed for some of the hard to abate activities that we cannot fully electrify. And they need more innovation, they need more R &D spending and throughout the world, because there will be, you know, if you look to Africa, for instance, there's a huge potential as Brazil as in India for advancing bio-based technologies. This is one of the avenues I would say I would really keep an eye on.

The second one has to do with the long duration energy storage in many forms, through batteries, in many technologies and chemicals, but also in hydrogen or in hydro reservoirs, you name it. And the more that you have to rely on intermittent sources, the more we will need long-duration energy storage to be coupled to those sources to have resilient and reliable power grids.

And so I guess that there are so many solutions coming from so many parts of the world that we should really incentivize. The more money we can put into these, would say that we should benefit as a global society.

Andrew Herscowitz: Yeah, I want to add to that because this is in one of the reports that Espen is doing, talks about the solution for every country is going to be different. And long duration energy storage is a perfect example.

For people who aren't aware of what long duration energy storage is, you think of batteries or that can store power for a few hours. Long duration energy storage generally are solutions that allow you to store electricity for anywhere from eight hours to maybe three months.

And where does that work? It works in island countries that are heavily dependent on the importation of expensive fossil fuels, right? Think about like resorts that are running diesel generators all day long where they've got an income stream. But if they had an ability to do long duration energy storage, it might be more expensive now, but it's going to be less expensive than them running diesel generators all day long. So we're going to see the cost curve coming down on some of these technologies, but every country's need is going to be different.

Even like when it comes to Africa, I always tell people, you know, on that content, I'm like, don't be the first mover. Don't be the ones who are trying to bring down the cost curve. There are plenty of existing technologies that have not been scaled. Wind, solar have not been scaled in Africa. Use those existing technologies. Don't let people tell you you need to be producing green hydrogen right now. Don't produce green hydrogen right now because you're basically using electricity to create energy when all you really need is electricity right now.

Now, if you were to build the Inga Dam in the Congo and have 40 gigawatts of power, that can be a game changer because if you've got really low cost power, but you don't have off take, you can use that to produce some hydrogen. You could use that to create mega data centres on the continent and have off take.

Every country in Africa has its own resources available. This is why every country should take the best of the above technology approach. What's available and least expensive to them.

Robin Pomeroy: I'm really hearing such a diversity of technologies, of regional realities that mean there are dozens or hundreds of answers to kind of the questions that Espen and I have been asking.

Andrew Herscowitz: And AI will help us all figure it out about how everything should fit together, right?

Robin Pomeroy: And we're just at the start of that.

I wanted to ask you very quickly about the climate convention, the COPs. I think we've got one coming up near you, Clarissa, haven't we, this year?

Clarissa Lins: November, November in Belém, Pará, the state of Pará, so in the northern region of Brazil. Yes, November.

Robin Pomeroy: So I wonder you both or you three work in energy. So much of climate change is about energy. What do you think of the COP process at the moment? Is it helping the energy transition? Are there things that it should be doing better or things that it should not be doing? What can you tell me about the COPs?

Clarissa Lins: I guess that COPs are a multilateral approach to a global problem that we have. So it is very helpful in the sense that, you know, it helps to levelling the playing field in understanding what is at stake for the globe and for the world society. So I would say that this is one of the major benefits of the COP.

When you look to the solutions provided and the consequences of the process, then you have to look back to your own country and to figure out whether the public policies, whether the decision at the corporate levels, whether the knowledge at the universities, how are they reacting to, I would say, the global guidance that's given. So there is a global dialogue which is needed, which is beneficial for us to understand that we have to tackle together a global problem, while at the same time, there is a need to very specific and in-country development that might of course also benefit from international collaboration, but have to be dealt within your own country with your own institutions and so forth.

So having said that, COP30, which is to be held in Pará in November, has the huge challenge, you know, and the COP30 presidency has put it very clearly to deliver more action-oriented guidance.

It's not about new commitments. It's not about new announcements. It's not about, you know, new big milestones, but it's really about setting the tone for roadmaps on commitments that have already been made either at COP28 in Dubai or COP29 in Baku.

And I will highlight two of the most challenging ones. The first one is the financial track. So in Baku, the countries have agreed on establishing a 300 billion per year commitment by 2035, but developed countries to finance in energy transition the least developed ones. And also the need to establish a roadmap that these 300 billion go up to 1.33 trillion. So this is a huge challenge.

And it is expected that both the COP29 president and the COP30 president deliver together, you know, guidance around this financial track.

From an energy perspective, then you have to go back to the so-called global stock take that combined three elements. The first one is transitioning away from fossil fuel coupled with the need to triple the renewable energy generation by 2030 compared to 2022. And the second one doubled the level of annual efficiency by 2030 compared to 2022. So going to 4% instead of 2%. And there's where we have challenges. In terms of tripling the renewable capacity, we are apparently on track. In terms of doubling the energy efficiency, we are not on track. Last year, efficiency rates lowered to 1%. They were at 2, then they lowered to 1, and we have to go to 4.

And when we go to transitioning away from fossil fuel, then this is, I would say, a global commitment that has to be interpreted in each country. So those who are the heavy producers, are heavy end users, those are high importers, those where the economies rely on the oil rents, etc. So it's a combination of factors. And what I expect is that we'll have more advancement in the implementation.

So how to do it, how to deal with the challenges, who's going to pay for it, how to really engage with the end users, because

It's my understanding that we cannot approach this challenge without having a huge understanding of how to transform the demand for oil and gas.

Robin Pomeroy: Andrew, do you have an opinion on the climate cop?

Andrew Herscowitz: Yes, I've got strong opinions about it.

So so I hope that Brazil seizes the opportunity as a leader in the global south to inject a dose of reality into what needs to happen at these conferences. So much time is focused on trying to get countries like South Africa to retire a handful of coal plants, India quite a bit, Indonesia and others, that everyone seems to forget about the 700 million people who don't have access to electricity. And there won't be any energy transition, energy evolution, or energy revolution if 700 million people continue to have no access to electricity.

And if you ask any of those 700 million people how they feel about the energy transition, you can't ask them because they don't have electricity to communicate with you, to tell you what their opinions are about it.

What I'd really love to see happen is a commitment from everyone to say that we're going to solve this electricity access problem and focus on it because it's a solvable issue. We've solved it in countries all over the world. It's just a construction project that requires a little bit of money.

And we don't need to hear any more large financing commitments because these large financing commitments, I've worked for a development finance institution. I know how it works. It means that we will finance projects if they are bankable. That means we need to earn a certain return. And in fact, a lot of the financing commitments that have come out of past COPs have come from countries that say, yeah, we're going to finance all of this energy transition work, but we need to earn a return of 18%. I'm sorry, private sector will do that anyway.

So I don't need to hear any more big financing commitments from development finance institutions and multilateral development banks for anything that is not concessional, It needs to be low cost, no cost, or even below cost financing. If it's not that, I don't want to hear about it.

I would love to hear a commitment from, COP, for electricity access at a productive level of electricity so that people can emerge from poverty and that everybody can participate in the global economy in what we call an energy transition. That's where the focus should be from my viewpoint.

Espen Mehlum: Well, think this illustrates the diversity of what energy transition really means. It depends on who you are, where you live, do you have energy, do you not have energy, right? So this is really the realities that people around the world are facing.

It's what gives me really hope, I think, here as well, is that there's a lot of innovation happening. There's more innovation that is possible. We really need to put it at practice and make sure as well there can be a business case around it so the big investments can actually start flowing. And that's where I think we can see really energy security, equity and sustainability go hand in hand and faster than we see today.

Robin Pomeroy: Well, and that's the question I'd like to ask our two guests. Is there one thing that gives you hope when it comes to the energy transition?

Clarissa Lins: So what gives me hope is that the diversity of solutions that are possible and really the commitment of people in the energy field to find new ways of producing but also of consuming energy.

So the more I talk to young people first of all, to entrepreneurs, to public policymakers, to the private sector, to academia, to think tanks. We all want to improve the energy access, but also to improve, I would say, the state of the art in terms of energy services. So, it gives me hope.

Robin Pomeroy: Andrew?

Andrew Herscowitz: Look. I'm excited that we've got some of the smartest, hardest working people across the World Bank, African Development Bank, GEOP, Sustainable Energy for All, Rockefeller Foundation, and all kinds of other partners who are working on solving this.

But also, I'm really excited about the technology, as Clarissa mentioned, and how technology is offering solutions that not only are different solutions in terms of the type of electricity or the type of source of power, but also the offtake, the demand, the fact that that the growth of AI and data centres and even crypto mining is creating so much demand and the need for energy security that it increases the likelihood that some of these new solutions can be accelerated and become bankable over a shorter period of time.

So I'm quite hopeful that we're not only going to meet our target, but that we'll be able to exceed our target.

Robin Pomeroy: Wonderful. If anyone wants to find out more about the state of the energy transition across the world, they can find the Energy Transition Index on our website. Just remains for me to thank our guests on Radio Davos, Clarissa Lins at Catavento, thanks for joining us. And Andrew Herskovitz of Mission 300. Thanks both very much.

Thanks to you, Espen. I'll put a link in the show notes to your report, the Energy Transition Index.

You can find all our podcasts at wef.ch/podcasts. You can watch as well as listen to this one and we're doing more and more video podcasts. Find them on our website and on our YouTube channel.

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