Fostering Effective Energy Transition 2023

After a decade of progress, the global energy transition has plateaued amid the global energy crisis and geopolitical volatilities, according to the World Economic Forum's Fostering Effective Energy Transition 2023 report. The Energy Transition Index, which benchmarks 120 countries on their current energy system performance and on the readiness of their enabling environment, finds that while there has been broad progress on clean, sustainable energy, there are emerging challenges to the equity of the transition – just, affordable access to energy and sustained economic development – due to countries shifting their focus to energy security.

This year, the ETI used an updated framework reflecting emerging shifts in the global energy landscape. This edition also evaluated countries’ “transition momentum” for the first time to highlight the urgency of consistent progress on timely and effective transition.

Enabled by increasing volumes of clean energy investments, improving regulatory frameworks, technological innovations and urgency to address the climate crisis, some long-term trends of global energy transition are positive. Over the past decade, 95% of countries have improved their total ETI score, with improvements more pronounced for countries that consume a large amount of energy.

1. Global average ETI scores increased by 10% since 2014, but showed only marginal growth in the past three years.

2. Only 18% of countries in 2023 have balanced the imperatives of the energy triangle

3. Equity was compromised as the transition centered on secure and sustainable

4. The top 10 countries account for only 2% of global CO2 emissions from fuel combustion and 4% of total energy supply

5. Only 41 countries have made steady progress in the past decade

Of the 120 countries, 113 have made progress over the last decade but only 55 have improved their scores by more than 10 percentage points.

Achieving our long-term energy transition goals requires sustained momentum, even in the face of near-term macroeconomic and geopolitical disruptions. Only two major economies, India and Singapore, are showing sustained momentum on building energy equity, sustainability and security. The rest of the world’s energy transition momentum is insufficient. And with ETI scores plateauing, the window of opportunity to resolve this is closing.

The lack of consistent and balanced progress highlights the challenge many countries face while navigating the energy transition. In response, countries need to assess their own transition readiness—and then plan to resolve them (or have a roadmap to resolution) before the decade is over.

Policies and partnerships will be at the core of shaping a balanced energy transition but only if managed effectively, by encouraging investments in clean energy, promoting innovation, encouraging energy efficiency and ensuring that the transition benefits all segments of society.