Head, Centre for Energy and Materials; Member of the Executive Committee,
World Economic Forum
Global Strategy Lead,
The transformation of the global energy system is well under way. In just over a decade, investments across multiple forms of renewable energy have overtaken investments in fossil fuels. Energy and climate policies now take centre stage in domestic and international affairs. The geopolitical balance of energy has shifted significantly, and new superpowers have emerged in renewable energy component manufacturing, critical minerals and clean technology. The frontiers of energy innovation have been progressively redefined, and thousands of entrepreneurs are working to remake this huge industry. Enabled by mounting scientific evidence, a steady rhythm of extreme weather events and decades of awareness campaigns, climate consciousness is embedded in the public psyche. The Energy Transition Index (ETI) has supported decision-makers through this period, with a robust, consistent and comprehensive framework and a transparent fact base.
Despite the strong momentum, the energy transition has been challenged by near-term exigencies. Following the COVID-19 pandemic, a combination of economic factors and supply chain constraints led to affordability challenges, shortages and blackouts in different parts of the world. The recent energy crisis, a result of the Russia-Ukraine war, is the most severe in decades, leading to the highest levels of inflation in decades, a cost-of-living crisis and macroeconomic instabilities. While investments and policy measures for energy transition have amplified despite the volatile environment, the delicate balance of the energy security architecture, and the adverse effects on vulnerable households and developing countries, demonstrate the importance of balancing the imperatives of security, equity and sustainability for an effective energy transition.
Considering today’s context, we have updated the ETI framework to ensure its usefulness for decision-making. The revisions include the improved delineation of inclusiveness and equity, the reprioritization of energy security, the sharpening of the enabling environment scope, and the articulation of transition momentum to complement energy system performance and transition readiness to provide an in-depth view of how fast or slow a country is transitioning, beyond the snapshot values.
The actions taken in the early years of this decade of delivery will be critical in ensuring that strong, long-term ambition is supported by immediate progress. The focus needs to be on enhancing an equitable transition which has been traded off rather than enabled by the focus on security and sustainability. The energy transition must be made resilient to maintain speed under current volatilities and during potential future domestic or international disruptions. Resilience needs to be built into the transition to maintain progress throughout ongoing and future disruptions as COVID-19 and the energy crisis will not be the only international events in the coming decade and beyond.
Through this effort, the World Economic Forum encourages the sharing of best practices and the use of its platform for effective public‑private collaboration to facilitate the energy transition process around the world.