By Joshua Isaac
A new World Economic Forum report warns that the global transition to more secure and suitable energy systems and efforts to keep global warming below 1.5C, as called for in the Paris Agreement, has lost momentum in the face of increasing uncertainties worldwide.
According to the report, the overall pace of global energy transition, including in Africa, has slowed over the past decade, with global volatilities such as heightened geopolitical tensions, economic fluctuations, and technological shifts complicating its speed and trajectory.
“We must ensure that the energy transition is equitable in and across emerging and developed economies. Transforming how we produce and consume energy is critical to success. We need to act on three key levers for the energy transition urgently: reforming the current energy system to reduce its emissions, deploying clean energy solutions at scale, and reducing energy intensity per unit of GDP,” Roberto Bocca, Head of the Centre for Energy and Materials, World Economic Forum, said during the report’s release in Geneva.
The Forum’s report uses the energy transition index (ETI) to benchmark 120 countries on the performance of their current energy systems, focusing on balancing equity, environmental sustainability, energy security, and transition readiness.
Based on the 2024 report findings, countries that benefit from high political commitment, substantial investments in research and development, and expanded clean energy adoption – accelerated by the regional geopolitical situation, energy-efficiency policies, and carbon pricing, had higher ETI rankings.
However, although the gap in the overall ETI scores has narrowed between advanced and developing economies, the report finds that clean energy investment continues to be concentrated in advanced economies, underscoring the need for financial support from advanced nations to facilitate an equitable energy transition in emerging and developing nations and forward-thinking policy-making in all nations to foster conducive investment conditions.
With a nonexistent universal solution, the report strongly recommends tailored policies to address each country’s unique needs based on income level, national energy resources and needs, and regional context.
“This year’s ETI delivers a clear message: urgent action is needed. Global decision-makers must make bold moves to regain momentum in the transition toward an equitable, secure, and sustainable energy future.
This is critical for people, entire economies, and the fight against climate change,” said Espen Mehlum, Head of Energy Transition Intelligence and Regional Acceleration, at the World Economic Forum.
The report indicates that the slowdown in the pace of the global energy transition, first identified in 2022, has intensified in the past year. The global ETI scores between 2021 and 2024 are almost four times less than the 2018-2021 period scores.
Furthermore, 83% of countries achieved lower scores than last year on at least one of the primary performance dimensions of the energy transition—sustainability, equity, and security.
According to the report, the world remains off-track to meet net-zero ambitions by 2050. However, notable progress has been made in energy efficiency and adopting clean energy sources. The report recommends that innovations can be leveraged to regain the energy transition momentum, reduce costs, scale key technologies, renew and reskill the workforce, and attract investments.
Digital innovations, including generative artificial intelligence (AI), offer significant opportunities to fill this gap and reinvent the energy industry by enhancing productivity.
Generative AI’s ability to analyze vast quantities of data can, among other benefits, provide innovative forecasts and solutions or streamline existing operations to increase efficiencies.
However, to fully realize this potential, the report reads that it will be crucial to address the risks and challenges posed by these technologies responsibly and equitably.
Muqsit Ashraf, Group Chief Executive-Accenture Strategy, said: “C-suites consistently tell us a clear business case is a prerequisite for attracting investments in the energy transition, especially in the face of higher interest rates and the emerging talent shortage. We believe that a strong digital core, enabled by generative AI, can boost productivity, enhance returns and talent availability, and unlock a new wave of investments.”
