As international locations proceed to make progress within the clear power transition, rooting the transition in financial, political and social practices is crucial to make sure that progress is irreversible, in accordance with the newest version of the World Financial Discussion board. Selling an environment friendly power transition 2021 report launched at this time.
In its 10e version, the report, revealed in collaboration with Accenture, is predicated on data from the Vitality Transition Index (ETI) 2021. The index compares 115 international locations on the present efficiency of their power programs within the three dimensions of the power triangle : financial growth and progress, environmental sustainability, and power safety and entry indicators – and their willingness to transition to safe, sustainable, inexpensive and inclusive power programs. This 12 months’s report makes use of a revised ETI methodology, which takes into consideration current adjustments within the international power panorama and the rising urgency for motion on local weather change.
“As we enter the last decade of motion and implementation on local weather change, the main target should even be on the pace and resilience of the transition. With the power transition going past the fruit at hand, sustained gradual progress might be tougher because of the altering threat panorama for the power transition ”, stated Roberto Bocca, Head of Vitality and supplies on the World Financial Discussion board.
Outcomes for 2021 present that 92 of the 115 ETI-tracked international locations have elevated their total rating over the previous 10 years, confirming the constructive course and regular momentum of the worldwide power transition.
Vital enhancements have been made to the scale of environmental sustainability and power entry and safety. Eight of the ten largest economies have pledged to achieve internet zero targets by mid-century. Annual international funding in power transition exceeded $ 500 billion for the primary time in 2020, regardless of the pandemic. The variety of individuals with out entry to electrical energy has fallen to lower than 800 million, from 1.2 billion individuals a decade in the past (2010). The rise in renewable power capability has specifically helped power importing international locations obtain simultaneous beneficial properties in environmental sustainability and power safety.
Nevertheless, the outcomes additionally present that solely 10% of nations have been capable of obtain common and constant beneficial properties of their total ETI rating over the previous decade. This highlights the inherent complexity of the power transition problem, as evidenced by the shortage of measurable progress within the dimension of financial growth and progress – primarily by tax implications, labor market upheavals and challenges of financial growth. accessibility ensuing from the power transition. As well as, the carbon depth of the power combine is rising in lots of rising economies in Asia and sub-Saharan Africa.
“A resilient and simply power transition that delivers sustainable and well timed outcomes would require system-wide transformation, together with reimagining the best way we stay and work, gas our economies, and produce and devour supplies,” stated Muqsit Ashraf, Senior Managing Director who leads Accenture’s power observe. “This in flip would require shut collaboration between coverage makers, enterprise leaders, power shoppers and innovators. The trail to such a balanced transition has been sluggish and daunting, however it’s gathering momentum and providing international locations and companies many alternatives for long-term progress and prosperity. “
The social, financial and geopolitical interdependencies of the power transition have uncovered vulnerability to systemic dangers and disruptions, which may threaten the progress of the power transition. This report makes 3 suggestions to strengthen the resilience of the power transition course of: (1) pursue a simply transition by specializing in measures to assist the financial system, employees and society; (2) amplify electrification whereas exploring different choices for the decarbonization of industries; (3) entice diversified and resilient sources of capital from the private and non-private sectors to finance multi-year and multi-year investments.
Stephanie Jamison, senior managing director who leads the utility observe at Accenture, stated resilience is an important idea for the clear power journey. “The function of electrical energy within the power system will improve dramatically by 2050, which is a giant transformation,” she stated. “Whereas it’s nice to see stronger renewable power sources emerge from COVID, there’s nonetheless a whole lot of work to be executed to additional advance the shift to zero carbon power and safe buy-in from COVID. a variety of stakeholders. ”
2021 ETI Nation Highlights
This 12 months’s report tracks progress revamped the previous decade. The ETI’s record of prime performers has remained broadly constant over this era, sharing widespread attributes resembling low ranges of fossil gas subsidies, enhanced power safety, and a powerful regulatory setting to drive the power transition. . The highest 10 international locations of the ETI 2021 are the international locations of Western and Northern Europe. Sweden
(1) leads the ETI for the fourth consecutive 12 months, adopted by Norway (2) and Denmark (3). All the highest 10 economies have considerably improved environmental sustainability, specifically by decreasing the carbon depth of their power combine, supported by sturdy political dedication and investments within the power transition.
the United Kingdom (7), France (9) and Germany (18) are the one G20 international locations among the many prime 20. Their progress is supported by sturdy efficiency in environmental sustainability, though their scores in financial progress and growth have declined over the previous decade as a result of accessibility considerations.
the United States (24) and Italy (27) improved the three dimensions of the power triangle, whereas strengthening their enabling setting. Japan (37) noticed reasonable enhancements in its total ETI rating, primarily as a result of sharp declines in per capita power use as a result of enhancements in power effectivity, though it continues to face power safety challenges as a result of elevated power imports.
China (68) and India (87), which collectively account for a 3rd of worldwide power demand, have each achieved sturdy enhancements over the previous decade, though coal continues to play an essential function of their power combine. China’s enhancements are primarily the results of decreasing the power depth of the financial system, beneficial properties in decarbonizing the power combine by the enlargement of renewable energies, and strengthening the enabling setting by funding and infrastructure. India has focused enhancements by subsidy reforms and fast enlargement of power entry, with sturdy political dedication and a regulatory setting for power transition.
Among the many international locations that export uncooked supplies, Canada (22), Australia (35), Russia (73) and Saudi Arabia (81) world chief within the dimensions of entry to power and safety, as a result of ample nationwide reserves. Nevertheless, they’ve displayed divergent trajectories over the previous decade. Australia improved its scores due to sustained will increase in its funding and capability in renewable power, and the phase-out of coal. Russia has improved its scores due to the strengthening of the enabling setting for power transition, though using renewables stays low and fossil gas exports stay excessive. The scores for Canada and Saudi Arabia declined barely.