Nature and Biodiversity

Lessons for the energy transition from the 2021 energy crisis

coal power, shown here, is being phased out as part of the attempt to save the planet

Energy shocks are 'likely to ripple through an economy and be felt by almost everyone.' Image: UNSPLASH/Sam LaRussa

Sean Fleming
Senior Writer, Forum Agenda
Our Impact
What's the World Economic Forum doing to accelerate action on Nature and Biodiversity?
The Big Picture
Explore and monitor how Energy Transition is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Energy Transition

  • Demand for gas is soaring as electricity producers shift away from coal.
  • The global energy supply chain is stretched almost to breaking point and every new disruption is creating problems.
  • This is partly the result of decarbonizing electricity production and shows how important it is that the ongoing energy transition is handled well.

As we head into the final quarter of 2021, a global energy crisis is sending shockwaves through economies and industry sectors around the world. In addition to the immediate shortages and price hikes, this crisis could also foreshadow the fallout from a badly handled energy transition.

Energy is vital to almost every aspect of modern life. From keeping the wheels of industry turning to powering the internet, heating and lighting people’s homes, to keeping transport moving, so much of what we rely on is energy-dependent. Energy shocks are therefore likely to ripple through an economy and be felt by almost everyone. When the price of gas and electricity goes up, so too will the prices of many other things.

Depleted supplies

Speaking to Bloomberg TV, Jeff Currie, global head of commodities research at Goldman Sachs, explained how demand for gas has risen as many coal-fired power stations have been decommissioned around the world. That has had the twin effect of pushing up prices and depleting global gas stocks.

“The supply chains are so severely depleted, the system cannot accommodate any type of disruption,” he said.

Currie expects energy prices to remain high and to go even higher as winter approaches in the northern hemisphere. In Currie’s view, rising energy prices could help to accelerate the energy transition, pointing out that higher prices make all forms of renewable energy more commercially attractive.

A stretched energy system

Roberto Bocca, Head of Shaping the Future of Energy and Materials at the World Economic Forum, believes everyone has a part to play in helping avoid the energy transition becoming a series of energy crises.

“The complexity of the energy transition is a fundamental issue for society with implications for all sectors and dimensions of life,” he says. “It is more than ‘let's do better, let's be more efficient’ – that is important, of course. But, there is a need to rethink the whole paradigm of how we consume (demand) and produce energy (supply).”

“The energy system is interconnected and stretched,” he says. “So, any anomaly that comes along can bring disruption with impact across the world.”

Bocca suggests that people should think differently about their relationship with energy, moving away from an abundance-of-energy mindset toward one that emphasises that it's a precious and constrained resource.

Have you read?

Scaling-up energy efficiencies

In homes, offices and businesses all over the world, energy is referred to as a utility. Push a button, flick a switch and it is there, ready to be used. But the complex infrastructure that connects the humble lightswitch, or even a not-so-humble wind turbine – to the rest of the electricity grid goes unseen.

For consumers, both domestic and industrial, this can lead to complacency around using energy, especially when the costly externalities of energy production and consumption are not embedded in the cost.

“It is complex,” Bocca agrees. “But it's not mystical. There are things you can do ... what is fundamental is that our behaviour has to change.”

Efficiencies can emerge from simple acts, such as using energy-efficient domestic light bulbs. It might feel small, but when millions of people make such a change, there can be a powerful multiplier effect.

And efficiencies can also emerge from more fundamental shifts in the way we approach energy consumption in cities and industrial clusters. “The efficiency that you can get from this kind of systemic approach is quite dramatic,” Bocca says.

Indeed, the World Economic Forum, alongside Accenture, has recently launched a Toolbox of Solutions to accelerate decarbonization in cities. The digital platform, part of the Net-Zero Carbon Cities programme, focuses on practical solutions that address clean electrification, efficiency and smart infrastructure.


New energy business models

From developing energy-efficient products to developing whole new fuel systems, like hydrogen and the infrastructure that goes with it, reconfiguring the global energy sector will require wide-reaching cooperation. That cooperation will sometimes be between businesses that might ordinarily see one another as competitors. The jealous guarding of intellectual property and feeling a sense of ownership over customers may have to give way to a more holistic outlook, based on the idea of being part of an energy ecosystem.

“We talk a lot about technology and innovation, which is important. But this is also about business model innovation,” Bocca says. Businesses need to be able to stay commercially viable and compliant, while also keeping up with change.

Regulators and policymakers must act to de-risk the new commercial landscape, he believes, to foster investment in new partnerships, new technologies and new services.

Powering energy literacy

The World Economic Forum’s Energy Transition Index (ETI) has been tracking the progress toward tackling energy-related greenhouse gas emissions for 10 years. The top 10 ETI countries account for around 2% of the world’s population and approximately 3% of energy-related CO2 emissions, according to the index.

a diagram showing how the energy transition has many moving parts
The energy transition – many moving parts. Image: World Economic Forum

Larger, more populous – and more polluting – countries will need to make more progress if the overall picture is to improve. But attempts at moving too suddenly can cause unrest and resistance to change.

If all stakeholders, from consumers and regulators to academia, non-governmental organizations and business leaders, become more energy literate, they may come to appreciate how they can bring about beneficial changes through the decisions they make.

The energy transition of the next 20 years is going to be complex, costly and - at times – very difficult to implement. Let’s not hide behind the challenge, let’s work together and solve it, Bocca says.


What's the World Economic Forum doing about the transition to clean energy?

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Nature and BiodiversityEnergy Transition
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

How to spot a nature crisis – and why we should use natural capital to combat it

Chunquan Zhu and Shivin Kohli

June 18, 2024

About Us



Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum