System Value

To keep global temperature increases below 1.5 degrees, the economy and supporting energy system need to change, and how we value the energy system is at the heart of that change.

Introducing System Value

Traditionally, cost has been a key driver for decision making when investing in low carbon technologies, business models or initiatives. But to accelerate actions and investments for a net zero carbon future, a new lens is needed – one which highlights a range of benefits and broader value. System Value is this new lens for decision making.

System Value is a holistic framework that evaluates economic, environmental, social, and technical outcomes of potential energy solutions. The framework aims to shift political and commercial focus beyond cost to include value. Policies, investments, and solutions can be evaluated to assess their impact on a range of outcomes.

System Value can be used for dialogues to align public and private stakeholders, investment decisions, investor conversations, rates cases, policy creation or advocacy.

System Value and Net Zero

The World Economic Forum is applying the System Value framework to drive dialogues and programs which aim to accelerate the clean energy transition. The framework helps focus on those solutions and actions which not only reduce emissions, but also help deliver economic benefits such as job creation and health benefits from better air quality. For example:

  • The Energy Transition Index considers system value as a key framework to build a resilient transition, discussing how it can be applied in local contexts during country roundtables

  • The Net Zero Carbon Cities program uses the framework to help city stakeholders create alignment on goals and outcomes between government leaders and a range of business investors in order to prioritize decarbonization interventions. The framework is a useful starting point to help identify both short term priorities, as well as the creation of long-term roadmaps.

  • The Industrial clusters initiative uses the framework to pursue solutions that maximize system value beyond GHG emissions reduction - pursuing collaborative actions that improve outcomes across the economy, the environment, society, and the energy system. 

In addition, the Framework is being used as a guide to creation net zero maps for various countries, both with the Forum’s input and beyond.

The path to maximise System Value

Path to maximise System Value
Image: World Economic Forum and Accenture

“Shifting the narrative of the energy transition towards system value is critical for society and the economy.”

—Henrik Anderson, CEO Vestas Wind Systems

With special thanks to Henrik Andersen, CEO of Vestas and Chair of the World Economic Forum's Electricity Industry community for leading this work in collaboration with CEOs from electricity companies around the world.

Additional thanks to the team at Accenture for supporting the work.

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