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Published: 20 April 2021

Fostering Effective Energy Transition 2021 edition

2. The Energy Transition Index in a decade to deliver

The ETI provides a data-driven framework to foster understanding of the performance and readiness of energy systems across countries for transition. This year’s edition includes methodological updates to reflect changes in the global energy landscape and the urgency of the task ahead, particularly in taking actions that will reduce carbon emissions.

Previously published as the Energy Architecture Performance Index (EAPI) series from 2013 to 2017, the ETI was developed to reflect the interdependencies of the energy system transformation with the macro-economic, political, regulatory, and social factors that determine a country’s readiness for transition.

The ETI framework is composed of two equally weighted sub-indices the current energy system performance and the enabling environment for the energy transition.

An effective energy transition can be defined as a timely transition towards a more inclusive, sustainable, affordable, and secure energy system that provides solutions to global energy-related challenges, while creating value for business and society, without compromising the balance of the energy triangle.

System performance provides an assessment of a country’s energy system performance across three key priorities:

  • the ability to support economic development and growth
  • universal access to secure and reliable energy supply
  • environmental sustainability across the energy value chain

The objective of energy transition in a country should be to simultaneously deliver across these three priorities, thereby maintaining a balanced energy triangle. Pursuing a long-term goal of a balanced energy triangle can support the choice of appropriate policies and instruments as well as synchronize efforts across countries.

The progress on energy transition in a country is determined by the extent to which a robust enabling environment can be created. This includes political commitment, a flexible regulatory structure, a stable business environment, incentives for investments and innovation, consumer awareness, and the adoption of new technologies. The ETI measures progress along these dimensions in the transition readiness sub-index. The energy transition is not restricted to linear shifts in fuel mix or the substitution of production technologies. Rather, the social, economic, and technological systems need to co-evolve13 to shape the transition14.

Countries are scored along 39 indicators (see Appendix: Methodology) on a scale of 0 to 100. Countries scoring the global maximum on a given indicator are assigned a score of 100 on that indicator.

Given the systemic and endogenous nature of the energy transition, country scores are the result of a blend of factors including resource endowments, geography, climate, demography, and economic structure. Moreover, country scores in some dimensions are based on factors beyond the scope of national decision-making, such as commodity market volatility, geopolitics, international climate change action and financial market sentiment. Country rankings should therefore be considered in the context of a country’s unique set of circumstances and not a clear-cut diagnosis of energy transition accomplishment.

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