The ETI 2023 features a revised framework for effective decision-making in the evolving global energy landscape.

The ETI provides a data-driven framework to measure and understand the performance of energy systems and readiness for energy transition across countries focusing on the transition. Given the emerging landscape and its potential implications for energy transition decision-making, the ETI framework (Figure 2) has been updated to ensure relevance and usefulness for making decisions. While the energy triangle remains valid – with a balanced approach towards the three priorities of equity, security and sustainability – the updated ETI framework identifies specific components of these dimensions.

The equitable dimension of the energy triangle is rooted in several aspects. It aims to ensure affordable access to modern and clean forms of energy for all. It focuses on providing continuity of economic activities through competitive energy prices. It also emphasizes maintaining cost-reflective energy pricing while implementing mechanisms to protect vulnerable consumers and small businesses. In addition, it leverages the green growth momentum to create shared prosperity.

Lessons from the recent energy crisis are reflected in the definition of the secure dimension. Supply security through diversification remains important across three levers of diversification – in the energy mix, in their energy trade partners, and in the sources of electricity generation. Resilience, both in gas supplies and the power system, is instrumental for energy security. In addition, as the number and range of power generation and management assets increase as a result of decentralization, reliability of grids becomes critical. Future iterations can include other sources of resilience, such as secure supply of critical minerals, different forms of energy storage, grid interconnections and demand response upon availability of robust, timely and consistent data.

Demand- and supply-side metrics constitute the sustainable dimension. Supply-side sustainability requires the reduction of CO2 and methane intensity of energy supply. In addition to supply-side measures, efforts to reduce the energy intensity of the economy (the quantity of energy required per unit of output or product – a basic measure of energy efficiency), to encourage responsible consumption through lower energy and emissions footprint per capita, and to increase the share of clean energy in final demand, are essential.

The progress on energy transition is determined by the extent to which a robust enabling environment can be created. A robust regulatory framework and ability to attract and deploy capital on a large scale remain the core components of an enabling environment. In addition to a comprehensive policy framework for renewable energy, energy efficiency and energy access, regulatory frameworks need to be aligned with a robust, ambitious and credible roadmap to net zero, supported by efficient pricing of carbon. An investment climate characterized by low cost of capital, liquidity in domestic markets and attractiveness to foreign direct investment is a strong enabler for mobilizing increasing levels of capital for the energy transition. Additionally, advanced economies need to meet the commitment of mobilizing $100 billion of climate finance annually to developing countries. Energy transition readiness is increasingly shaping countries’ competitiveness strategy, as they incubate nascent industries to support future economic growth. Factors such as a skilled workforce, innovation, and physical and digital infrastructure are essential, which are explicitly acknowledged as part of the revised ETI framework.

In addition to improving system performance through a balanced energy triangle and creating a robust enabling environment, consistent progress is essential for a timely and effective transition. This report proposes “momentum” as such a measure for energy transition to provide countries with an additional layer of benchmarking with peer economies. The ideation of momentum considers different starting points, country-specific circumstances and energy system structures, and focuses on the short-term historical growth rate of the equitable, secure and sustainable dimensions of the energy system.

Figure 2: Energy Transition Index update - performance and readiness

Figure 3: Transition momentum