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Global Energy Transition Loses Momentum: WEF Report

Photo by Karsten Würth / Unsplash

Geneva, Switzerland - As indicated in a recently released report by the World Economic Forum (WEF), the global energy transition has encountered a significant obstacle due to mounting economic uncertainty and geopolitical tensions.

The annual report indicates that 107/120 analyzed countries demonstrated improved energy transition performance over the past decade, but the overall momentum has diminished. 

The three-year improvement in global ETI scores between 2021 and 2024 is nearly four times less than the upswing observed over the 2018-2021 period.

European nations dominated the top rankings, with Sweden, Denmark, and Finland occupying the top three positions. France, joining Switzerland, ranked in the top five for the first time.

Among the G20 economies, France (5), Germany (11), Brazil (12), the United Kingdom (13), China (17), and the United States (19) were among the top 20.

The report indicated a narrowing gap between advanced and developing economies in overall ETI scores. 

Nevertheless, investment in clean energy remains concentrated in advanced economies and China.

"It is of the utmost importance that the energy transition be equitable, both within and between emerging and developed economies," stated Roberto Bocca, Head of the Centre for Energy and Materials at the World Economic Forum.

The report indicated that 83% of countries scored lower than the previous year in at least one of the three key performance dimensions: sustainability, equity, and security.

The report's findings indicate a deceleration in the pace of transition, as evidenced by 83% of countries scoring lower than last year in at least one of the three key performance dimensions: sustainability, equity, and security. 

The rise in energy prices in recent years has adversely affected energy equity.

Despite the observed progress in energy efficiency and clean energy adoption, the world still needs to catch up to meet the 2050 net-zero targets. 

The WEF emphasizes the necessity for prompt action, advocating for reforms to existing energy systems, the extensive deployment of clean energy solutions, and a reduction in energy intensity per unit of GDP.

The report also identifies the potential of digital innovations, including generative AI, to accelerate the energy transition. 

These technologies have the potential to enhance productivity and streamline operations in the energy sector, thereby facilitating a new wave of investments.