WEF says the global energy transition momentum has been slowed by setbacks in energy equity, driven by rising energy prices while energy security continues to be tested by geopolitical tensions. SUPPLIED
THE World Economic Forum (WEF) said the sub-Saharan Africa region has had a 10% energy transition growth over the past decade, which is the strongest performance across all groups of its peers.
This comes even as the global energy transition momentum has been slowed by setbacks in energy equity, driven by rising energy prices, while energy security continues to be tested by geopolitical tensions.
According to the WEF’s Fostering Effective Energy Transition 2024 report released yesterday, global average Energy Transition Index (ETI) scores reached a record high but have been checked by the slowdown in the pace of the global energy transition, first identified in 2022, that has intensified in the past year.
The report indicates that 83% of countries achieved lower scores than last year on at least one of the primary performance dimensions of the energy transition – sustainability, equity and security.
It also shows that the three-year improvement in global ETI scores between 2021 and 2024 is almost four times less than the upswing over the 2018-2021 period.
The gap in overall ETI scores has narrowed between advanced and developing economies and the “centre of gravity” of the transition is moving to developing countries.
The sub-Saharan Africa region has notably had the highest gain of 58% in regulation and political commitment scores, alongside advancements in education and human capital.
“However, the region faces challenges in attracting global investments and fostering public-private partnerships to strengthen infrastructure and diversity in energy mix,” noted the report.
The region, which has 11% of the global population, accounts for 2% of total greenhouse gas emissions.
“We must ensure that the energy transition is equitable, in and across emerging and developed economies,” said Roberto Bocca, head of the WEF Centre for Energy and Materials.
“Transforming how we produce and consume energy is critical to success. We need to act on three key levers for the energy transition urgently: reforming the current energy system to reduce its emissions, deploying clean energy solutions at scale, and reducing energy intensity per unit of GDP.”
The ETI, which benchmarks 120 countries on their current energy system performance and on the readiness of their enabling environment, showed that while 107 countries demonstrated progress on their energy transition journeys in the past decade, the overall pace of the transition has slowed and balancing its different facets remains a key challenge.
“The global energy transition to a more equitable, secure and sustainable energy system is still progressing but has lost momentum in the face of increasing uncertainty worldwide,” the report noted.
South Africa, which ranks 84th in the 120 countries grouping, has a score 52.4 points and scores 4.0 on the G20 countries scale.
The report also noted that while the world remained off-track to meet Net-Zero ambitions by 2050 and keep global warming to no more than 1.5 °C as called for in the Paris Agreement, there has been notable progress in energy efficiency and a marked increase in the adoption of clean energy sources.
“With increasing global investments in renewables and significant growth in energy transition performance in sub-Saharan Africa over the past decade, there is optimism,” it said.
“Despite a recent slowdown in innovation progress and a drop in global start-up investments in 2023, there are areas where innovation is accelerating.”
It pointed to innovation as being a key enabling factor for the energy transition and can reduce costs, scale key technologies, renew and re-skill the workforce and attract investments.
Digital innovations, including generative artificial intelligence (GAI), offer significant opportunities to fill this gap and reinvent the energy industry by enhancing productivity.
The Accenture Strategy Group CEO, Muqsit Ashraf, said AI offered significant opportunities to reinvent the energy industry by enhancing productivity.
“C-suites consistently tell us a clear business case is a prerequisite for attracting investments in the energy transition, especially in the face of higher interest rates and the emerging talent shortage,” Ashraf said.
“We believe that a strong digital core, enabled by generative AI, can boost productivity, enhancing returns and talent availability and unlocking a new wave of investments.”
BUSINESS REPORT