Executive summary Even as the global energy transition is plateauing due to equity challenges, major economies are showing signi昀椀cant progress. The frontiers of the global energy transition are been incorporated as a measure to determine constantly shifting as countries attempt to emerge country progress on the system performance out of various health, geopolitical and economic parameters. Only two countries – India and crises. The “polycrisis” has forced countries to Singapore – are making advances on all aspects reallocate resources and implement measures to of energy system performance. address near-term energy security and affordability constraints. It has also provided an opportunity to The window of opportunity for the energy transition think about how various aspects of the “energy is closing fast. The limited number of countries triangle” have evolved. Equity and inclusiveness simultaneously advancing across all aspects of evolved from focusing only on access to embracing the energy triangle highlights the challenges that sustained economic development. Security countries face in progressing along their energy took a leap from ensuring supplies towards transition pathways. The following themes emerge diversifying the energy mix. And sustainability now from analysing the drivers of past progress that can includes a wider form of clean energy beyond highlight the path for an accelerated transition: decarbonization, whereas transition readiness demands more focus on regulatory and 昀椀nancial The current energy transition trajectory puts environments. Considering the changing needs equity under pressure. of the energy frontier, the Energy Transition Index (ETI) framework has been revised this year to The global average ETI score has increased each incorporate a wider approach of balancing the consecutive year over the last decade, but the three imperatives of the energy triangle – equity, growth has plateaued in the past three years, due security and sustainability – while harnessing to rising challenges to the equity and inclusiveness transition enablers effectively. of the transition. Energy market volatilities resulting from macroeconomic and geopolitical The ETI benchmarks countries on their current developments over the past three years have led energy system performance and provides a to extreme price shocks, exacerbating energy forward-looking measure of transition readiness. poverty and stalling energy access. High fuel prices Over the past decade, the global ETI scores have affected the cost-competitiveness of energy improved by 10%, supported by an increase intensive industries, and the rising subsidy burden of 19% in transition readiness scores, but only poses a risk to economic growth. Low-income a 6% increase in system performance scores. countries have been disproportionately affected, The Nordic countries (Sweden, Denmark, facing simultaneous challenges from fuel price Norway and Finland) continue to maintain their in昀氀ation, food in昀氀ation and rising debt burden. top rankings, scoring highly on both system While performance on environmental sustainability performance and transition readiness. A few has grown the fastest and countries are prioritizing countries, such as Kenya and Azerbaijan, energy security after lessons from the energy crisis, jumped signi昀椀cantly in rank this year for making inclusiveness and equity considerations need to be aggressive efforts towards transition readiness addressed for a robust and resilient transition. by improving their regulatory environment and infrastructure. Importantly, in the last decade, the The centre of gravity for energy transition is world’s largest energy consumer, China, gained shifting towards emerging and developing 43% – approximately double the global average – economies. in its transition readiness scores, making its way into the top 20 as the only Asian country. This With increasing populations and economic growth report spotlights certain countries accomplishing in developing countries, particularly China and noticeable achievements or laying the groundwork India, the global demand for energy remains for a robust energy transition (see section 6). unfazed. Short-term effects from the energy crisis notwithstanding, all emerging economies show This edition of the report refocuses on the need consistent improvement on transition readiness, for urgent action towards the transition. Despite performing better than the global averages over making progress on decarbonization and improving a longer-term horizon. The improvements in the on infrastructure, the world still falls short of growth of clean jobs, infrastructure development achieving balanced progress on all aspects of the (including the addition of renewables capacity) energy triangle. Thus, “transition momentum” has and political commitments have been signi昀椀cant. Fostering Effective Energy Transition: 2023 Edition 4