Energy transition The ETI provides a data-driven framework to per unit of output or product – a basic measure readiness is measure and understand the performance of of energy ef昀椀ciency), to encourage responsible increasingly energy systems and readiness for energy transition consumption through lower energy and emissions shaping countries’ across countries focusing on the transition. footprint per capita, and to increase the share of competitiveness Given the emerging landscape and its potential clean energy in 昀椀nal demand, are essential. strategy, as they implications for energy transition decision-making, incubate nascent the ETI framework (Figure 2) has been updated The progress on energy transition is determined by industries to to ensure relevance and usefulness for making the extent to which a robust enabling environment decisions. While the energy triangle remains valid can be created. A robust regulatory framework support future – with a balanced approach towards the three and ability to attract and deploy capital on a large economic growth. priorities of equity, security and sustainability – scale remain the core components of an enabling the updated ETI framework identi昀椀es speci昀椀c environment. In addition to a comprehensive policy components of these dimensions. framework for renewable energy, energy ef昀椀ciency and energy access, regulatory frameworks The equitable dimension of the energy triangle is need to be aligned with a robust, ambitious and rooted in several aspects. It aims to ensure affordable credible roadmap to net zero, supported by access to modern and clean forms of energy for ef昀椀cient pricing of carbon. An investment climate all. It focuses on providing continuity of economic characterized by low cost of capital, liquidity in activities through competitive energy prices. It also domestic markets and attractiveness to foreign emphasizes maintaining cost-re昀氀ective energy direct investment is a strong enabler for mobilizing pricing while implementing mechanisms to protect increasing levels of capital for the energy transition. vulnerable consumers and small businesses. In Additionally, advanced economies need to meet addition, it leverages the green growth momentum the commitment of mobilizing $100 billion of to create shared prosperity. climate 昀椀nance annually to developing countries. Energy transition readiness is increasingly shaping Lessons from the recent energy crisis are re昀氀ected countries’ competitiveness strategy, as they in the de昀椀nition of the secure dimension. Supply incubate nascent industries to support future security through diversi昀椀cation remains important economic growth. Factors such as a skilled across three levers of diversi昀椀cation – in the energy workforce, innovation, and physical and digital mix, in their energy trade partners and in the infrastructure are essential, which are explicitly sources of electricity generation. Resilience, both in acknowledged as part of the revised ETI framework. gas supplies and the power system, is instrumental for energy security. In addition, as the number and Momentum range of power generation and management assets increase as a result of decentralization, reliability of In addition to improving system performance grids becomes critical. Future iterations can include through a balanced energy triangle and creating a other sources of resilience, such as secure supply robust enabling environment, consistent progress of critical minerals, different forms of energy storage, is essential for a timely and effective transition. grid interconnections and demand response upon This report proposes “momentum” as such a availability of robust, timely and consistent data. measure for energy transition to provide countries with an additional layer of benchmarking with Demand- and supply-side metrics constitute the peer economies. The ideation of momentum sustainable dimension. Supply-side sustainability considers different starting points, country-speci昀椀c requires the reduction of CO2 and methane intensity circumstances and energy system structures, and of energy supply. In addition to supply-side focuses on the short-term historical growth rate of measures, efforts to reduce the energy intensity the equitable, secure and sustainable dimensions of the economy (the quantity of energy required of the energy system. Fostering Effective Energy Transition: 2023 Edition 9