Urgent action needed to ensure a resilient energy transition amid severe global challenges

A special report on the state of the global energy transition, released by the World Economic Forum indicates that urgent action is required by both private and public sectors to ensure a resilient transition as the world faces the most severe energy crisis since the 1970s.

According to the report, Fostering Effective Energy Transition 2022, the urgency for countries to accelerate a holistic energy transition is reinforced by high fuel prices, commodities’ shortages, insufficient headway on achieving the climate goals and slow progress on energy justice and access.

Building on 10 years of the Energy Transition Index, an annual country benchmarking report, this special edition report, launched in collaboration with Accenture, details key recommendations for governments, companies, consumers and other stakeholders on how to progress the energy transition.

Prioritizing a resilient energy transition and diversification of the energy mix is crucial in responding to energy market volatility.

Roberto Bocca, Head of Energy, Materials and Infrastructure, World Economic Forum, said “Countries are at risk of future events compounding the disruption of their energy supply chain at a time when the window to prevent the worst consequences of climate change is closing fast.

The report also reveals the structural barriers to balancing energy affordability, security and availability with sustainability.

To navigate this challenging situation, countries must pursue diversification on two fronts – not only in the domestic energy mix in the long term but also in considering their fuels and energy suppliers in the shorter term. Most countries rely on just a handful of trade partners to meet their energy requirements and have a deficient diversification of energy sources, providing limited flexibility to deal with disruptions. The report notes that of 34 countries with advanced economies, 11 rely on only three trade partners for over 70% of their fuel imports.

Espen Mehlum, Head of Energy, Materials and Infrastructure Programme for Benchmarking, World Economic Forum, said “The current energy crisis reveals just how important energy is to people and the economy,” It is now critical to tackle the structural risks that have become evident while also increasing momentum on climate action.

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