High-income countries are leading the transition to a new energy architecture but still have work to do on environmental sustainability, according to the Global Energy Architecture Performance Index Report 2013, released by the World Economic Forum.
The index measures the strengths and weaknesses of countries’ energy systems from an integrated economic, environmental and energy security perspective. It is also designed to help countries manage and navigate the challenges that arise from this period of change which, according to the International Energy Agency (IEA), will require US$ 38 trillion of investment in energy supply infrastructure by 2035 to meet rising global demand.
The findings reveal that high-income countries have proven best at managing the transition to a new energy architecture. Norway ranks in first place in the index, where a strong energy policy coupled with multiple energy resources has delivered cheap, plentiful and relatively clean power and generated large national revenues.
With seven other European countries joining Norway in the top 10, the list is completed by New Zealand (5) and Colombia (6). No OPEC country features in the top 50, while the USA ranks 55th. Of the BRICS, Brazil leads in 21st place, followed by the Russian Federation (27), South Africa (59), India (62) and China (74).
However, the index also finds that high-income and rapidly growing countries alike often underperform across a wide range of environmental sustainability metrics. With demand for energy rapidly increasing at the same time as some nations are reconsidering costly renewable obligations and CO2 targets, the report calls for affirmative action to address this.
The report, produced in collaboration with Accenture, adds that many developing countries still struggle to supply citizens with basic energy needs, with 12% of countries analyzed providing electricity to less than 50% of their total population. The report also considers how issues around fossil-fuel subsidy, water use for energy production and effective management of resource wealth need addressing globally.
“Energy decisions can be simplified through a common understanding of the trade-offs they require,” explained Roberto Bocca, Senior Director, Head of Energy Industries, World Economic Forum. “With clear objectives to achieve a balanced energy system that is environmentally sustainable, drives the economy and is secure, decision-makers should facilitate quicker and more cost effective transitions. The index is a tool to help in this process.”
“The scale and complexity of the global energy industry demands a country-by-country approach to managing change,” said Arthur Hanna, Senior Managing Director, Energy Industry, Accenture, and a Member of the World Economic Forum’s Global Agenda Council on New Energy Architecture. “The Energy Architecture Performance Index helps nations take stock of their energy architecture challenges and identify specific focus areas coupled with best-in-class examples to use when managing their transition.”
“The WEF study has arrived at an excellent moment as it could provide essential input to the development of Romania’s future energy strategy started recently” declared Istvan Kocsolade, Manager, Energy Industry – Accenture România. “It will allow officials to understand the effects of past decisions and learn from the success stories of other countries. Moreover, this study could enable the development of regional energy strategies, where countries could complement each other’s energy resources and collaborate to achieve a more balanced and sustainable energy supply.”
About the Global Energy Architecture Performance Index Report 2013
The Global Energy Architecture Performance Index Report 2013 benefited from the guidance and support of an expert panel of advisers. It was produced in collaboration with Accenture. The views expressed in the report do not necessarily reflect those of the advisers to the project. The report includes perspectives from high-level representatives of industry, government, non-governmental organizations and academia. A full list of contributors can be found here.
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