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There is a pressing need for more and better energy services to fuel economic development and ensure energy security. Countries are building energy systems to power the factories and cities where at least an additional billion middle class consumers will work and live by 2030. The speed and scale of this change is unprecedented. It is driven by rapid population growth, urbanization and economic development.
At the same time, the current model of development poses threats to the environment. Local side effects include pollution, land degradation, forest fires and water scarcity. Globally, climate change creates increased risk of extreme weather events such as floods and drought, as well as irreversible changes to our ecosystem, such as sea level rise, forest loss and ocean acidification. Climate change is already having an impact on millions of people, particularly the world’s most vulnerable.
These needs cannot be achieved at the expense of each other.
Changes across the energy system are taking place slowly, due to its sheer size and complexity. Energy system change cuts across power generation, transport, residential and commercial buildings, industry and agriculture. Across sectors, new technologies and business models have been developed, but are struggling to achieve sufficient scale within a system designed for incumbent technologies and business models.
In power generation, alternative energy sources such as renewable energy are growing rapidly, but from a low base and they still account for about 10% of the global power system of which more than half is hydro. In transport, build-out of supporting infrastructure and behavioral change are key for the transition. In buildings, much energy is wasted, despite the potential for profitable energy efficiency measures. In industry, the choice between different types of energy may be restricted by the nature of the industrial processes.
Meanwhile institutions: market structures, standards, policies, regulations and financing models, are both a source of essential system stability and of considerable lock-in and inertia. In many places institutions remain underdeveloped, unable to support energy expansion.
In this complex context, the decision-makers who need to drive change are asked to solve many different demands simultaneously. These include local, regional and global demands. They include demands from many different interest groups. All of this is in a context of high uncertainty: of for example oil and gas prices, the costs of renewable energy technologies and the price of CO2, resulting in varying projections of how energy demand and supply options may unfold.
Decision-makers must make difficult trade-offs, on how to balance competing demands, on where to invest capital and on where to focus their time and attention.
The goal of the Energy Transitions Commission is to help energy policy and investment decision-making meet the twin objectives of economic development and climate change mitigation.
To do so, it aims to provide a trusted fact base and a set of analytical and policy insights for decision-makers, both public and private. We seek to understand what it will really take over the next 15 years – across policies, market mechanisms, business models, finance, technologies and institutions – to foster a credible, accelerating transition towards a universal, clean energy system.
Ultimately, we want to ensure the world has access to the energy it needs, and cleaner energy, for a sustainable future.