Addendum on the methodology
This section presents the methodology for the global Energy Transition Index (ETI) 2018, a composite index that measures two main elements:
- A country’s energy system performance across the three imperatives of the energy triangle: 1) economic development and growth; 2) environmental sustainability; and 3) energy access and security
- A country’s energy transition readiness across six main areas that enable energy system improvement as part of the energy transition: 1) capital and investment; 2) regulation and political commitment; 3) stable institutions; 4) infrastructure and innovative business environment; 5) human capital and consumer participation; and 6) energy system structure
Methodology overview
The ETI focuses on tracking specific indicators to measure the energy system performance of a variety of countries. The overall ETI score and rank is the average of two scores (Figure A1).
Figure A1: Energy Transition Index indicators
Source: World Economic Forum with support from McKinsey & Company
System performance score90
Seventeen indicators are aggregated into three categories, one for each of the imperatives, to both score and rank the performance of each country’s energy system performance. These three category sub-scores are then averaged to generate the system performance score. The three sub-scores are:
- Environmental sustainability: The extent to which the energy system has been constructed to minimize negative environmental externalities
- Economic development and growth: The extent to which the energy system supports, rather than detracts from, economic development and growth
- Energy access and security: The extent to which the energy system places energy security at risk, and whether adequate access to energy is provided to all parts of the population
Transition readiness score
Twenty-three indicators are aggregated into six categories, one for each of the enabling dimensions, to both score and rank the transition readiness of each country’s energy system. These category sub-scores are averaged to generate the transition readiness score. The six sub-scores are:
- Capital and investment
- Regulation and political commitment
- Institutions and governance
- Infrastructure and innovative business environment
- Human capital and consumer participation
- Energy system structure
Indicators: Selection criteria and profiles
Where possible, the ETI team aimed to select indicators using the following criteria:
- Reliability: Using reliable source data from renowned institutions
- Quality: Selecting data that represents the best measure available given constraints; all potential data sets were reviewed by the expert panel for quality and verifiability, and those that did not meet these basic quality standards were discarded
- Completeness: Using data of adequate global and temporal coverage
- Reusability: Sourcing data from providers with which the ETI can work on a regular basis, thus allowing for data to be updated with ease
Where data is missing for a particular year, the latest available data point is extrapolated forwards.
Indicators profile
Figure A2 details each of the indicators selected to calculate the system performance score, the weight attributed to it within its category, what it measures and the energy system objective that it contributes to, either positively or negatively.
Figure A2: System performance score indicators
Source: World Economic Forum with support from McKinsey & Company
Figure A3 details each of the indicators selected to calculate the transition readiness score, the weight attributed to it within its category, what it measures and the enabling dimension that it contributes to, either positively or negatively.
Figure A3: Transition readiness score indicators
Source: World Economic Forum with support from McKinsey & Company
Note 91: Countries’ commitment to NDCs is evaluated based on their participation in the Paris Agreement, the rati cation of the agreement, the ambition level of the NDC (based on Carbon Action Tracker data) and the countries’ current trajectories to meet the 2030 targets (based on PBL data).
