The following sections explore and compare regional performance: first, by comparing the average performance of regions/economic clusters to identify the key challenges each faces, and second, by comparing the scores of individual countries within each region/economic cluster. This aims to highlight performance and challenges across the dimensions of the energy triangle, identify successful transitions and provide best practices.
Figure 3: Average EAPI 2014 Score by Region/Cluster
- Figure 3 is a ‘box’ or ‘spread’ chart
- Spread charts show the distribution of a dataset – in this case the different economic/regional clusters’ average Energy Architecture Performance scores
- The silver bars are the spread of data from minimum, median to the maximum value
- The blue boxes show the quartiles
- Quartiles are a set of values that divide the data set into four equal groups, each representing a fourth of the sample
- The upper quartile represents the split of the highest 25% of data – the top performers
- The lower quartile represents the split of the lowest 25% of data – the bottom performers
See Definitions section for further explanation of the graph structure and economic/regional clusters
EU28, OECD and Nordic economies are the top performing regions/economic clusters across the index, with average scores of 0.62, 0.63 and 0.68 respectively. This result underlines the bearing that economic wealth has on the performance of an energy system. In 2012, the average GDP per capita across OECD economies was nearly US$ 40,000,13 against the average in sub-Saharan Africa of just over US$ 2,000, one of the lowest-performing regions with an overall score of 0.43. Higher-income economies, with GDP largely dominated by the service sector, have been more successful in focusing on the environmental performance of their energy systems. They have adopted efficiency measures, invested in renewable technologies and put in place incentives for their adoption.
Industrializing economies and clusters such as BRICS, ASEAN and Developing Asia are characterized by more energy-intensive economies – as highlighted by the lower average scores for these regions in the energy intensity indicator (Table 3). Table 3 also draws attention to the low performance of these industrializing clusters in the carbon-intensity of the power-generating sector – averaging 0.36 against the 0.68 average of EU28, OCED and Nordic economies. Although BRICS, ASEAN and Developing Asia clusters fall within the same score range as OECD, EU28 and Nordic economies in the economic growth and development dimension, their scores diverge more widely in environmental sustainability and energy security and access dimensions, highlighting the different priorities of these economies.
Table 3: Average regional/cluster ranking per individual indicator, energy triangle dimension and overall EAPI.
Ranking from 1 (best) to 124 (worst)
|GDP per unit of energy use||70||84||42||94||75||36||79||54||56||39||46||88|
|Fuel Imports (%GDP)||75||44||82||70||67||75||44||42||67||60||58||60|
|Super Gasoline – Level of Price Distortion through subsidy or tax||66||53||28||73||64||44||101||73||65||54||59||60|
|Diesel – Level of Price Distortion through subsidy or tax||83||66||21||76||83||29||109||58||69||42||69||52|
|Electricity Prices for Industry||21||19||64||4||14||38||n/a||20||35||33||32||1|
|Fuel Exports (% GDP)||50||68||38||46||71||61||35||57||81||68||72||75|
|Economic Growth and Development||73||47||44||90||79||33||96||38||53||32||47||84|
|Alternative and nuclear energy (% of total energy use, incl. Biomass)||65||64||72||80||55||63||110||28||51||61||52||20|
|Nitrous oxide emissions in energy sector / per capita||50||80||72||45||52||96||50||111||57||102||49||37|
|Methane Emissions from Energy sector / per capita||70||78||77||82||56||61||84||51||42||62||49||49|
|CO2 emissions from electricity production / per kWh||89||83||63||57||87||57||95||20||60||54||48||52|
|PM10, country level||71||55||43||61||87||32||90||18||61||35||70||75|
|Average Fuel Economy for passenger cars (l/km)||75||40||20||34||78||16||87||38||81||27||81||46|
|Quality of Electricity Supply||61||77||51||76||78||31||56||8||65||26||75||95|
|Percentage of population using solid fuels for cooking||62||67||51||56||87||14||6||1||65||7||63||108|
|Energy imports, net (% of energy use)||57||44||82||58||49||87||38||48||72||78||60||52|
|Diversity of TPES (Herfindahl index)||50||55||44||67||57||36||96||26||67||30||65||92|
|Diversification of Import Counterparts (Herfindahl Index)||25||5||50||57||31||40||30||55||54||33||48||54|
|Energy Security and Access||70||63||55||63||82||35||54||8||72||27||70||111|
|Energy Architecture Performance Index||76||52||49||72||85||27||97||12||62||24||53||96|
The relationship between performance on the energy triangle and per capita GDP is reversed in the case of the Middle East and North Africa region. MENA achieves the lowest average performance at 0.42 across all the regions/economic clusters although average GDP per capita of US$ 15,000 is significantly higher than the next best performer, sub-Saharan Africa. As the region with the world’s greatest endowment of natural resources, MENA performs significantly above average for net energy exports at 0.54 and for contribution of fuel exports to GDP at 0.51 against the regional averages of 0.39 and 0.14 respectively. The significant contribution of fuel exports to the economy illustrates the over-dependence of the region on the hydrocarbon industry. The high performance in energy security and export-related indicators is negatively impacted by the region’s scores in economic growth and development and environmental sustainability. These are the lowest across all regions at 0.21 and 0.26 respectively – well below the average of 0.47 and 0.49. The key driving factor is the pervasiveness of fossil fuel subsidies, which weighs on the regions’ economy, brings about inefficient energy use and hinders investment into renewable energy sources.
Although some regions/clusters are defined by similar challenges, average regional scores show varied performance of individual countries. The largest variations are in North America and the EU28, highlighting the divergence of energy systems within these regions. For example, the North American continent includes high performers such as Costa Rica – one of the top 10 performers globally – and Haiti, which in 116th place is one of the lowest ranking. This variance highlights the regional disparity between import-dependent countries of the Caribbean and Central America – which receive lower scores in energy security and economic growth and development – and countries such as Costa Rica, the US and Canada which are tackling energy security through aggressive deployment of renewable technologies, and increased focus on developing domestic natural resources in the case of Canada and the US. Mexico’s energy reform is also expected to play a key role in the economic and energy security landscape of the country and region.
Among the lowest-performing regions of the Middle East and North Africa and sub-Saharan Africa, the spread of scores underlines the potential for improvements for low-performing countries in the regions. High performers within these clusters can provide valuable transition models for their peers, by bringing to bear successful policies and investment frameworks. Key examples are renewable energy and efficiency strategies in Tunisia for the Middle East, and the drive for improved energy access rates in South Africa among sub-Saharan African countries.
The following sections explore a number of individual regions in more detail, providing analysis on top performers within each region and drawing attention to the key challenges each region is experiencing.
|Central and Eastern Europe||Commonwealth of Independent States|
|Macedonia, FYR||0.45||87||Republic of Moldova||0.4||110|
|Bosnia and Herzegovina||0.42||104||Mongolia||0.37||117|
|Middle East and North Africa||Nordic Countries|
|Trinidad and Tobago||0.44||94||Turkey||0.57||47|
|Latin America and Caribbean||Sub-Saharan Africa|
|Costa Rica||0.67||9||South Africa||0.54||54|
|Trinidad and Tobago||0.44||94||Togo||0.37||119|
Two Simple Rules to Build a Global Energy Architecture for the 21st Century
José Manuel Entrecanales
Chairman and Chief Executive Officer,
José Manuel Entrecanales
Chairman and Chief Executive Officer,
Although the issues are well defined, formidable challenges remain. Even when the best minds are engaged in drafting clear roadmaps – for example, in the Forum’s New Energy Architecture: Enabling an Effective Transition – governments must still define priorities and juggle conflicting interests to ensure that their energy models achieve economic growth, environmental sustainability and energy security for all.
It is clear that there is no single solution to this equation. But it is equally obvious to me that renewable energy is a vital and indispensable part of the answer. I believe that renewables are uniquely positioned to respond to some of these new challenges. Here are a few reasons why.
The first and most widely known aspect of renewable energy is its infinite and non-GHG emitting nature. For this reason alone, we should increase the share of renewable and non-polluting energies in our energy mix.
Second, and no less important, as local and geographically well distributed sources of energy, renewables increase a country’s energy independence and security in two important ways. By replacing fossil fuel imports, renewables strengthen a country’s balance of payments. They also bring price stability to electricity markets by making power generation less dependent on the volatile prices of fossil fuels, over which importing countries have no control. I believe that energy security and price stability will become increasingly important considerations for policy-makers in a world still riven by geopolitical tensions over access to the finite reserves of fossil fuel resources.
Third, we know that renewables generate economic wealth and regional development. A European study by Ernst & Young showed that in countries with no fossil resources, investing in a wind farm had an impact on GDP 3.5 times greater than a similar investment in a combined cycle gas turbine plant, while the wind farm created 1.6 times more jobs in the EU27.
Furthermore, the development of renewables brings with it an opportunity to create a new industrial cluster defined by its high technological content, skilled jobs, significant export opportunities and a long and promising future.
In addition, renewables are economically efficient and are becoming increasingly competitive compared with traditional power sources. The cost of renewable energy has plummeted in recent years. Wind turbine prices, for example, have dropped 30% in the past four years and PV solar power has reduced its installation costs by 50% in the past five years. In many parts of the world, renewable energy is expected to compete head-to-head with fossil fuel-based energies. According to McKinsey (Global Solar Initiative), on-shore wind will become competitive with gas and coal in 2015. And this does not take into account negative externalities, which make renewables compare even more favourably to conventional sources.
Renewables are also the logical choice for fast-growing, energy-hungry economies because they are quick to assemble, highly predictable, easy to integrate and have no adverse impact on the environment. Furthermore, they are an efficient solution for countries whose priority is to extend energy access and security, and to increase their energy independence. This is because renewable energy power plants can be built in a short time and can become operational in less than two years. Compare this to an average of almost five years for the development of a conventional fossil fuel power plant.
Renewable energy plants have the added advantage of being scalable: they can be configured in different sizes without necessarily requiring a minimum size to make a project profitable. Given that 19% of the world’s population does not have access to electricity, wind and solar represent an important solution to this pressing need. This is particularly true for rural communities that are not connected to an electricity grid.
Finally, renewable energy plants are “reversible”. If, in a few decades, new, more efficient, more competitive or more manageable energy technologies were to be developed, removing renewable energy plants throughout the world, changing their location or even transforming them into alternative uses, is a perfectly possible scenario with little or no long-term negative consequences. Unfortunately, we cannot say the same about most other conventional energy sources and their associated generation technologies.
However, structural change in a country’s energy system is not easy to bring about. Energy policy requires long-term political commitment and also the strength to resist the enormous economic and social pressures of the entrenched interests of incumbents. The introduction of new technologies, such as renewables, has a disruptive effect on the energy industry status quo, where it is not unusual to find direct public intervention or integrated monopolies.
This is one reason why any society wanting to build its energy architecture for the 21st century needs to follow some very basic rules before starting on the road to a cleaner and more sustainable energy model.
The first rule is the simplest but also the most difficult to accomplish: the necessary changes to a country’s energy model must be a common goal that enjoys multiparty support and the approval of a majority of the population. It is also necessary to explain how the change will happen and be very transparent on the costs and benefits of the new policy.
The second rule is as challenging as the first one: governments must develop a long-term strategy accompanied by a clear set of policies and instruments. This policy has to be flexible enough to adapt to short-term economic changes (such as the current economic crisis) without sacrificing its long-term objectives.
There are, of course, many more rules and much more advice on how to proceed. Very recently, the IEA listed many of them in great detail in its report Tracking Clean Energy Progress 2013. All of them are logical and build on lessons learned from past errors. No doubt, we will avoid repeating many of them and this will clear the way for swifter and cheaper ways of adopting a cleaner energy system.
But all of these efforts will be in vain unless the two important rules that I have just mentioned are followed very strictly. It is to be expected that entrenched interests will do their utmost to maintain the status quo and prioritize short-term private gain over longer-term social and economic benefits.
That is why, as with the introduction of many other disruptive technologies, the key resides in winning political and social support for change.