Methodological Addendum

This section describes the methodology behind the Energy Architecture Performance Index (EAPI) 2014 (updated from the 2013 index). EAPI is a composite index that measures the performance of global energy systems across three areas: economic growth and development, environmental sustainability, and energy access and security. 

Methodology

The EAPI focuses on tracking specific and output-oriented indicators to measure the energy system performance of different countries. In order to score and rank the performance of countries’ energy architectures, 18 indicators are aggregated into three baskets related to the three imperatives of the energy triangle: economic growth and development; environmental sustainability; and energy access and security of supply. 

Ultimately, the EAPI is split into three subindices: 

1. Economic growth and development: measures the extent to which energy architecture supports, rather than detracts from, economic growth and development
2. Environmental sustainability: measures the extent to which energy architecture has been constructed to minimize the negative impact of external environmental factors
3. Energy access and security: measures the extent to which energy architecture is at risk of a security disruption, and whether adequate access to energy is provided to all parts of the population

The score attained on each subindex is averaged to generate an overall score.

How the EAPI Functions

An index is a statistical measure of the changes across a set of indicators reflective of an entity – in this case, energy systems. Indices reduce complexity by tracking specific indicators so that, ideally, a change in the index reflects a proportional change in the real world. In this context, the term “indicator” provides empirical evidence of whether a certain desired outcome has been achieved, and energy system decision-makers can use this evidence to assess progress towards their objectives. The distinction between “input” and “output” indicators is critical. Input indicators measure human or financial resources specifically deployed for a particular energy project or programme, whereas output indicators measure the quantity of energy-related goods or services produced and the efficiency of energy production.

Reality and the statistics that represent it cannot be assumed to converge in perfect harmony, and the statistical results of the analysis need to be set in context for understanding the real-world situation. Furthermore, as an initial effort, the set of indicators measured by the EAPI are by no means definitive. Some data, either originally intended for inclusion or not available in suitable quality or coverage, had to be excluded, and certain assumptions had to be made as to how indicators should be measured to reflect a high or low score within the EAPI. 

To ensure the index produces policy-relevant insights and rankings, any targets used are derived from accepted policy documentation or expert judgements.

EAPI 2014 Indicators: Selection Criteria, Methodology Updates to 2013 and Profiles

Specific feedback and recommendations from the Expert Panel concerning data sourcing and the data selection criteria were very helpful. Where possible, the intent was to select indicators against the following criteria:

• Use of only output data – measuring either output-oriented observational data (with a specific, definable relationship to the subindex in question) or a best available proxy, rather than estimate
• Reliability – utilizing reliable source data from renowned institutions
• Reuse of data – sourcing data from the same suppliers on an annual basis, thus facilitating updates of the data
• Quality – selecting data that represent the best measure available, given constraints (all potential data sets were reviewed by the Expert Panel for quality and verifiability, and those data sets not meeting basic quality standards were discarded)
• Completeness – using data of adequate global and historical coverage; data has been consistently treated and checked for periodicity to ensure the EAPI’s future sustainability

When an indicator was missing data for a particular year, the latest available data point was used to avoid extrapolation. 

2013-2014 Methodology Review

Following the launch of the EAPI 2013, a review process was activated on how to further improve the index methodology and identify new, pertinent data sets. Interviews with members of the Expert Panel and other relevant stakeholders highlighted the following areas:

• Adjustment to the indicator for monitoring CO₂ emissions: In the first edition of the EAPI, the CO₂ emissions indicator used total CO₂ emissions from electricity and heat production to derive a per-capita measure. Using a per-capita denominator for emissions, however, could distort a country’s emissions data by basing it on population size. The new indicator for CO₂ emissions calculates a score based on the total CO₂ emissions from electricity generated per kWh produced. This alternative indicator is reflective of a country’s power-generation mix and contribution to GHG emissions, and supports the debate on the climatic implications of a transition to cleaner and more efficient power-generation sources.
• Inclusion of a new indicator monitoring methane emissions: According to the IEA analysis Redrawing the Energy-Climate Map, energy was responsible for 3.1 gigatons (Gt) of carbon-dioxide-equivalent methane emissions, making it the second-largest contributing sector. Energy-sector methane emissions are primarily due to inefficiencies in the upstream practices of flaring and venting. Industry regulation and policies to lower methane emissions could significantly contribute to reaching the climate goal of limiting global temperature increase to 2°C through 2020.
• Inclusion of a new indicator to monitor diversity in trade counterparts: A country’s energy security can be defined by its supply of natural resources. However, some importing countries have been able to establish themselves to some degree within the global or regional energy trade market, affecting the security of their energy supply. Their security may be comparatively at risk depending on the number of trade partners they rely on and how their energy demands are spread among the partners. Using the Herfindahl index methodology, the model assigns a score based on the number of trade partners of each importing country, and the spread of import quantities across these partners.

No changes were made to the overall aggregation methodology for the index.

Indicator Profiles

Table 11 provides details for each of the selected indicators; the weight attributed to an indicator within its basket (or subindex); what it measures; and the energy system objective it contributes to, either positively or negatively.

Table 11: Indicator Profiles

Weighting: Approach and Rationale

Within the aggregate score, each of the three baskets receives equal priority and weighting. Fundamentally, the World Economic Forum believes that the imperatives of the energy triangle are of mutual importance and interlinked. To bring greater balance to the energy triangle and enable an effective transition to a new energy architecture, it is important that policy-makers look to the long term, providing a more stable policy environment based on an in-depth understanding of the trade-offs they make. Where possible, decision-makers should aim to take action resulting in positive net benefits for all three of the energy triangle’s imperatives.

With a few exceptions in all three baskets, each indicator is equally weighted within them. Indicators that correlate closely, do not apply to certain countries or run orthogonally to each other, are diluted to prevent double-counting of scores.

Economic growth and development: The super gasoline and diesel indicators combine to form a mini-index within the economic growth and development basket; this mini-index is allocated equal weighting with the other indicators. Within the same basket, the indicators for fuel imports and exports as a share of GDP are combined to form a mini-index, which is also allocated equal weighting with the other indicators.  

Environmental sustainability: The nitrous-oxide emissions and methane emissions indicators are combined to form a mini-index within the environmental sustainability basket; this mini-index is allocated equal weighting with the other indicators.  

Energy security and access: The score for the energy imports indicator (for countries that are net importers) is combined with the score for the diversification of import counterparts indicator to form a mini-index, which is allocated equal weighting with the other indicators.

Indicator Metadata

Table 13 provides the metadata for each of the selected indicators, including: the title; the rationale for each indicator’s inclusion in the EAPI; the year for which the latest data is available; the source of the data; the time series it covers; any technical notes related to the construction of the indicator including nominators, denominators and unit; and the URL for the source data (if available).