The System Value Framework for the clean energy transition
  • Emerging research shows the need to collectively move from clean energy ambitions to actions as rapidly as possible.
  • Working at a local level is key, but communities often lack the data, analysis, capacity and resources to take action.
  • We can make global progress by supporting local communities with holistic energy solutions and detailed analytics that can provide investment-ready opportunities.

The challenge is clear. In recent years, scientists have underscored the need to limit planetary warming to 1.5ºC to stave off the worst impacts of climate change. Companies are stepping up by setting ambitious clean energy goals and aligning strategies and investments to back them up.

But while the news is dominated by national policy discussions, nationally determined contributions (NDCs) and the portfolio of top-down initiatives, we must remember that the rubber meets the road at the local level – in every corner of the globe. However, communities often lack the data and analysis, as well as the capacity and resources, to take action. This is an opportunity to make a collective global impact: by supporting communities with holistic energy solutions that can move their clean energy ambitions to actions.

How to make progress

Energy solutions should be holistic in two ways:

1. By aiming to address multiple factors in a community including climate, health, and the economy, and

2. Engaging broadly across different sectors of the energy industry and engaging a diverse set of stakeholders.
Holistic approaches recognize the interconnected issues that are critical to communities and which address the trade-offs around how making a change in one area could affect other areas. For example, if more residents adopt energy technologies like electric vehicles and air conditioning, how could that change the total demand for electricity throughout a community? By taking a holistic approach, community decision-makers can determine a strategy that considers their communities’ unique needs and goals.

Holistic approaches like WEF’s Net Zero Carbon Cities’ systemic efficiency aim to enable a decarbonized, highly electrified and resilient city ecosystem though ultra-efficient buildings and smart energy infrastructure. With this framework, cities have an opportunity to boost their resilience to a range of future climate and health-related crises, as well as create jobs and other economic and health benefits. This approach also engages diverse stakeholders such as policy-makers, businesses, infrastructure and real estate developers, city administrators, civil society and the financial sector.

Helping communities move from clean energy aims to actions

Achieving clean energy goals equitably and economically is possible at every scale, from small communities to sprawling cities. The key to translating ambitions into actions is detailed analytics, which can provide data-driven, customized options for deployment and demonstrate ready-to-implement funding investments and business opportunities.

City of Los Angeles

To combat climate change while capturing health and economic benefits, the City of Los Angeles set ambitious goals to transform its electricity supply. Results from the Los Angeles 100% Renewable Energy Study (LA100) show meeting LA’s goal of reliable, 100% renewable electricity by 2045 – or even 2035 – is achievable and will entail rapid deployment of wind, solar, and storage technologies this decade. This objective, highly detailed, rigorous and science-based study paves the way for other jurisdictions to reach their own clean energy goals, both equitably and economically.

Kingston, New York

Kingston, New York committed to achieving 100% clean energy by 2050 with a focus on equity and energy efficiency. City officials outlined three priorities:

1. Increasing energy efficiency and renewable energy while decreasing energy bills for low-income residents.

2. Increasing practical local investment.

3. Increasing community jobs.

The System Value Framework for the clean energy transition

The System Value Framework for the clean energy transition

Image: World Economic Forum

Detailed analysis revealed how decision makers could implement energy-efficiency measures to meet the city’s clean energy and equity goals – by identifying a higher energy burden among low-income households, high energy and cost savings potential in the city’s mostly older building stock, and opportunities for job creation in building efficiency and rooftop solar projects.

Energy transitions can also boost energy equity

Historically, power system planning has optimized costs and efficiency over the experiences of vulnerable or marginalized communities. Today, an important aspect of creating clean energy transitions is energy equity – focusing on remediating the social, economic and health burdens on those historically harmed by the energy system.

The Navajo Generating Station (NGS), once the largest coal-fired power plant in the western United States, transitioned to a renewable energy future after a federal working group committed to “producing clean, affordable, and reliable power, affordable and sustainable water supplies, and sustainable economic development, while minimizing negative impacts on those who currently obtain significant benefits from NGS, including tribal nations”. A co-developed solution and analytic consideration of multiple stakeholder priorities gave decision makers scientifically sound options for implementing potential changes. The Navajo Nation was able to develop a plan that prioritized their needs for agricultural water production and storage using wind and solar power, as well as a focus on coal transition employment opportunities.

Colombia

As a result of changing economic, political, technological and environmental conditions, Colombia is undergoing rapid transformation in its electricity sector, focusing on diversifying its energy mix to include more solar and wind renewable energy. Through a public-private partnership, detailed analysis uncovered that the workforce was not ready for the energy transition. This led to a multimillion-dollar training programme for energy system stakeholders, including a focus on women, and a workforce training programme for marginalized groups – primarily indigenous Wayuu people – to better prepare for the energy transition.

These communities represent just a few examples of local energy goals that are moving forward quickly and confidently with the support of holistic energy solutions supported by detailed analysis.

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.

Is your organisation interested in working with the World Economic Forum? Find out more here.

Working locally to create a global impact

Urban environments and cities consume more than two-thirds of the world’s energy and account for more than 70% of global CO2 emissions. The UN estimates that two-thirds of the global population will live in cities by 2050 – up from 55% today – with the world adding 2.5 billion people to our cities by mid-century. This will lead to unprecedented demands on global food, water and energy resources, and lead to significant increases in greenhouse gas emissions.

While these figures indicate the alarming size and scale of the challenge, they also highlight an enormous opportunity to curtail global greenhouse gas emissions through the rapid decarbonization of cities and urban environments across the globe. Each local clean energy transition builds momentum toward creating a global impact on the achievement of a clean and resilient energy economy.

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