New Energy Architecture

Momentous changes in the energy landscapes of the past, such as the rise of the steam engine in the 1800s and widespread electrification in the 1900s, have driven profound developments in the wider economy and helped to shape and develop modern societies. Today, we are again moving to a New Energy Architecture—one with lower and non-carbon fuels, increased electrification with greater interconnections and a leaner system—as we strive to do more with less.

Accenture and the World Economic Forum have released a new paper, New Energy Architecture: Enabling an Effective Transition, which explores the shift to this energy architecture and the trade-offs that policy makers and society will need to consider.

Download the full report [PDF, 2.98MB]

Download the executive summary [PDF, 2.14MB]

Read the Japanese Case Study [PDF, 1.76MB]

Read the India Case Study [PDF, 1.55MB]

Read Arthur Hanna’s Study Blog

This report notes that the shift to a new energy architecture to secure sustainable and affordable energy will entail trade-offs and difficult choices for policy makers and society. It also notes that the path countries take to transform their energy architecture will have some common features—lean, low-carbon and increasingly electrified systems—but will vary according to their stage of economic development and their resource endowment.

To help decision makers in planning and driving an effective transition and to assess their progress, Accenture and the World Economic Forum have developed an Energy Architecture Performance Index (EAPI). One hundred and twenty four countries were assessed across three dimensions: economic growth and development, environmental security and energy access and security, which revealed that much more needs to be done to accelerate the transition to meet future demands.

The assessment shows that while almost all of the countries have improved the efficiency of their energy sector, the share of non-carbon energy in the total primary energy supply is still less than 5 percent for 69 of them. A surprising number also continue to struggle to meet their citizens’ basic energy needs: in 31 countries, more than 50 percent of the population continues to use solid fuels for cooking purposes.

Three key groups of stakeholders have a role to play: government, industry and civil society. Based on the findings of our research, we believe that stakeholders should take the following steps to enable an effective transition and meet the New Energy Architecture challenge:

1. Understand the trade-offs being made in driving change, reducing the economic impacts of the write-down of legacy assets. This is particularly relevant for those with large legacy systems in place, as in the majority of OECD countries.

2. Consider boundary constraints, both internal and regional, when making decisions regarding New Energy Architecture.. The availability, or lack, of physical elements such as land and water to facilitate change, as well as the capacity of social elements to enact change, should shape decisions.

3. Benchmark progress, measuring performance over time to provide transparent insight into challenges as well as a solid basis from which to make policy and investment decisions, and prioritize opportunities for improvement.

4. Learn from archetypes, to better understand the varying costs and benefits of different transition strategies, and to learn from the successes and failures of those who face a similar set of challenges.

5. Create mutually supportive enabling environments, taking advantage of each of the four pillars and ensuring that there is no weak link in the chain.