The coronavirus pandemic risks derailing progress in clean energy growth as countries pause economic expansion, to focus on immediate health risks to populations.
Around 75 per cent of countries have improved their environmental sustainability quotient, even as the global average for energy transition remains poor, the World Economic Forum said in a new report.
The UAE, Opec's third-largest oil producer with an ambitious energy transition policy ranks third in the Middle East and North Africa region and 63 globally. The country's rank for transition readiness is 45, while it ranked 75 for system performance, which assesses economic growth and development, energy access, and security as well as environmental sustainability.
The UAE accounts for 4 per cent of global crude output, much of it from oilfields in Abu Dhabi. The country is diversifying its energy mix, adding solar and nuclear sources to its grid, as it looks to free up its hydrocarbons for export markets.
The UAE has ramped up efforts to increase its renewable energy capacity at a time of record low oil prices. A planned 2GW solar scheme in Abu Dhabi - the oil hub for the UAE - received the world's lowest tariff on the basis of levellised costs of electricity last month.
Globally, countries around the world are prioritising stimulus packages to revive sectors of the economy that often exclude clean energy. The most notable example was that of the record $2 trillion (Dh7.34tn) US stimulus package passed in March that did not extend tax credits or make provisions for the wind and solar industries.
“The coronavirus pandemic offers an opportunity to consider unorthodox intervention in the energy markets and global collaboration to support a recovery that accelerates the energy transition once the acute crisis subsides,” said Roberto Bocca, head of energy and materials at the World Economic Forum.
“This giant reset grants us the option to launch aggressive, forward-thinking, and long-term strategies leading to a diversified, secure and reliable energy system that will ultimately support the future growth of the world economy in a sustainable and equitable way.”
Sweden tops the rankings for energy transition for the third consecutive year in 2020, according to the WEF report.
Switzerland is ranked second, followed by Finland. France, which is ranked eighth and the UK in the seventh position are the only G20 countries in the top ten rankings, according to WEF.
The report noted that emerging centres of demand such as India, ranked 74, and China, ranked 78, have "made consistent efforts to improve the enabling environment, which refers to political commitments, consumer engagement and investment, innovation and infrastructure, among others."
Both countries, which have enforced strict lockdown measures to contain the virus outbreak have also been transitioning away from using coal-fired power generation to cleaner gas or renewables. The Indian government has mandated a renewable energy expansion programme that looks to deploy up to 275GW by 2027.
A deep overhaul of fossil fuel-wired economies to function on cleaner energy sources could require as much as $130tn in spending, Abu Dhabi-headquartered Irena said in its first global renewables outlook last month.