Overview
The Energy Transition Index reads the pace at which the energy stack is shifting under the economy. The composition is contrarian: rising hydrocarbon prices indicate scarcity, which slows transition; rising industrial-metals prices indicate electrification capex, which accelerates it. The reading rises when the transition is accelerating.
Why these components
WTI, Brent, and natural gas enter with negative direction — when hydrocarbons get expensive, the transition gets harder, not easier. Copper and silver enter positive — both are physical inputs to the electrification stack. Industrial production is a small positive component because manufacturing buildout signals capex deployment. GitHub trending is included as a small AI-velocity component, because AI is now a meaningful electricity-demand driver.
Methodology
Hydrocarbons measured as 12-month percentage change to capture price regime. Industrial metals measured as percentage change for the same reason. Industrial production as percentage change. GitHub trending as a z-score. Weighted sum, logistic scaling.
Interpretation
Readings above 65 indicate the transition is moving faster than the 24-month baseline. Readings below 35 indicate the transition has stalled — typically because hydrocarbons are cheap, removing the economic pressure to shift. The most informative regime is divergence: hydrocarbons cheap, industrial metals also cheap, transition stalling for fundamental rather than political reasons.
Caveats
The index does not separate political/regulatory drivers from market drivers. A policy shift (e.g., IRA repeal, EU green deal change) would not register directly. A future version may add policy-event signals; the current version reads market behavior only.