Fostering Effective Energy Transition 2025

The 2025 Energy Transition Index (ETI) shows a modest global recovery with a 1.1% increase in scores, though progress remains uneven. While system performance improved by 1.2%—driven largely by equity gains from easing energy prices—transition readiness slowed to 0.8%, falling below its 10-year average. Advanced economies, particularly the Nordics, continue to lead, while China has reached an all-time high rank of 12th. The report highlights a significant capital misalignment: over 80% of energy demand growth occurs in emerging economies, yet more than 90% of clean energy investment since 2021 has been concentrated in advanced economies and China. The document argues for a shift from 'one-size-fits-all' global policies to context-aware, multi-speed strategies that prioritize grid modernization, skilled talent, and enhanced capital investment in developing nations to bridge a $2.2 trillion annual investment gap.

• Global energy transition momentum showed a modest recovery in 2025, with overall ETI scores increasing by 1.1% year-on-year, more than double the average rate of the previous three years.
• Energy system performance improved by 1.2% year-on-year, primarily due to a 2.2% rebound in equity scores resulting from moderating energy prices and structural subsidy reforms.
• Transition readiness growth slowed to 0.8% year-on-year, marking the first time since 2017 that system performance outpaced the growth of enabling factors.
• There is a severe misalignment between energy demand and clean energy investment; while over 80% of demand growth is in emerging and developing economies, more than 90% of investment since 2021 has gone to advanced economies and China.
• Clean energy investment reached over $2 trillion in 2024, but this is significantly below the $5.6 trillion required annually through 2030 to meet net-zero goals.
• Artificial Intelligence (AI) is creating new pressures on energy systems, with data centres projected to account for 10% of global power demand growth by 2030.
• The top three ETI ranks are held by Sweden, Finland, and Denmark, while China reached its highest rank ever at 12th place.
• Global energy-related CO2 emissions reached a record high of 37.8 billion tonnes in 2024, despite the expansion of renewables.
• Developing economies face a $2.2 trillion annual investment gap for clean energy, exacerbated by financing costs that are up to seven times higher than in advanced markets.

APA

World Economic Forum (2025). Fostering Effective Energy Transition 2025. https://reports.weforum.org/docs/WEF_Fostering_Effective_Energy_Transition_2025.pdf

Chicago

World Economic Forum. Fostering Effective Energy Transition 2025. 2025. https://reports.weforum.org/docs/WEF_Fostering_Effective_Energy_Transition_2025.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Fostering Effective Energy Transition 2025 |date=June 2025 |url=https://reports.weforum.org/docs/WEF_Fostering_Effective_Energy_Transition_2025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2025fostering, author = {{World Economic Forum}}, title = {{Fostering Effective Energy Transition 2025}}, institution = {World Economic Forum}, year = {2025}, month = jun, url = {https://reports.weforum.org/docs/WEF_Fostering_Effective_Energy_Transition_2025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }