How far advanced is the energy transition?

April 2025 was the second-warmest April recorded, globally, following a year when temperatures were consistently at 1.58C above pre-industrial levels – well above the 1.5C target set by the Paris Agreement for 2050.

One of the key factors in reducing climate change remains a successful transition from fossil fuels to sustainable, renewable energy. According to the World Economic Forum’s latest Energy Transition Index (ETI 2025) report, momentum for the energy transition has rebounded by 1.1% – over twice the average pace of the past three years.

Nearly two-thirds of countries surveyed improved their scores. However, clean energy still only has a share of 14.8% – a long way from what’s needed to achieve net-zero emissions by 2050.

The energy transition has been hobbled by a backdrop of geopolitical tensions, supply chain disruption, economic volatility and rising costs. These factors have meant that the goal of energy sustainability no longer stands alone but has to be kept in balance with the need for energy security and equitable, affordable access.

However, progress across all three dimensions tracked by the report – sustainability, equity and security – varied widely, creating multi-speed, multidimensional progress across the world.

Overcoming many years of stagnation, this year’s uptick was enabled by significant gains in energy equity (2.2%), with dropping energy prices making for more affordable access. In this category, Romania (19.2%) was the fastest mover across the 118 countries surveyed, driven by continued rural electrification, grid updates and consumer price caps.

Sustainability also advanced (1.2%) thanks to increasing adoption of green energy and a focus on driving energy efficiency and lowering emissions, following a steady 10-year trend after a dip in 2022-2023. Albania led in this category, with nearly all of its energy generated from hydropower and efforts to diversify into wind and solar energy. Bulgaria came out as the most improved, with rapid growth in renewables and decommissioning of coal assets, supported by EU transition funds and a national strategy of decarbonization.

However, only 28% of the countries surveyed advanced along all three dimensions, with energy security particularly lagging (0.4%). Providing a stable, affordable energy supply remains an uphill battle across the board.

The recent large-scale power outage in Spain and Portugal – both countries ranking in the top 20 of the ETI 2025 – has underscored how challenging this fundamental transformation of power generation can be, even in some of the leading geographies.

While 76 out of 118 countries improved their scores, the Advanced Economies continue to lead the global energy transition, with 16 among the top 20 performers. As in past reports, the Nordic countries – Sweden, Finland, Denmark and Norway – top the charts, but momentum is also building elsewhere. China and the US both improved their scores, with substantial regulatory support, including China’s first-ever national energy law, which came into force in January 2025. Yet, for the US, the question is how much of the momentum can be maintained given the government’s cutbacks on policy support for clean energy.

That said, it was Latvia and the United Arab Emirates (UAE) who notched up the biggest increases overall, at 7.9% each. Latvia’s performance was buoyed by a nearly 60% drop in electricity prices and a growing share of renewables, adding to its large hydroelectric base. Though oil and gas remain its mainstays, the UAE has been growing the share of renewables in its energy mix steadily. The report attributes both countries’ rapid progress to targeted reforms and focused policies.

While investments surpassed $2 trillion in 2024 – more than doubling since 2020 – investments have slowed. Financial investment growth was only 0.2%.

While short-term rates eased, high inflation and unprecedented sovereign debt levels continue to make long-term capital expensive. This is especially true in emerging markets, where the energy transition has progressed the least.

Investor confidence is further strained by growing trade and geopolitical tensions, mounting tariffs and renewed economic nationalism, along with fragmented supply chains, especially for critical minerals and clean tech equipment.

Stagnating investments are one of the factors, in the slowing transition readiness, a dimension which also measures progress in regulation, infrastructure, innovation and education. It rose by just 0.8% in 2025, compared to a 10-year average of 1.2%.

While global alignment has long driven the energy transition in strategic terms, the latest ETI report suggests that execution will need to be local. Rather than following a uniform path, energy transition strategies must be tailored to the context, strengths and weaknesses of each country.

This is especially true seeing that the economic and geopolitical challenges of recent years are affecting progress and may continue to do so into the future. Its suggested blueprint includes:

Ensuring that all regions can advance toward more sustainable, equitable and secure energy systems at their own pace will be vital for accelerating rather than stifling the process of the energy transition.