The global push towards clean energy has entered a more complex and uncertain phase, with a new report from the World Economic Forum (WEF) indicating a significant slowdown in the transition. Despite unprecedented investments in clean energy, progress towards building sustainable, affordable, and resilient energy systems has effectively stalled.
Transition Readiness Declines Amid Geopolitical Shifts
According to the Energy Transition Index (ETI) 2026, developed by the WEF in collaboration with Accenture, global energy transition readiness declined for the first time in over a decade. This deceleration occurs even as total energy investments reached $3.3 trillion in 2025, with $2.3 trillion specifically directed towards clean energy projects.
The report highlights a growing disconnect between the volume of investment and actual readiness for the transition. Geopolitical risks, such as recent disruptions in critical energy chokepoints like the Strait of Hormuz, are exposing vulnerabilities in energy systems. These events compel nations to increasingly prioritize energy security, often at the expense of accelerated decarbonization efforts.
"The energy transition is not reversing, but it is fracturing," stated Roberto Bocca, Head of the Centre for Energy and Materials at the World Economic Forum. He noted that countries are grappling with balancing three competing objectives: energy security, sustainability, and affordability, amidst intensifying global uncertainty.
India and China Lead Regional Progress
Despite the overall global slowdown, several regions continue to make notable advancements. Nordic countries maintain their leadership in the ETI rankings, while Singapore has emerged as one of the fastest-rising performers, driven by robust policy support and regulatory reforms.
Among major economies, China has sustained record levels of clean-energy deployment. India has also registered one of the strongest improvements in transition readiness, reflecting significant strides in policy frameworks, infrastructure development, and investment conditions within the country.
Investment Gaps and Rising Demand Pose Challenges
The WEF report also points to a widening imbalance in global clean energy investment. Approximately 75% of clean-energy capital is concentrated in a relatively small number of developed nations. This is a critical issue, as emerging economies are projected to account for nearly 80% of the anticipated growth in global electricity demand.
This mismatch risks slowing the overall pace of global decarbonization and could exacerbate energy inequalities between developed and developing nations. Access to affordable financing remains a key challenge for these emerging markets.
Adding further pressure is the surging global electricity demand, which rose by 3% in the past year. This increase is driven by widespread electrification, the proliferation of artificial intelligence, expansion of data centers, and growing cooling requirements. Consequently, accelerating grid expansion and energy infrastructure development are now deemed critical to sustaining momentum in the transition.
Priorities for a Resilient Energy Future
To navigate these complex challenges, the World Economic Forum identifies three key priorities:
- Embedding Resilience and Security: Integrating these principles into the fundamental design of energy systems.
- Accelerating Infrastructure Development: Rapidly expanding and modernizing energy grids and related infrastructure.
- Creating Stable Policy Environments: Establishing consistent and predictable policy frameworks that attract long-term investment, particularly in emerging markets.
The report concludes that nations capable of effectively aligning energy security with sustainability goals will be best positioned to gain a competitive advantage in the evolving global energy landscape, where resilience is becoming as crucial as decarbonization itself.