Global Energy Transition Index 2025

Global Energy Transition Index 2025

Why in News? 

Recently, the World Economic Forum released the Global Energy Transition Index 2025. It showed steady progress in clean energy efforts worldwide. Countries like India and China improved their performance.

Key Highlights of the Global Energy Transition Index 2025

• Overall Improvement:

• • • The Global Energy Transition Index reviews energy systems in 118 nations, focusing on security, sustainability, and fairness.
    • In 2025, the global energy transition score improved by 1.1%, the sharpest rise seen since the COVID-19 outbreak.
    • In this report 65% of countries improved their ETI ratings.
    • Only 28% of countries showed positive movement across energy reliability, environmental goals, and accessibility together.

• Performance Leaders:

• • • Nordic nations continue to top the rankings.
    • Sweden, Finland, Denmark, Norway, and Switzerland occupy the top five ETI spots.

• Regional Progress:

• • • Emerging Europe posted the most significant ETI gains.
    • Nations in Emerging Asia performed better than the worldwide average in pushing energy system improvements.
    • India and China have improved how efficiently they use energy and how ready they are to adopt cleaner sources.
      • The country now ranks 71st, a slight drop from 63rd in 2024.
      • China achieved a record 12th place. It benefits from large-scale investment in clean energy and rapid innovation
    • The United States ranks 17th overall. The country leads in energy security due to its diversified energy mix.
    • The Democratic Republic of Congo ranks at the bottom, 118th, with poor performance and weak readiness for energy change.

• Investment Trends:

• • • Global investment in clean energy reached US $2 trillion in 2024. Global spending on clean energy reached its highest level in a single year.

• Sector Strengths:

• • The most visible gains were in making energy more affordable and accessible, supported by pricing stability and subsidy reforms.
  • Sustainability improved through rising renewables and better efficiency. Energy security lagged.

What is the Global Energy Transition Index?

• Introduction:

• • • The Global Energy Transition Index (ETI) measures how countries shift from fossil fuels to cleaner energy sources. It tracks progress on energy security, sustainability, and equity. 
    • The ETI features data from 118 nations.

• Publication:

• • • The ETI is compiled by the World Economic Forum, in partnership with Accenture, through their Fostering Effective Energy Transition report. 
    • It was first released in 2018 and is now updated annually.

• Purpose:

• • • This index offers policymakers insights to build stronger and cleaner energy systems across diverse regions. 
    • The index highlights where countries excel or fall behind.
    • It identifies gaps in readiness and system performance.
    • It helps align global targets like the Paris Agreement and UN Sustainable Development Goals.

• Parameters: The ETI evaluates countries based on two main dimensions:

• System Performance

• • • • Energy security refers to having reliable supplies, varied fuel options, and prices that people can afford.
      • Environmental sustainability covers emissions and pollution levels.
      • Energy equity ensures everyone has fair access to electricity and pays reasonable costs.

• Transition Readiness

• • • • Policy environment and regulatory support for renewables.
      • Financial investment in clean energy technologies.
      • Innovation ecosystems and workforce skills.
      • Infrastructure and grid resilience.
      • Education systems and public awareness

• Scoring:

• • The ETI uses 39–40 variables to quantify each country’s performance .
  • These variables include emissions per capita, access to electricity, and energy intensity.
  • The score ranges from 0 to 100, where a higher number reflects better transition progress.

Global Energy Transition Index Report 2025: Challenges 

• Energy Security Lags: The report notes that energy security shows minimal improvement. Aging power grids struggle to accommodate renewable sources. Countries remain dependent on single fuel types. Geopolitical tensions also threaten stable supply chains.

• Uneven Investment Distribution: In 2024, investment in clean energy reached US $2 trillion. However, most funding goes to advanced economies and China. Emerging markets receive far less, even though they have large energy growth.

• Infrastructure and Grid Bottlenecks: The index finds that many nations lack modern grid infrastructure. Such grids cannot handle intermittent renewables like solar and wind.

• Rising Energy Demand: In 2024, the world’s total energy demand increased by 2.2%, driven by growing needs in multiple sectors. Emissions reached a record 37.8 billion tonnes of CO₂. These trends show that renewables cannot yet offset fossil fuel use.

• • Resource Constraints: Renewables require critical materials like lithium, copper, and rare earths. Mining these minerals strains ecosystems and local communities. This resource demand may slow clean energy rollouts.

• Geopolitical and Climate Disruptions: Energy systems face risks from climate shocks and global conflict. Resilience planning remains weak in many regions. Climate disasters such as floods and fires have broken energy supply routes and damaged power infrastructure.

Energy Transition in India

• Clean‑Energy: 

• India added 30 GW of clean energy in FY 2024–25. 

• • • The country installed 24.5 GW of solar and 3.4 GW of wind capacity in 2024.
    • India aims for 500 GW of non‑fossil fuel capacity by 2030.

• Renewable Capacity:

• • • Installed capacity rose from 305 GW in 2015 to 476 GW by June 2025.
    • By March 2025, renewables formed 46.3% of total capacity.
    • 110.8 GW of solar capacity was operational as of May 2025.

• Renewable Projects:

• • • The Bhadla Solar Park (2,245 MW) leads as India’s largest solar facility.
    • Gujarat’s Hybrid Renewable Park plans 30 GW solar and wind capacity.
    • Gujarat overtook Rajasthan as the top RE state by capacity in April 2025

• Coal and Clean Energy:

• • • Coal output crossed 1 billion tonnes in FY 2024–25.
    • Coal still generates around 70% of electricity.
    • The country commission nearly 30 GW coal and 56 GW clean energy under development.

• Investment:

• • • India attracted US $2.4 billion in 2024 via development finance for clean energy.
    • India is the world’s top DFI destination for renewable projects in 2024.

• Energy Efficiency:

• • • India targets 5 Mt green hydrogen annually by 2030.
    • India plans to reach 100 GW nuclear capacity by 2047. It has allocated US $2 billion for nuclear research.
    • India’s electricity demand is projected to triple by 2050, driven by EVs and cooling needs.

• Policy:

• • India’s 2025 Union Budget prioritizes boosting domestic production and strengthening the country’s energy reliability.
  • The Panchamrit targets, announced at COP26 in 2021, aim to reduce carbon intensity by 45% by 2030 and reach net zero by 2070.

Global Energy Transition Index Report 2025: Solutions

• Establishing Resilient Policy Frameworks: The WEF urges countries to set stable long-term policies that attract clean-energy investment. Governments must tailor frameworks to local needs and build regional cooperation on energy grids and supply chains.

• Upgrading Power Infrastructure: The report calls for modern grid systems that can support solar, wind, storage, and distributed energy. Tools like smart meters can help.
  • Example: Saudi Electricity Company installed 11 million smart meters by 2025.
• Building a Skilled Workforce: Countries should match training programs to job market needs. Australia’s Clean Energy Training Hubs train technicians in solar, wind, and batteries. This ensures enough skilled labour for clean-tech deployment.
• Accelerating Clean Technology: The WEF promotes faster development and scale-up of advanced technologies. Countries should foster R&D partnerships and early market adoption.
  • For example, the U.S. invested $7 billion in hydrogen hubs to support industrial decarbonisation. 

Mobilizing Capital for Emerging Economies: Investors need risk-sharing tools and sovereign-backed funds. India’s NIIF co-finances clean energy with global partners by using public credit enhancements. This attracts investment into underfunded regions.