The global push towards cleaner energy is entering a more complex and uncertain phase, with geopolitical tensions, supply chain disruptions and energy security concerns reshaping the trajectory of the transition. A new report by the World Economic Forum (WEF) warns that while investments in clean energy have reached record levels, progress towards building sustainable, affordable and resilient energy systems is slowing as nations increasingly prioritise energy security amid a volatile global landscape. 

According to the Energy Transition Index (ETI) 2026, developed by the WEF in collaboration with Accenture, the global energy transition has effectively stalled despite total energy investments touching $3.3 trillion in 2025, including $2.3 trillion directed towards clean energy projects.

The report highlights a growing disconnect between investment volumes and actual transition readiness, which declined for the first time in more than a decade. 

Geopolitical risks reshape energy priorities 

The findings come against the backdrop of escalating geopolitical risks, including recent disruptions in the Strait of Hormuz, one of the world's most critical energy chokepoints. The report argues that such events have exposed vulnerabilities in energy systems already under pressure from rising electricity demand, infrastructure bottlenecks and uneven access to capital. Import-dependent emerging economies have been particularly affected by these disruptions. 

"The energy transition is not reversing, but it is fracturing," said Roberto Bocca, Head of the Centre for Energy and Materials at the World Economic Forum. The report notes that countries are increasingly attempting to balance three competing objectives — energy security, sustainability and affordability — at a time when global uncertainty is intensifying. 

India & China continue to advance 

Despite the overall slowdown, some regions continue to make significant progress. Nordic countries retained their leadership in the rankings, while Singapore emerged as one of the fastest-rising performers due to stronger policy support and regulatory reforms. 

Among major economies, China maintained record levels of clean-energy deployment, while India registered one of the strongest improvements in transition readiness, reflecting advances in policy frameworks, infrastructure and investment conditions. 

Emerging economies face investment gap 

The report points to a widening imbalance in global energy investment. Around 75% of clean-energy capital is concentrated in a relatively small number of countries, even as emerging economies account for nearly 80% of projected growth in electricity demand. 

This mismatch risks slowing the pace of global decarbonisation and could deepen energy inequalities between developed and developing nations, making access to affordable financing a key challenge for the energy transition. 

Rising power demand adds pressure 

Another growing challenge is surging electricity demand driven by electrification, artificial intelligence, data centres and cooling requirements. Global electricity demand rose by 3% in the past year, making grid expansion and energy infrastructure development critical to maintaining momentum in the transition. 

As countries adopt more digital technologies and electrify industries and transportation systems, the need for reliable power infrastructure is expected to increase significantly. 

To address these challenges, the WEF identifies three priorities: embedding resilience and security into energy system design, accelerating grid and infrastructure development, and creating stable policy environments that attract long-term investment, particularly in emerging markets. 

The report concludes that countries capable of aligning energy security with sustainability goals will be best positioned to gain a competitive advantage in the evolving global energy landscape, where resilience may become as important as decarbonisation itself.

Published on: Jun 18, 2026 7:59 PM IST