WEF Energy Transition Index accelerates – but UK ranks 16th

The World Economic Forum’s (WEF) 2025 Energy Transition Index (ETI) shows an annual improvement by 65% of the countries ranked, with 28% advancing across all the three core dimensions: security, sustainability and equity. (The ‘equity’ dimension of the ETI is a measure of how well a country’s energy system performs in terms of providing access to affordable, reliable and sustainable energy for all.)

Although global progress towards secure, sustainable and equitable energy is accelerating, the WEF Fostering Effective Energy Transition 2025 report notes that ‘rising geopolitical tensions, investment gaps and a growing disconnect between clean energy innovation and deployment where needed threaten to undermine momentum’.

Developed in collaboration with Accenture, the report benchmarks the performance of the energy systems of 118 countries across the three performance dimensions, and five ‘readiness factors’: political commitment, finance and investment, innovation, infrastructure, education and human capital.

According to the WEF, while advanced economies grapple with grid congestion, high prices and delivery bottlenecks, ‘emerging regions’ in Europe and Asia are also making gains, driven by targeted reforms, improved infrastructure and growing clean energy investment.

‘We are seeing more holistic approaches and visible progress [in the energy transition],’ said Roberto Bocca, Head of the Centre for Energy and Materials at the WEF. ‘It is encouraging that 28% of the countries, including major energy producers like Brazil, China, the US and Nigeria, have advanced across multiple dimensions. However, staying on track demands urgent investment in fast-growing economies.’

The 2025 ETI showed 1.1% year-on-year growth – the fastest since pre-COVID levels. Equity exhibited the strongest gains, aided by stable energy prices and subsidy cuts, while ‘sustainability’ improved thanks to increased renewable energy adoption and improvements in energy efficiency. But ‘energy security’ stagnated due to inflexible power systems, continued import reliance and limited diversification.  

Sweden, Finland and Denmark topped the ETI, reflecting long-standing policy commitment to the energy transition, robust infrastructure and diversified low-carbon energy systems, said the WEF. They were followed by Norway, Switzerland, Austria, Latvia, the Netherlands, Germany and Portugal in the top 10. China came 12th, fuelled by its scale and leadership in innovation and clean energy investment. Brazil ranked 15th and the UK 16th, followed by the US in 17th place – although it ranked first in energy security, supported by a diversified energy system and strong innovation. Nigeria made notable progress, rising from 109th place in 2016 to 61st in 2025, underscoring the growing impact of targeted reforms and localised transition strategies.

India advanced in terms of energy efficiency and investment capacity, while the United Arab Emirates recorded the strongest year-on-year gain in a decade, driven by rapid infrastructure upgrades, targeted subsidy reforms and rising clean energy use.

According to the report, since 2021, over 80% of energy demand growth has come from emerging and developing economies. Nevertheless, more than 90% of clean energy investment has been seen in advanced economies and China, ‘revealing a misalignment between capital flows and demand’.

REN21 report notes ‘pivotal year’ for renewables

The latest crowd-funded REN21 Global Status Report claims that ‘2024 marked a pivotal moment for renewable energy’, with the world adding 741 GW (representing an 18% rise year-on-year) of renewable energy capacity – the largest annual increase to date, signalling real momentum in the shift to renewables.

However, this came against a ‘stark backdrop’ with global temperatures remaining above 1.5°C compared with the pre-industrial level, wildfires, floods and other climate-related disasters underscoring the need for systemic change. 2024 was also the hottest year on record.

Solar PV led the growth, contributing 602 GW and accounting for 81% of the total capacity increase, supported by rapidly falling costs, large-scale deployments and mature supply chains. On the other hand, the annual growth of solar power additions fell to 32%, down from 82% in 2023. This slowdown reflects growing challenges, including grid saturation, policy shifts and tighter financing in several key markets, said the REN21 report.

Meanwhile, wind power capacity grew merely 0.2%, with China adding 79.8 GW in 2024, while wind additions ‘slowed significantly’ in other regions, so global additions came to 117 GW globally since 2023. Deployment of battery storage hit record levels, driven by falling prices and growing recognition of storage as critical for grid reliability.

‘However, despite this momentum, renewable energy growth could not keep pace with global electricity demand, which was driven by higher temperatures, industrial expansion and rapid electrification of emerging markets,’ said REN21. Here again, the report noted the impact of new data centres and AI on electricity demand. What’s more, energy-related CO₂ emissions increased 0.8% compared to 2023.

While energy security remained in the spotlight, ‘as geopolitical tensions, trade disruptions and rising economic nationalism influenced national energy strategies, countries sought to secure supply and reduce external dependencies and control prices,’ said REN21.

Although some countries accelerated investments in renewables and energy storage, fossil fuel investments also grew, often driven by industrial lobbying and short-term security concerns.

The report also recognised that despite record growth, projections indicate that the world will fall 800 GW short of the internationally-agreed COP28 target calling for a tripling of renewable power by 2030.

Global offshore wind capacity reaches ‘inflection point’

Meanwhile, installed offshore wind capacity reached 83 GW in 2024, in a record year for construction and auctions, according to a new report by the Global Wind Energy Council (GWEC), but there are concerns that the sector has reached an ‘inflection point’ where the pattern of growth turns into a pattern of decline.

The Global Offshore Wind Report shows the offshore wind industry adding another 8 GW of capacity in 2024. Government auctions awarded 56 GW of new capacity globally last year, while the industry is constructing another 48 GW of offshore wind worldwide – another record.

The report highlights significant policy and regulatory breakthroughs, impacting growing offshore wind markets in countries including Japan, South Korea and the Philippines. However, despite the strong pipeline of projects, the report also highlights a catalogue of ‘macroeconomic headwinds’: failed auctions, supply chain constraints and increasing policy instability, particularly in the US, which have contributed to a downgrading of GWEC’s short-term outlook.  

GWEC recommends that the industry and governments ‘now need to urgently work together to redesign auction processes, and to focus on delivery and better risk sharing so that offshore wind can fulfil its vital role in providing large scale and secure clean power.’

Hydropower generation rebounds in 2024

Compared to 2023, hydropower generation recovered strongly in 2024, rising by 10% to 4,578 TWh, while pumped storage hydropower (PSH) saw a 5% increase in global capacity, according to the 2025 World Hydropower Outlook published by the International Hydropower Association (IHA).

Global hydropower capacity grew by 24.6 GW last year, including 16.2 GW of conventional hydropower and 8.4 GW of PSH (which it calls ‘the water battery of the energy sector’, referring to its demand-following and grid-balancing effects). The global hydropower development pipeline now exceeds 1,075 GW.

The IHA revealed what it called ‘strong global momentum’ for hydropower development, with a sharp rise in PSH. Indeed, hydropower is considered to be the world’s largest low-carbon energy resource, supplying 14.3% of global power and supporting 150 countries’ power systems.  

According to the report, the 10% rise in hydropower marked a strong rebound from drought-affected lows the previous year. While global addition of PSH signalled ‘an accelerating trend’, as annual PSH additions nearly doubled in the past two years, raising the five-year average to 6 GW/y, up from 2–4 GW across the previous two decades.

The growth of the hydropower development pipeline ‘reflects both the rising momentum behind electricity storage and the enduring importance of conventional hydropower in building low-carbon energy systems', said the IHA. And it added: ‘Based on typical project pipelines, most of the under-construction capacity is expected to be commissioned by 2030.’

However, despite the positive trends, the sector faces a potential shortfall of 60–70 GW against the International Renewable Energy Agency’s (IRENA) hydropower target of ‘tripling renewables’ by 2030. ‘Accelerated project approvals and financing will be critical to closing the gap,’ said the IHA.

IHA President Malcolm Turnbull said this year’s Outlook is encouraging, ‘as it shows that global new capacity is accelerating after several years of stagnation… and with increased solar and wind power on the grid, hydropower plays an increasingly vital role in the global energy transition’.

However, he also raised concerns about the ability of private-sector markets to deliver what is needed: ‘Continued momentum will require bold policy action, including reforms to reward hydropower’s multiple benefits, and faster permitting. The only resource we lack is time.’