India advances on energy efficiency, but WEF flags security, capital challenges in global energy transition

India has shown notable improvement in energy efficiency and investment readiness, according to the World Economic Forum’s Fostering Effective Energy Transition 2025 report. Released on June 18, the report reveals that global momentum for cleaner, more equitable energy systems is accelerating — yet key challenges around security and financing persist, particularly in fast-growing economies.

The report benchmarks 118 countries on the Energy Transition Index (ETI) based on three core performance metrics — energy security, sustainability and equity — and five readiness factors, including political commitment, finance and investment, infrastructure, innovation, and human capital. In 2025, 65% of countries improved their overall ETI scores, with 28% showing progress across all core dimensions.

India was among the countries that made significant gains in energy efficiency and investment potential, though concerns remain over infrastructure gaps and rising demand pressures. The report calls for urgent investment in emerging economies like India to ensure the transition keeps pace with rapid economic and technological growth.

“Energy systems are evolving at varying speeds,” said Roberto Bocca, Head of the Centre for Energy and Materials at the World Economic Forum. “Staying on track demands urgent investment in fast-growing emerging economies.”

Despite a record $2 trillion invested in clean energy globally in 2024, the report notes that energy security stagnated, and global emissions reached a new high of 37.8 billion tons — largely due to surging demand from AI, data centres, and cooling systems. Energy consumption rose 2.2% year-on-year in what was the hottest year on record.

Equity saw the strongest improvement among the ETI dimensions, supported by stable energy prices and targeted subsidy cuts. Sustainability also improved due to greater adoption of renewable energy and improved energy efficiency. However, energy security lagged due to continued import dependence, lack of system flexibility, and insufficient diversification.

“AI is the single greatest lever for creating a more adaptive and resilient energy future,” said Muqsit Ashraf, Group Chief Executive for Accenture Strategy. “Firms using AI and data effectively are leading the way in long-term growth and system resilience.”

Globally, Sweden, Finland, and Denmark topped the ETI rankings, followed by Norway and Switzerland. China reached 12th place, while the US and Brazil entered the top 20. India, while not among the highest-ranked, has been acknowledged for its improvements in efficiency and capacity — signaling potential for faster progress with better-targeted capital flows and infrastructure development.