Lower prices alone would not have a large impact on the deployment of renewables, but only if policymakers remain steadfast in providing the necessary market rules, policies and subsidies, the most recent report from the IEA’s latest World Energy Outlook 2015 warns.
The IEA said there were clear signs that an energy transition is underway: renewables contributed almost half of the world's new power generation capacity in 2014 and have already become the second-largest source of electricity after coal.
The coverage of mandatory energy efficiency regulation has expanded to more than one-quarter of global energy consumption.
The climate pledges submitted in advance of COP21 are rich in commitments on renewables and energy efficiency, and this is reflected in the IEA finding that renewables are set to become the leading source of new energy supply from now to 2040.
Their deployment grows worldwide, with a strong concentration in the power sector where renewables overtake coal as the largest source of electricity generation by the early-2030s.
The agency believes that renewables-based generation reaches 50% in the EU by 2040, around 30% in China and Japan, and above 25% in the United States and India.
The net result of the changes seen in the IEA’s modelling is that the growth in energy-related emissions will slow dramatically, but the emissions trajectory implies a long-term temperature increase of 2.7 degrees centigrade by 2100.
A major course correction is still required to achieve the world's agreed climate goal, IEA executive director Dr Faith Birol said.
"As the largest source of global greenhouse-gas emissions, the energy sector must be at the heart of global action to tackle climate change," he said.
"World leaders meeting in Paris must set a clear direction for the accelerated transformation of the global energy sector. The IEA stands ready to support the implementation of an agreement reached in Paris with all of the instruments at our disposal, to track progress, promote better policies and support the technology innovation that can fulfil the world's hopes for a safe and sustainable energy future."
He said the United Nations Climate Change Conference, needed to provide a "clear signal" to the energy sector that it needs to accelerate investment in clean energy.
