The CEO of trade association WindEurope, Giles Dickson, warned that European Union (EU) governments would need to provide "ambitious" energy and climate action plans with clarity on post-2020 volumes and auctions in order to realise the scenario outlined in the IEA's annual analysis of global trends.
Solar power could account for more than 30% of all new capacity in the next 25 years, and global growth in solar PV capacity in 2016 was greater than for any other form of generation, with costs down 70%.
But despite the growth of renewables and the shift from coal to gas, the current policy trajectory is "not enough, given the growth in global energy consumption, to put CO2 emissions on a declining trend", said IEA senior analyst Tim Gould.
Oil products and transport will fuel CO2 emissions growth. Based on current and announced new policies, gas is set to overtake coal as an energy source in the early 2020s, while renewable energy will meet 40% of the increase in primary demand, the IEA forecasts.
Overall demand for energy is expected to grow 30% by 2040 globally, the agency noted, despite falling in Europe.
In an alternative "sustainable development scenario" the IEA's report offers policymakers a range of goals to achieve climate stabilisation, cleaner air and universal access to electricity.
The agency's executive director Fatih Birol said the strategy showed there was "no conflict between addressing climate change and bringing energy to everybody".
Efficiency, advanced pollution controls, renewables and reduced reliance on combustion fuels were key to addressing air pollution, Gould added.
However, to realise the sustainable development scenario, the global energy system needs to become twice as efficient as it is today by 2040.
The use of fossil fuels other than natural gas will have to fall, with the combustion of coal and oil peaking before 2025. In addition, total CO2 emissions from energy would need to fall to around 18,000 million tonnes (Mt) by 2040, half the level predicted on the basis of existing and announced policy, the report notes.