In this file photo engineers chat under a wind turbine at Lekela wind power station, near the Red Sea city of Ras Ghareb some 300 km (186 miles), from Cairo, Egypt, Wednesday, Oct. 12, 2022. AP
The report looked at scenarios based on current policies and said that coal use will fall back within the next few years, natural gas demand will reach a plateau by the end of the decade and rising sales of electric vehicles mean that the need for oil will level off in the mid-2030s before ebbing slightly by mid-century. Total emissions are currently going up each year, but slowly.
"Energy markets and policies have changed as a result of Russia's invasion of Ukraine, not just for the time being, but for decades to come,'' said the IEA's executive director Fatih Birol. A surge in demand following COVID-19 pandemic restrictions lifting and bottlenecks in supply chains have also contributed to soaring energy prices.
"The energy world is shifting dramatically before our eyes. Government responses around the world promise to make this a historic and definitive turning point toward a cleaner, more affordable and more secure energy system,'' Birol said.
The role of natural gas as a "transition fuel'' that will bridge the gap between a fossil-fuel based energy system to a renewable one has also taken a dent, the report said. Although it's a fossil fuel, natural gas is considered cleaner than coal and oil, as burning it produces less carbon dioxide.
But despite the largely positive outlook, the report adds that the share of fossil fuels in the global energy mix puts the world on track to a warming of 2.5 degrees Celsius (4.5 degrees Fahrenheit) by the end of the century, a whole degree (1.8 Fahrenheit) more than the target set in the Paris climate deal.
That's in line with a U.N. report released Wednesday that said current climate pledges are "nowhere near'' where they need to be to meet the ambitious target. Top climate scientists say that to keep warming in line with the 1.5 C goal, emissions need to be slashed by 45 percent by 2030.
Energy policy analysts say that while there are promising steps in the right direction, the move toward clean energy needs to be much faster.
"Clean energy investment is delivering. It is the reason why the world is on track to peak CO2 emissions. But that's only the first step. We need big emissions cuts, not a plateau,'' said Dave Jones, an energy analyst at London-based environmental think-tank, Ember.
The report estimated that clean energy investment will be above $2 trillion by 2030 but added it would need to double to keep the transition in line with climate goals.
"The energy crisis has detracted from the climate crisis, but fortunately the answer is the same to both: a gigantic step up in clean energy investment," Jones said.
"This report makes a very strong economic case for renewable energy which is not only more cost-competitive and affordable than fossil fuel alternatives but also is proving to be much more resilient to economic and geopolitical shocks,'' said Maria Pastukhova a senior policy advisor in E3G, a climate change think-tank.
She added that leaders and negotiators at the U.N. climate conference in Egypt next month will need to "double down'' on reducing the demand for energy and unlock finance for developing countries to help fund their transition to renewables which would speed up emissions cuts.