The Middle East’s energy landscape is undergoing a significant transformation, with renewable sources like solar and wind projected to surge and surpass fossil fuels in the region’s power sector by 2040, according to Rystad Energy’s latest research.
Clean Energy’s Dramatic Rise
The analysis predicts a remarkable growth in renewables’ share of the Middle East’s power generation mix—from a mere 5% at the end of 2023 to a staggering 70% by 2050. Solar photovoltaic (PV) is expected to lead the way, accounting for over half of the region’s electricity supply by mid-century, a massive increase from just 2% last year.
However, despite this impending surge in clean energy installations, the region will continue to heavily rely on natural gas in the near term, with its usage increasing and peaking around 2030.
Nishant Kumar, a renewables and power analyst at Rystad Energy, points out that the Middle East lags behind Asia and Africa in the renewable energy shift. He anticipates that renewable power will overtake fossil fuel generation in Asia and Africa by 2032.
Factors Driving the Shift
Several factors drive this energy transition, including rapid industrial growth, a burgeoning population, and a global push to reduce carbon emissions in the Middle East, a region traditionally dominated by oil and gas.
With a population exceeding 280 million and one of the world’s fastest-growing populations, power demand in the Middle East has more than doubled in the past two decades. The report projects power demand in the Middle East to reach approximately 2,000 terawatt-hours by 2050, up from the current 1,200 TWh.
Kumar emphasizes that the region’s escalating residential power demand, need for economic diversification, freshwater desalination, and anticipated electric vehicle adoption “underline the urgency for a transition to renewables” and its “long-term sustainability.”
Solar Energy Takes Center Stage
Solar energy is taking a central role in Middle Eastern energy policies as the most cost-effective source. Saudi Arabia, for instance, has achieved a world record-low levelized cost of $10.4 per megawatt-hour for solar PV, thanks to factors like low costs, large-scale projects, and abundant solar irradiation.
The total installed solar capacity in the region surpassed 16 gigawatts (GW) at the end of 2023 and will approach 23 GW by year-end. Projections indicate it will exceed 100 GW by 2030, with green hydrogen projects contributing to 30% annual growth.
Projections show Saudi Arabia, the UAE, Oman, and Israel will account for nearly two-thirds of the region’s total solar capacity by 2030. Saudi Arabia leads this group, targeting over 58 GW.
Commitments to a Renewable Future
Major Middle Eastern nations have made public commitments to increase renewable energy in their power mixes:
- Saudi Arabia aims for 50% renewables by 2030, up from 2% currently.
- UAE targets 44% renewables by 2050, up from 6% today.
- Oman plans for a 30% renewable share by 2030, up from 3%, and envisions becoming the largest green hydrogen exporter.
As the Middle East shifts away from its traditional reliance on oil and gas, the region’s energy future is set for a historic clean energy transformation in the coming decades.