Middle East’s Renewable Energy Bet: Big Wins, Tough Truths
March 3, 2025
ByAlan Mammoser– Mar 03, 2025, 6:00 PM CST
- Over the past decade, MENA’s renewable capacity has expanded from 1 GW to over 30 GW, with projections reaching 131 GW by 2030.
- MENA countries have over 110 hydrogen projects, mostly green hydrogen, with ambitious targets like 10 Mtpa by 2030.
- Saudi Arabia is accelerating renewables, with 9 GW under construction and large-scale hydrogen and carbon capture initiatives.
While geopolitical alignments are shifting significantly in 2025, with uncertain outcomes for energy, the countries of the Middle East and North Africa (MENA) remain committed to their energy transition targets under the Paris framework.
A new report by the Desertech Industrial Initiative (Dii) think tank, MENA Energy Outlook 2025, documents significant investments already made in new energy during the past ten years.
‘;
document.write(write_html);
}
The report looks closely at three critical areas of the energy transition: renewables, hydrogen and energy storage. It draws on comprehensive project tracking, including a renewable projects database, an MENA H2 tracker, and an energy storage projects database.
The Dii report’s findings came under discussion at the annual World Hydrogen MENA Conference and Exhibition in Dubai last month. Major projects and trends were highlighted, showing continuing momentum in the three areas of new energy.
What emerged was a clear picture of ongoing progress, in which major projects now form a strong foundation of investment upon which countries can continue to build. Despite inevitable setbacks in the world’s energy transition, the MENA region still holds great potential to become a global powerhouse.
Remarkable renewables
Renewable energy in the region barely existed 15 years ago, with approximately 1 GW installed across MENA. But the past decade has seen remarkable growth with some of the lowest costs of producing renewable power in the world, particularly for photovoltaic (PV).
Today, the region’s installed renewable energy capacity is more than 30 GW and growing rapidly.
Should all projects now announced, in development and under construction be realized, total installed capacity in 2030 will reach 131 GW, according to the Dii report.
Related: Rubio Pushes Iraq To Reopen This Crucial Pipeline
The UAE appears as a regional leader with 6.3 GW installed capacity, followed by Egypt (4.6 GW) and Saudi Arabia (4.5 GW). The UAE now hosts three of the largest solar plants in the world, including the Mohammed bin Rashid Al Maktoum Solar Park (MBR solar park) in Dubai planned to build out 5 GW, and other giga-scale projects in operation and under development in Abu Dhabi.
Saudi Arabia, although slower to start, is now developing enormous solar plants of 500 MW and more.
Hydrogen hype
Hydrogen development is at an inflection point globally. The regulatory uncertainties and persistent high cost of low-carbon hydrogen have held projects back. The absence of CO2 pricing in MENA countries makes the development of domestic markets difficult.
The European Union’s stated ambition for low-carbon hydrogen, to produce 10 Mt and import 10 Mt by 2030, creates a potential export market for MENA. But the EU will likely have much lower actual demand, between 4 and 7 Mt by 2030, according to the Dii report.
Despite the headwinds for hydrogen, MENA countries continue to show commitment with more than 110 announced projects at the end of last year, some 90 percent for green hydrogen. Many of these are combined with significant renewable energy requirements, but realistic timelines for their completion extend well beyond 2030, according to the Dii report.
In total quantity, the MENA countries’ combined targets are to produce 10 Mtpa in 2030, with Saudi Arabia having the most ambitious target. Egypt has the most projects with 29 announced projects, largely the legacy of MoUs signed during COP27 in 2022, with six under construction or to start soon.
UAE all-in
The UAE has the widest array of clean energy solutions deployed and in planning. The country was just starting fifteen years ago, when a 10 MW PV project was commissioned at Masdar City. That modest start has blossomed into a rapid and ongoing expansion of new energy and nuclear power.
The MBR Solar Park is now building its 6th phase adding 1800 MW, while the Al Ajban PV project in Abu Dhabi will be the fourth large utility-scale solar plant in the country, adding 1500 MW to the power grid next year.
The country’s clean energy apparatus is becoming increasingly sophisticated. In January, Masdar announced it will build a huge solar and battery storage plant, combining 5.2GW solar PV with 19 GWh BESS, intended to provide actual baseload power to the grid.
The UAE also pursues distributed solar power, although large utilities have tended to crowd private players out of the market. The Shams Dubai program has added 600 MW of industrial and commercial solar rooftops since 2015.
In hydrogen, the country is taking an ‘all colors’ approach, with a new national strategy for hydrogen. Masdar is committed to producing 1 Mt (million tonnes) green hydrogen by 2030. The national oil company Adnoc is committed to producing 1 Mt blue hydrogen with carbon capture.
The UAE’s embrace of carbon-free hydrogen for the UAE was confirmed by H.E. Sharif Al Olama, Undersecretary for Energy and Petroleum Affairs, Ministry of Energy & Infrastructure, speaking at World Hydrogen MENA last month.
He and other speakers reaffirmed the country’s commitment and described a remarkable array of initiatives and pilot projects. These include a ‘green hydrogen oasis’ strategy implemented at the Ta’ziz and Kezad industrial zones. There are waste-to-hydrogen projects underway, and a green steel plant pilot project of Masdar and Emirates Steel now in operation. Work on making the airports into hubs for sustainable aviation fuel (SAF) is in early planning. Meanwhile, there are ongoing discussions to link the Port of Fujairah on the Arabian Sea with Rotterdam for eventual hydrogen export.
There is also fascinating work to derive natural hydrogen – ‘white hydrogen’ – from ground wells in the region. Chris Wood, CEO, RAK Gas, described his company’s explorations and its plan to supply the glass and ceramics industry in the emirate of Ras Al Khaimah with white hydrogen by 2030.
KSA catching up
The Kingdom of Saudi Arabia (KSA) is now taking a leading role in the region’s renewables with fast deployment of large-scale projects. KSA has seen a surge in projects announcements, driven by its renewable energy target of 100 to 130 GW by 2030, which would requires 20 GW additions per year, according to the Dii report.
The country now has a remarkable 9 GW under construction according to the Dii report. The recently completed Ar Rass and Al Shauibah 1 projects added 700 MW and 600 MW respectively to its renewable power capacity. The Al Shuaiba 2 Solar PV project now in development will add an enormous 2030 MW to the country’s capacity.
The country’s hydrogen ambitions are well known, with the world’s largest green hydrogen project now under development at NEOM that is planned to produce 1.2 Mtpa of green hydrogen, powered by 4GW solar and wind power starting next year. The offtake is guaranteed by project partner Air Products, Inc., although the destination of so much relatively costly green hydrogen is currently unclear.
In KSA’s industrial east, the national oil company Aramco is pursuing blue hydrogen with carbon capture projects. The company is working with partners on the development of an enormous carbon capture and storage hub in Jubail, which will serve numerous industries in the area.
Egyptian ambition
In Egypt, new energy continues to be viewed as an economic necessity for a country struggling to meet its internal energy needs. Large solar and wind projects are underway in areas bordering the Gulf of Suez and in the south near Aswan, while a large nuclear plant is under construction with Russian assistance at El-Dabaa on the Mediterranean.
Emirati and Saudi companies are active in Egyptian clean energy. Recent completed solar projects at Kom Ombo, in Aswan governorate, include a 500 MW plant developed by AMEA Power, and a 200 MW plant developed by ACWA Power. The country has large PV + BESS projects in planning.
The total installed wind energy capacity in MENA is currently 6.2 GW, with Egypt leading the way, according to the Dii report. The recently completed Guelf of Suez 1 wind project added 250 MW clean power, while other major wind developments are progressing, including the Amunet (500MW) and RSWE Wind (500 MW) projects.
Even more ambitious projects are in planning, with Masdar recently joining local partners to sign a concession for an enormous 10 GW wind power project in Egypt. And at least one of Egypt’s many green hydrogen projects is advancing, with the recent award of Germany’s H2Global to the Egypt Green Hydrogen project, a partnership of the UAE’s Fertiglobe and Norway’s Scatec.
More momentum needs new markets
Last month’s conference in Dubai also highlighted progress in Oman, now inaugurating large solar PV projects while its Hydrom agency is opening a third round of hydrogen concession auctions. Hydrom is coordinating nationwide hydrogen infrastructure development including pipelines and high voltage power lines.
The recent Dii report gives updates on Oman, Qatar, Morocco, and other countries, including Mauritania’s admirable efforts. Morocco has more than 2 GW wind installed and continues to add capacity. Qatar, long a laggard in new energy, is planning to build its second major renewable energy project, the 2 GW Dukhan Solar Park.
The report’s tables and graphics provide data and major projects lists. It also offers its own ‘green’ scenarios to 2030, insights on data centers in the region, and a discussion of electrolyser capacity under development.
Taken together, the many projects and momentum toward new low-carbon energy in the Middle East and North Africa are impressive. Renewable energy and storage technologies are making economic sense across the vast region. However, domestic markets for new hydrogen-derived fuels are barely emerging, while export markets in Europe and Asia appear far in the future.
The region’s enormous renewable energy potential, with some of earth’s best solar and wind resources, may remain underdeveloped until countries adopt more advanced financial instruments to support new energy, including carbon pricing and green commodity markets.
By Alan Mammoser for Oilprice.com
More Top Reads From Oilprice.com
Search
RECENT PRESS RELEASES
