A new analysis by DNV indicates that the Middle East and North Africa is entering a phase of accelerated renewable power growth, led by large-scale solar projects and increasing deployment of energy storage. The report, Rise of Renewables in the Gulf Region finds that variable renewable capacity in the region is expected to increase around tenfold by 2040, with further growth projected through to 2060, alongside continued oil and gas production.
Renewables are expected to become a core source of electricity supply over the coming decades. By 2060, electricity is projected to account for around 35% of total energy demand in the region, with most electricity generated from renewable sources. Solar and wind combined are forecast to provide about 85% of electricity generation, with solar contributing roughly 45% and wind around 40%.
According to the report, growth is driven by both rising renewable capacity and increasing electricity demand. Large solar projects, solar paired with storage, and new wind developments are expanding across the region. At the same time, electricity demand is increasing from data centres, electric mobility and green hydrogen production, while existing industries are raising their use of lower-carbon electricity in response to external policy pressures such as carbon border measures.
A structural shift is expected around 2040, when annual growth in renewable electricity generation is projected to exceed growth in total electricity demand. This would result in a steady increase in the share of renewables within the overall electricity mix.
Solar power remains the dominant renewable technology. Installed solar capacity is projected to rise from 76 GW in 2024 to 340 GW by 2029, supplying close to one fifth of total electricity by the end of the decade. A growing proportion of new projects is expected to include battery storage to improve system flexibility and enable continuous power supply.
Wind power, while starting from a smaller base, is projected to triple in capacity in each decade between 2020 and 2060.
Energy storage is also expected to expand significantly, with capacity projected to increase from around 36 GWh today to almost 9,500 GWh by 2060. Batteries are expected to take on a larger role in providing short-term system flexibility, increasingly replacing thermal power plants. Regional grid interconnections are also expected to support system balancing and electricity trade as renewable penetration increases.
