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MENA’s renewable energy capacity is expected to soar over the coming years with green energy usage beating out fossil fuels by 2040, according to Norwegian energy research company Rystad Energy’s latest research. Renewables are expected to make up 70% of the region’s energy mix by 2050, up from 5% in 2023 — and might reach 75% of installed capacity by the same period. Battery energy storage is expected to grow significantly in the 2030s, to support the intermittency of solar and wind power.
Solar PV will lead the charge: Solar photovoltaic energy (PV) — currently the cheapest energy source reaching a global record low levelized cost of electricity at USD 10.4 per MWh — is expected to account for over half of total power supply by 2050, compared to 2023’s 2%. The cost competitiveness of the energy source is due to low hurdle rates, development of large-scale projects, decreasing hardware prices, low labor costs, and high solar potential at 2k kWh per sqm in Saudi Arabia, UAE, and Oman. Overall, solar capacity is predicted to reach 23 GW by the end of the year and over 100 GW by 2030.
But the short term is not so green: The region is still expected to rely heavily on natural gas in the short term and continue to use it until about 2030 before becoming a transitional fuel in the long term. Fossil fuels made up 93% of total power generation by the end of 2023. Natural gas will represent just under 75% of that number but its share of total generation is expected to slump to 22% by 2050.
Which sectors in the Middle East consume the most electricity? “The region’s residential sector currently accounts for 40% of total power demand, followed by the commercial sector at 26% and the industrial sector at 22%. The remaining 12% includes sectors such as agriculture and transport,” the analysis found.
