The Rise of Renewable Energy in the Middle East: Projects, Policies, and Prospects

The Middle East is rapidly transitioning from fossil fuel dependency to renewable energy, with massive investments in solar, wind, hydrogen, and net-zero strategies driving diversification and economic resilience. Despite challenges like fossil reliance, intermittency, and regulatory gaps, the region’s abundant resources and sovereign backing position it as a global leader in green energy and hydrogen exports.

In 2025, the Middle East is rapidly rewriting its energy narrative. Once defined by oil exports and fossil-fuel dependency, the region is now taking decisive steps in areas such as solar parks, green hydrogen facilities, wind farms, energy storage, and net-zero pledges. Spurred by plunging technology costs, national climate strategies, rising demand from urbanization and digital infrastructure, and geopolitical pressure, the renewable energy transformation is accelerating.

Yet, the journey is not straightforward. Energy demand in the region continues to grow, intermittency challenges persist, and hydrocarbons remain deeply entrenched in fiscal structures. In this article, we provide a detailed overview of the Middle East’s renewable energy landscape, its policy drivers, national goals, landmark projects, challenges, and opportunities,  before considering how renewable energy solutions will shape the region’s digital and urban future.

Policy frameworks, investment trends, and climate goals

Governments across the Middle East have tied renewable expansion to long-term diversification and climate strategies. According to the International Energy Agency (IEA), total energy investment in the region was around US$175 billion in 2024, of which only about 15 percent went into clean energy. Still, under the IEA’s Announced Pledges Scenario (APS), clean energy investment is projected to more than triple by 2030.

Specifically, looking at specific plans:

• United Arab Emirates: The UAE was the first Middle Eastern nation to commit to a net-zero target by 2050. Its UAE Net Zero 2050 strategy emphasizes scaling solar, wind, and hydrogen, with Dubai’s Mohammed bin Rashid Al Maktoum Solar Park (target capacity 5,000 MW by 2030) already one of the world’s largest solar facilities. At COP28, the UAE also pledged US$30 billion in catalytic capital at COP28 to support climate-focused investments.
• Saudi Arabia: Under Vision 2030, Saudi Arabia aims to generate 50 percent of its electricity from renewable energy sources by 2030. It has also announced a longer-term net-zero target for 2060. The Public Investment Fund (PIF) is backing giga-projects like NEOM, which integrates renewable generation and a US$8.4 billion green hydrogen facility.
• Qatar: Qatar’s National Vision 2030 emphasizes solar investments, including the 800 MW Al Kharsaah solar plant completed in partnership with TotalEnergies and Marubeni.
• Oman: Oman has announced plans to reach net zero by 2050, focusing on green hydrogen development in Duqm and Salalah, leveraging its abundant solar resources and export infrastructure.
• Egypt: Egypt, already a leader in wind and solar, aims to source 42 percent of its electricity from renewables by 2035, anchored by projects such as the 1.6 GW Benban Solar Park and Gulf of Suez wind projects.

Together, these frameworks signal that governments view renewables not just as a climate obligation, but as a pillar of long-term economic resilience and competitiveness.

Middle East renewable energy projects, country-by-country

The Middle East hosts some of the world’s largest renewable energy projects. A country breakdown highlights the scale and diversity of activity.

• UAE: Dubai’s Mohammed bin Rashid Al Maktoum Solar Park is on track to reach 5 GW by 2030, already among the world’s largest solar facilities. The UAE’s clean energy champion Masdar is investing regionally and globally in solar, wind, and hydrogen.
• Saudi Arabia: NEOM’s integrated renewable system, the 300 MW Sakaka solar PV project, and upcoming wind projects in Dumat al-Jandal. The country also leads regional hydrogen investment, aiming to become a top exporter. Beyond NEOM’s green hydrogen megaproject, Saudi Arabia has launched multiple large-scale solar parks, including: Al Shuaibah PV plant (~2.6 GW), Ar Rass 2 Solar PV Park (~2 GW), and Al Kahfah Solar PV Plant (~1.425 GW). In 2024, the government announced a package of seven renewable projects (five solar and two wind) worth US$ 8.3 billion, adding 15 GW of capacity by 2028.
• Qatar: The Al Kharsaah Solar Plant (800 MW), provides around 10 percent of the country’s peak power demand and is a symbol of Qatar’s strategy to diversify beyond LNG.
• Oman: Major hydrogen consortia are developing projects in Duqm and Salalah, with multi-billion-dollar export ambitions for hydrogen and ammonia.
• Egypt: Benban Solar Park (1.6 GW) near Aswan is one of the largest in Africa, while Gulf of Suez wind farms are expanding with support from international finance.
• Jordan: Jordan has tapped both wind (for example, Tafila Wind Farm) and distributed solar, now meeting over 20 percent of its power demand from renewables.

This growing pipeline underscores the region’s attractiveness for cross-border public-private partnerships (PPPs) and foreign developers.

Market drivers for renewable energy transition in the Middle East

Several structural factors explain the region’s accelerated renewable push, including, among others:

• Economic diversification: Oil-dependent economies are under pressure to diversify revenue sources. Renewables create industrial opportunities in manufacturing, technology, and services.
• Energy security and demand growth: Rapid urbanization and population growth mean electricity demand is surging, particularly for cooling and water desalination. Renewable;es provide an additional supply stream.
• Cost competitiveness: Solar PV costs in the region have reached record lows, with tariff bids as low as US$0.013 per kWh, making renewables cheaper than conventional gas in some cases.
• Global positioning: Middle Eastern states seek to strengthen their role in global energy transition markets, particularly green hydrogen and ammonia exports.

Challenges to overcome

Yet for all the momentum behind renewable energy solution, deep-rooted structural barriers continue to weigh on the region’s energy transition. The most obvious is the enduring reliance on fossil fuels. Hydrocarbons still account for the bulk of power generation, and for many governments, they remain a cornerstone of fiscal stability. Shifting away from this dependence is not a matter of simply building solar or wind farms, it raises fundamental questions about how to reconfigure national budgets, subsidies, and long-standing social contracts without triggering economic or political instability.

Technical hurdles also loom large. Solar and wind, while abundant, are inherently intermittent, and the Middle East is only beginning to grapple with the scale of storage solutions that a fully renewable grid would require. Battery deployment, for instance, remains limited and expensive, while regional grids still lack the flexibility to absorb large shares of variable power. Without these systems in place, renewables risk hitting a ceiling.

Institutional and regulatory challenges add another layer of complexity. While headline-grabbing flagship projects suggest progress, beneath the surface regulatory clarity is often inconsistent. Procurement rules, permitting processes, and policy signals vary widely from one market to another, creating uncertainty for investors and slowing the pace of broader adoption.

Finally, there is the water-energy nexus, an issue particularly acute in a region where desalination is essential for survival. Desalination plants are notoriously energy-intensive, and while integrating them with renewable power is technically possible, the financial costs are daunting. Balancing water security with the ambition for cleaner energy thus becomes another difficult puzzle to solve.

Opportunities ahead

If the region can successfully navigate its challenges, the future of renewables in the Middle East looks exceptionally promising. One of the most talked-about opportunities is green hydrogen. With an abundance of solar and wind resources, as well as a unique geographical position between Europe and Asia, the Middle East has the potential to become a global leader in hydrogen exports. This is not just about energy production: it is about shaping the future of international energy trade.

Beyond hydrogen, the region is beginning to experiment with cross-border electricity trade. Initiatives such as the Egypt-Saudi interconnector are early signs of a larger transformation, one in which the Middle East could eventually build a fully integrated power market that spans multiple countries. Such projects also signal a shift in thinking: energy is no longer confined within national borders but is becoming a shared regional asset.

Investment is already following this vision. Sovereign wealth funds across the Gulf, alongside international developers, are pouring capital into renewable projects. Their willingness to commit long-term capital reflects not only confidence in the sector but also recognition that renewables are becoming central to the region’s economic diversification strategies. Public-private partnership models are playing a key role here, spreading risks while accelerating development timelines.

Finally, renewables are finding powerful synergies with the Middle East’s digital ambitions. As data centers, electric mobility, and futuristic smart city projects like NEOM continue to expand, they will need vast amounts of clean, reliable energy. This creates a built-in market for renewable power that goes far beyond traditional consumption patterns, turning sustainability into both an environmental and economic imperative.

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