Growing power demand and emerging sectors are accelerating renewable energy development as countries expand large-scale projects and storage infrastructure.
New research from DNV, the independent energy assurance specialist, indicates that the Middle East is entering a period of rapid renewable energy growth, led by mega solar installations and expanding storage capacity. The report, Rise of renewables in the Gulf region, launched today at the World Future Energy Summit, projects that variable renewable capacity across MENA will increase by around ten times by 2040 and continue climbing through 2060, despite the region’s continued prominence in oil and gas production.
Renewable energy is expected to become a core pillar of electricity supply in the decades ahead. By 2060, electricity is forecast to account for 35% of total energy demand in the region, with most of it generated from renewable sources. Solar and wind together are expected to provide approximately 85% of power generation, with solar contributing about 45% and wind roughly 40%.
“The rapid rise of renewables in the Gulf, and MENA more broadly, is not replacing hydrocarbons overnight, but it is reshaping the power system,” said Ditlev Engel, CEO, Energy Systems at DNV. “GCC countries are building some of the world’s largest solar and storage projects while still supplying global oil and gas markets. This development is driven mainly by economics. Renewables now provide low-cost electricity, and clean power is becoming necessary for competitive industry and future hydrogen production.”
Mega projects and new demand fuel growth
The report explains that growth is being driven by both increasing renewable supply and rising electricity demand. Large-scale renewable projects are expanding across the region, including mega solar parks, solar-plus-storage developments and new wind farms. Meanwhile, electricity demand is growing in sectors such as data centres, electric mobility and green hydrogen, while existing industries are turning to low-carbon power due to regulatory measures such as the EU Carbon Border Adjustment Mechanism.
A major turning point is expected around 2040, when annual growth in renewable electricity generation is projected to surpass overall electricity demand growth. This shift will steadily increase the share of renewable power in the regional energy mix.
Solar leads the way as wind and storage scale up
Solar continues to dominate the renewable landscape. Installed capacity is expected to jump from 76GW in 2024 to 340GW by 2029. By the end of the decade, solar power is projected to supply nearly one-fifth of total electricity. The proportion of solar projects paired with battery storage is also set to rise as developers pursue 24-hour supply and greater grid flexibility.
Although wind currently plays a smaller role, capacity is forecast to triple each decade between 2020 and 2060. Wind generation complements solar output, delivering more power at night and during windy seasons, especially when supported by storage systems.
Overall, DNV forecasts that solar and wind generation across MENA will grow about fourteen-fold by 2040, alongside a tenfold increase in installed capacity. “The Gulf is moving from discussion to deployment,” said Jan Zschommler, Market Area Manager for Middle East & Africa, Energy Systems at DNV. “Utility-scale solar, wind, and storage projects are now being built at a pace that changes the regional power mix. Our modelling shows that renewables growth will exceed demand growth after 2040. That is when the transition in the region’s power mix starts to accelerate.”
Storage and grid flexibility become key
Energy storage capacity is projected to rise dramatically from around 36GWh today to nearly 9,500GWh by 2060. Batteries will increasingly take over from thermal power plants as the primary source of short-term grid balancing. Regional interconnections will also support system stability and facilitate electricity trading as renewable penetration increases.
These findings complement DNV’s 2025 Energy Industry Insights survey, which draws on responses from energy executives worldwide. The Middle East was identified as the most optimistic region globally regarding industry prospects. Most respondents expect revenue and profit growth, with many highlighting renewable expansion and supporting infrastructure as key contributors. The survey underscores strong investment interest, expanding project pipelines and confidence in long-term growth, offering further insight into industry sentiment across the region.
The full report is available at https://www.dnv.com/energy-transition-outlook/rise-of-renewables-in-the-gulf-region/
