Solar Power Generation to Increase Significantly in the Middle East

Communication Author: EqualOcean News Editor: 周雯 Jun 04, 2024 02:54 PM (GMT+8)

​According to the latest research by Rystad Energy, the renewable energy capacity in the Middle East is set to increase significantly in the coming years. By 2040, it is expected that green energy will surpass fossil fuels in electricity production.


 Solar photovoltaics will become the main energy source in the region, accounting for more than half of the electricity supply by mid-century, up from just 2% last year. By 2050, renewable energy, including hydropower, solar, and wind, is expected to make up 70% of the Middle East's power structure. This is a massive leap from the 5% recorded at the end of 2023, indicating a transformative shift in the region's energy landscape. Despite the upcoming increase in clean energy installations, the region will still heavily rely on natural gas in the short term, with usage expected to continue growing until around 2030 when it reaches its peak.

The Middle East, traditionally a major oil and gas producer, is shifting towards renewable energy to cope with rapid industrial development, population growth, and global carbon reduction initiatives. The region has a population of over 280 million, making it one of the fastest-growing areas in the world, with a population increase of more than 60% since 2000. This has led to a doubling of electricity demand over the past 20 years.

With continuous population growth, the region's economic prospects are becoming increasingly bright. By 2050, due to industrial development, population growth, and the electrification of transportation and other sectors, electricity demand is expected to reach around 2,000 terawatt-hours (TWh), up from the current 1,200 TWh. Currently, the residential sector accounts for 40% of total electricity demand, followed by the commercial sector at 26%, the industrial sector at 22%, with the remaining 12% including agriculture and transportation. As of the end of 2023, the Middle East's electricity generation heavily relies on fossil fuels, which account for 93% of the total. Renewable energy accounts for 3%, with nuclear and hydropower each contributing 2%. Natural gas power generation makes up nearly three-quarters of the region's electricity, accounting for 40% of total natural gas demand. By 2030, renewable energy is expected to constitute about 30% of the region's installed capacity, with this proportion potentially rising to 75% by 2050.

Battery storage is expected to grow significantly by the 2030s, effectively mitigating the intermittency of solar and wind energy and aiding a smooth energy transition. Due to the relatively low hydropower potential and low natural gas prices, the Middle East will continue to rely on natural gas power generation as the primary energy source. The share of natural gas in the power structure is projected to decrease from 74% at the end of 2023 to 46% by 2040, and further to 22% by 2050.

The Middle East lags behind Asia and Africa in renewable energy transition, with renewable energy generation in Asia and Africa expected to surpass fossil fuel generation by 2032. Since 2019, renewable energy generation in Europe has already exceeded fossil fuel use. Nearly 40% of electricity in the Middle East is consumed by the ever-growing residential sector, leading to a surge in electricity demand. Combined with economic diversification and the need for freshwater through desalination, the urgency for transitioning to renewable energy is underscored. Furthermore, the long-term growth of electric vehicles indicates a further increase in future energy demand, making the shift to renewable energy not only necessary but also an inevitable choice for the region's sustainable development.

Solar energy is becoming increasingly important in the energy policies of Middle Eastern countries. As the cheapest form of energy, the levelized cost of electricity (LCOE) for solar photovoltaics in Saudi Arabia has set a world record at just $10.4 per megawatt-hour (MWh). The region has exceptional solar potential, with countries like Saudi Arabia, the UAE, and Oman receiving over 2,000 kilowatt-hours (kWh) of solar irradiation per square meter annually. By the end of 2023, the total solar capacity in the Middle East exceeded 16 gigawatts (GW), with expectations to approach 23 GW by the end of 2024. Forecasts indicate that by 2030, capacity will surpass 100 GW, with green hydrogen projects contributing a 30% annual growth rate. By the end of the century, Saudi Arabia, the UAE, Oman, and Israel are projected to collectively account for nearly two-thirds of the region's total solar capacity. Saudi Arabia's Sudair solar project, with a generation capacity of 1.5 GW, is now fully operational, bringing the country's total solar installed capacity to over 2.7 GW. Saudi Arabia aims to increase its generation capacity to over 58 GW by 2030, reflecting its commitment to raising the share of renewable energy in its power generation from the current 2% to 50% by 2030.

The UAE has also publicly committed to transitioning to clean energy, focusing on building solar photovoltaic power. By 2030, it plans to increase its generation capacity from the current 6 GW to 14 GW. The country's goal is to increase the share of renewable energy in its power structure from the current 6% to 44% by 2050.