Rising electricity consumption and emerging industries are fuelling a sharp expansion in solar and wind capacity as governments roll out mega projects and energy storage solutions.
A fresh study from DNV, the independent energy expert and assurance provider, reveals that the Middle East is entering a phase of rapid renewable energy expansion, driven by large-scale solar developments and the growing deployment of energy storage. The report, Rise of renewables in the Gulf region, launched today at the World Future Energy Summit, forecasts that variable renewable capacity across MENA will increase roughly tenfold by 2040 and continue rising through to 2060, even as the region maintains its role as a major oil and gas producer.
Renewable energy is set to become a cornerstone of electricity supply over the coming decades. By 2060, electricity is expected to account for 35% of total energy consumption in the region, with the majority of power generated from renewable sources. Solar and wind combined are projected to deliver around 85% of electricity, with solar contributing approximately 45% and wind close to 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.”
Large-scale projects and new electricity demand drive acceleration
The report identifies two main growth drivers: expanding renewable supply and rising electricity demand. Major renewable developments are increasing across the region, including mega solar parks, solar-plus-storage facilities and new wind farms. At the same time, electricity consumption is climbing in sectors such as data centres, electric transport and green hydrogen production, while existing industries are switching to low-carbon power in response to policies like the European Union Carbon Border Adjustment Mechanism.
According to the report, a pivotal change is expected around 2040. From that point onwards, annual growth in renewable generation is forecast to outpace total electricity demand growth, steadily increasing the proportion of renewable power in the overall energy mix.
Solar dominates as wind and storage gather pace
Solar remains the dominant renewable technology across the region. Installed capacity is projected to rise from 76GW in 2024 to 340GW by 2029. By the end of the decade, solar is expected to deliver nearly 20% of total electricity. Projects integrated with battery storage are also set to grow as developers seek continuous supply and improved system flexibility.
Wind power, although currently a smaller contributor, is forecast to triple in capacity every decade between 2020 and 2060. Wind output complements solar generation, producing more power at night and during seasonal wind peaks, particularly when combined with storage solutions.
Overall, the report predicts that solar and wind generation in MENA will increase roughly fourteen-fold by 2040, alongside a tenfold rise 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.”
Energy storage and flexibility become critical
The analysis shows that energy storage capacity is expected to surge from around 36GWh today to almost 9,500GWh by 2060. Batteries will increasingly replace conventional thermal plants as the main source of short-term grid flexibility. Cross-border interconnections will also play a growing role in balancing systems and enabling electricity trading as renewable shares expand.
These findings align with insights from DNV’s 2025 Energy Industry Insights survey, which gathers views from energy executives worldwide. The Middle East emerged as the most optimistic region globally regarding the future of the energy sector. Most respondents anticipate revenue and profit growth, with many citing rapid renewable deployment and supporting infrastructure as major drivers. The survey highlights strong investor appetite, expanding project pipelines and confidence in long-term growth prospects, offering further insight into how industry leaders view the region’s energy transition.
The full report is available at https://www.dnv.com/energy-transition-outlook/rise-of-renewables-in-the-gulf-region/