As geopolitical dynamics continue to shift in 2025, the Middle East and North Africa (MENA) region remains dedicated to achieving its energy transition goals under the Paris climate agreement. Despite uncertain outcomes in global energy trends, countries in the MENA region are making substantial progress toward their renewable energy targets.
A recent report from the Desertech Industrial Initiative (Dii), titled MENA Energy Outlook 2025, highlights the considerable investments made over the past decade in renewable energy. The report focuses on three main areas of energy transition: renewable energy, hydrogen, and energy storage. It draws from extensive tracking of projects across these sectors, including databases on renewable projects, hydrogen development, and energy storage initiatives.
These findings were discussed at the World Hydrogen MENA Conference in Dubai last month, where key projects and trends underscored the region’s continuing momentum in new energy. Despite challenges in the global energy transition, MENA countries are building a solid foundation of investment, positioning themselves as potential leaders in the global energy market.
Renewable Energy Growth in MENA
Fifteen years ago, renewable energy in MENA was virtually nonexistent, with only about 1 GW of capacity across the region. However, the past decade has seen impressive growth, with some of the lowest costs for producing renewable power, especially photovoltaic (PV) solar energy. Today, the region’s total renewable energy capacity exceeds 30 GW and continues to expand rapidly.
The Dii report estimates that by 2030, the total installed renewable capacity in MENA could reach 131 GW if current and planned projects are completed. The UAE leads the region with 6.3 GW of installed capacity, followed by Egypt (4.6 GW) and Saudi Arabia (4.5 GW). The UAE hosts three of the world’s largest solar plants, including the Mohammed bin Rashid Al Maktoum Solar Park in Dubai, which aims to reach 5 GW in capacity. Saudi Arabia, though slower to start, is now focused on developing large solar plants, including several with capacities of 500 MW or more.
Hydrogen Development Faces Challenges
The global hydrogen market is at a critical juncture, with regulatory uncertainty and the high costs of low-carbon hydrogen slowing down projects. The lack of carbon pricing in MENA countries makes it challenging to develop domestic markets for hydrogen. However, there is potential for MENA to become a major exporter, particularly to Europe, which has set a target to produce and import 20 million tonnes of low-carbon hydrogen by 2030. The Dii report suggests that the EU’s actual demand will likely fall between 4 and 7 million tonnes by 2030.
Despite these challenges, MENA countries are pushing forward with over 110 announced hydrogen projects, with 90% focused on green hydrogen. Most of these projects are tied to large renewable energy requirements, but their completion dates are expected to extend well beyond 2030. Saudi Arabia, Egypt, and the UAE are leading in hydrogen ambitions, with Saudi Arabia setting the most ambitious targets for production.
UAE’s Comprehensive Clean Energy Approach
The UAE has been at the forefront of clean energy development. Starting with a modest 10 MW PV project at Masdar City 15 years ago, the country has rapidly expanded its renewable energy and nuclear power infrastructure. The Mohammed bin Rashid Al Maktoum Solar Park, now building its sixth phase, is set to add 1.8 GW to the grid. The UAE is also advancing a significant solar and battery storage project in January, which will combine 5.2 GW of solar power with 19 GWh of battery energy storage systems (BESS) to provide reliable baseload power.
The UAE’s hydrogen strategy is equally ambitious, with a goal to produce 1 million tonnes of green hydrogen by 2030. National oil company ADNOC is also working on blue hydrogen production through carbon capture.
Saudi Arabia Gaining Ground
Saudi Arabia has significantly ramped up its renewable energy efforts, with a goal to add between 100 GW and 130 GW by 2030. The country currently has 9 GW of renewable capacity under construction. Recent projects like Ar Rass and Al Shauibah 1 added 700 MW and 600 MW, respectively. Saudi Arabia is also developing the world’s largest green hydrogen project at NEOM, expected to produce 1.2 million tonnes of green hydrogen annually starting next year.
Egypt’s Energy Push
Egypt is investing heavily in renewable energy as part of its strategy to address internal energy needs. Large solar and wind projects are under construction, particularly in areas bordering the Gulf of Suez and near Aswan. The country is also working with international partners to build a nuclear plant in El-Dabaa. Egypt is actively pursuing new energy projects, with numerous solar and wind developments underway, including the recent completion of a 500 MW solar plant in Kom Ombo.
Regional Developments and Challenges
The energy transition in MENA extends beyond the UAE, Saudi Arabia, and Egypt. Oman, Qatar, Morocco, and Mauritania are also making strides in renewable energy. Oman is developing large solar PV projects and has launched a third round of hydrogen concession auctions. Morocco continues to expand its wind capacity, while Qatar is planning a second major renewable project, the 2 GW Dukhan Solar Park.
Despite the region’s progress, significant challenges remain. The lack of domestic markets for hydrogen and other green fuels hampers the development of new energy sources. While MENA holds enormous renewable energy potential, particularly in solar and wind power, the region will need to adopt more advanced financial instruments, including carbon pricing and green commodity markets, to fully realize its energy transition goals.
In conclusion, while MENA countries are making impressive progress in renewable energy, hydrogen, and energy storage, the path forward requires overcoming regulatory and market obstacles. With continued investment and the development of key technologies, MENA has the potential to become a global leader in clean energy.
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