The Middle East and North Africa (MENA) region is entering a critical phase in its energy evolution, with electricity demand set to rise by 50% by 2035, according to the International Energy Agency’s Future of Electricity in MENA report. Population growth, expanding economies, and intensifying cooling needs driven by climate change are emerging as the primary engines of this surge.
Cooling Demand Becomes a Central Challenge
Cooling is set to become the region’s most pressing electricity challenge. By 2035, peak cooling demand will more than double, exceeding 500 TWh—a figure higher than France’s current yearly electricity consumption.
Countries such as Saudi Arabia already see summer electricity loads 50% higher than winter, highlighting cooling as both an energy security and supply reliability risk.
Renewable Energy Auctions Power Expansion
To meet growing demand while driving decarbonisation, many MENA governments have embraced renewable energy auctions, now the dominant method for procuring new projects.
Thirteen out of 17 countries in the region use competitive bidding, with UAE, Egypt, Morocco, and Jordan leading the way.
These auctions have delivered some of the world’s lowest solar PV prices—below USD 20/MWh. However, project execution remains uneven, with Algeria, Iraq, and Tunisia facing persistent delays in converting auction results into operational renewable capacity.
Energy Mix Shifts Away from Oil
Oil-fired generation—once a cornerstone of regional power—is steadily declining, particularly in Iraq and Saudi Arabia, as solar, wind, and nuclear projects scale up.
In North Africa, natural gas’s share of electricity production is set to fall to below 40% by 2035 in the IEA’s Announced Pledges Scenario, driven largely by Egypt’s expanding wind and nuclear fleet.
Grid Infrastructure: The Region’s Critical Weak Point
Despite progress in generation capacity, grids remain the bottleneck.
Transmission networks in the Middle East have expanded by 76% over the past decade, yet new lines often require more than 10 years to complete—far slower than the pace of renewables deployment.
The IEA calls for urgent modernisation through:
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digitalised and automated grid systems
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large-scale energy storage
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accelerated interconnection projects, including the GCC grid upgrade and cross-border links like the Great Sea Interconnector with Europe
Investment Rising but Needs Intensify
Annual power sector investment in MENA is projected to climb from USD 40 billion in 2023 to over USD 60 billion by 2035.
Of this, 85% will be channelled into low-emission technology, transmission networks, and storage solutions. Spending on unabated fossil fuel capacity will fall to just 15%.
Country-Level Shifts
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Saudi Arabia aims for 50% renewables by 2030, supporting its broader industrial diversification strategy.
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UAE targets 32% low-emission power by 2030, anchored by major nuclear additions.
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Morocco aims to become an EV manufacturing hub, leveraging its strong renewables base and signing a USD 1.3 billion gigafactory deal with Gotion High-Tech.
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Lebanon and Yemen demonstrate how decentralised solar PV can sustain essential services when national grids fail.
A Region at an Energy Crossroads
The IEA warns that MENA’s ability to secure its electricity future depends on three urgent priorities:
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Managing soaring cooling-driven demand
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Accelerating renewable deployment beyond auction rounds
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Strengthening grid resilience and cross-border interconnections
Failure to upgrade transmission and distribution networks fast enough could jeopardise the region’s 2030 and 2035 climate and energy commitments.
