• Nearly 15 GW of new solar, wind and storage capacity deployed in 2025, moving MENA into an exponential growth phase
• Project pipeline reaches 202 GW across renewables, hydrogen and storage, ahead of prior model scenarios
• Saudi Arabia, UAE and emerging markets in Iraq, Uzbekistan and Azerbaijan gain strategic relevance for Europe and global clean supply chains
The MENA energy transition entered a new phase of scale and competitiveness in 2025, according to the latest Dii Desert Energy outlook unveiled during Abu Dhabi Sustainability Week. The report charts a sharp acceleration in solar, wind and energy storage deployment, with the region adding nearly 15 gigawatts of new capacity in a single year, driven by cost breakthroughs and multi gigawatt pipelines now extending to hydrogen and grid scale batteries.
MENA Starts to Scale at Speed
The World Future Energy Summit provided the stage for Dii Desert Energy to launch its flagship annual report “MENA Energy Outlook 2026” to diplomats, policymakers and investors gathered for Abu Dhabi Sustainability Week. The research builds on the 2025 edition but shows materially faster trends than the previous modelling anticipated, especially in combined solar plus storage systems and grid connected hydrogen hubs.
H.E. Eng. Sharif Al Olama, Undersecretary for Energy and Petroleum Affairs at the UAE Ministry of Energy and Infrastructure, framed the acceleration in terms of policy priorities. “In light of the dual challenges of climate change and energy security, a rapid and sustained scale up of renewable energy is no longer optional. It is essential. The UAE recognized this early, and we have committed to tripling our renewable energy capacity by 2030, strengthening our ambition by increasing the renewable energy target from 14.2 gigawatts to a clear target of more than 22 gigawatts of installed renewable energy capacity, including solar, concentrated solar power, wind and waste to energy within the next five years.”
He added that the data infrastructure behind decisions is becoming as important as the assets themselves. “As we accelerate this transformation, access to reliable, high quality data and forward looking analysis becomes critical to sound policymaking, investment decisions and regional coordination. In this context, the MENA Energy Outlook 2026 provides valuable and timely insights into the trends, risks and opportunities shaping the energy future of our region.”
Markets Drive Breakthrough Pricing
Several executives described 2025 as a turning point for purely market driven deployment. Cornelius Matthes, CEO of Dii Desert Energy, observed that “2025 can be described as a breakthrough year for the energy transformation in the MENA region, with an unprecedented surge in new capacity for both solar PV, wind and BESS, all purely driven by market factors with the lowest prices globally.”
The report details how regional capacity grew from roughly 14 GW in 2020 to 30 GW in 2024, before leaping by nearly 15 GW in just twelve months. Cost curves across the region continue to outcompete fossil assets on new build economics. Saudi Arabia secured global record lows for levelized cost of electricity at 1.09 US cents per kilowatt hour for solar and 1.33 US cents for wind, while battery energy storage systems now achieve capital costs in the USD 73 to 75 per kilowatt hour range.
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UAE and Saudi Arabia Anchor a Wider Pipeline
The UAE consolidated its position as a renewable hub for the region, ranking second with 7.5 GW of operational capacity and advancing a large execution pipeline. Masdar, in partnership with EWEC, has begun construction on a 5.2 GW solar park coupled with 19 GWh of battery storage designed to deliver one gigawatt of baseload clean power. Mohamed Jameel Al Ramahi, CEO of Masdar, said the findings “clearly show that the region has reached a decisive inflection point. The acceleration of renewable energy deployment now underway demonstrates the potential of renewables to outperform conventional energy on cost, speed of deployment, resilience and returns. This reinforces MENA’s position as global leader in delivering affordable, scalable clean energy, while supporting energy security and long term economic growth.”
Saudi Arabia’s cost leadership has pulled capital into a wider pipeline as the overall regional project slate reached 202 GW, well above the 165 GW “balanced transition” scenario modelled in the 2025 edition. Hydrogen is moving at a more measured pace but the report finds visible execution. The NEOM Green Hydrogen project is 80 percent complete and the Yanbu Green Hydrogen Hub, developed with Germany’s EnBW, anchors new industrial and geopolitical links between the Gulf and Europe.
New Entrants and Regional Connectors
Iraq is emerging as a gigawatt scale market with a target of 12 GW by 2030 and multiple projects now in construction. Central Asia is catching up, with Uzbekistan and Azerbaijan positioning themselves as strategic nodes for east west connectors through the Caspian Sea into the European Union.
Growing storage deployment, hydrogen hubs and cross border transmission plans collectively shift the region from isolated national markets to a more interconnected clean energy system that could serve Europe, Africa and South Asia.
Implications for Investors and Policymakers
For institutional investors, the report highlights falling risk premiums on renewables in Gulf markets, maturing procurement frameworks, and attractive LCOE benchmarks that compare competitively against fossil alternatives. For governments, the findings reinforce the need for grid planning, storage standards and stable offtake structures to integrate multi gigawatt solar parks and hydrogen hubs.
The report closes on the global stakes of the shift. If MENA maintains its current trajectory, the region could become one of the most significant providers of low cost clean energy, hydrogen and storage technologies by 2030, with consequences for energy security, industrial policy and climate pathways across Europe and Asia.
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