The Middle East and North Africa (MENA) region stands at a decisive point in shaping its electricity future, according to the International Energy Agency’s (IEA) Future of Electricity in MENA report. Electricity demand is projected to soar by 50% by 2035, driven by rapid population growth, economic expansion, and climate change-induced cooling needs .
Surging Demand from Cooling
By 2035, peak electricity demand from cooling alone is expected to more than double to over 500 TWh, surpassing France’s annual electricity consumption . Saudi Arabia already records summer peak loads 50% higher than winter demand, making cooling one of the region’s top electricity security risks.
Renewable Push through Auctions
Governments have turned to competitive renewable energy auctions, now the primary tool for project procurement. Thirteen of 17 MENA nations use them, with UAE, Jordan, Egypt, and Morocco pioneering adoption. While auctions have unlocked record-low solar PV prices (below USD 20/MWh), challenges remain in project commissioning, especially in Algeria, Iraq, and Tunisia .
Shifting Energy Mix
The region is witnessing a clear decline in oil-fired generation, particularly in Iraq and Saudi Arabia, replaced by solar PV, wind, and nuclear. In North Africa, gas’s dominance is expected to shrink below 40% of power generation by 2035 under the IEA’s Announced Pledges Scenario (APS), as Egypt ramps up wind and nuclear capacity .
Grids: The Achilles’ Heel
Grid expansion lags behind renewable deployment. Transmission lines in the Middle East grew 76% over the last decade, but new projects take over 10 years, creating risks of bottlenecks. The IEA stresses the urgent need for digitalisation, smart grids, and interconnections such as the GCC grid expansion and EU-linked projects like the Great Sea Interconnector .
Investment Outlook
Power sector investment in MENA is set to rise from USD 40 billion in 2023 to over USD 60 billion by 2035. Low-emission technologies, grids, and storage will account for 85% of new spending, while unabated fossil fuels shrink to 15% .
Country Highlights
Saudi Arabia targets 50% renewables by 2030, aligning with industrial diversification goals .
UAE aims for 32% low-emission generation by 2030, bolstered by nuclear.
Morocco is leveraging its renewables and phosphate reserves to position as an EV manufacturing hub, signing a USD 1.3bn gigafactory deal with Gotion High-Tech .
Yemen and Lebanon showcase how decentralised solar PV can step in where national grids collapse .
MENA’s electricity future hinges on managing surging cooling-driven demand, accelerating renewable projects beyond auctions, and urgently upgrading transmission and distribution networks. Without grid resilience and regional interconnections, the region risks falling short of its 2030 and 2035 pledges.
