Data centres in the United Arab Emirates are expected to more than double their electricity consumption to over 6 TWh by 2030, driven by rapid expansion in artificial intelligence (AI) and cloud infrastructure, according to a new analysis by Wood Mackenzie.
The report notes that data centres consumed around 3 TWh in 2025, accounting for approximately 2% of the country’s total electricity demand of 173 TWh. This share is projected to rise significantly as the UAE intensifies its push to become a leading global hub for digital infrastructure and AI investment.
Major technology players are accelerating investments in the region. Microsoft and G42 have launched the $1.5 billion Stargate UAE project, while Amazon Web Services and e& have entered a $1 billion partnership to expand cloud services. Additionally, du has announced a hyperscale data centre project in collaboration with Microsoft.
Despite this growth, regulatory limitations are restricting the ability of operators to procure clean energy directly. The UAE does not currently permit corporate or virtual power purchase agreements (PPAs), limiting data centre operators to rooftop solar installations or renewable energy certificates.
Key constraints include capacity caps under Dubai’s Shams rooftop solar programme and Abu Dhabi’s net-metering framework, alongside fragmented clean energy policies across emirates. Utility-scale renewable procurement remains largely driven by government-led auctions.
The UAE, which has committed to achieving net-zero emissions by 2050, is expanding its clean energy mix, with solar expected to exceed 20% of total generation by 2040, while nuclear power currently contributes around 21%. The country also benefits from strong infrastructure, including 19 international submarine cables connecting Europe, Asia, and Africa.
However, global hyperscalers such as Microsoft, Amazon, and Meta face challenges in aligning their global decarbonisation strategies with the UAE’s regulatory framework, which restricts off-site renewable procurement models widely used in other markets.
Wood Mackenzie has outlined key reforms to address the gap, including enabling corporate PPAs, standardising renewable energy certificate systems, and promoting cleaner alternatives to diesel backup systems such as battery storage and low-carbon fuels.
According to the analysis, addressing these policy barriers could unlock large-scale private investment in renewable energy and support the UAE’s ambition to balance rapid digital growth with long-term sustainability goals.
Discover more from SolarQuarter
Subscribe to get the latest posts sent to your email.
