MENA's rapid electricity growth sparks shift towards renewables and energy efficiency

Electricity consumption in the Middle East and North Africa—sometimes called MENA—has seen a huge boost over recent decades, with demand tripling since around 2000. And honestly, this upward trend doesn’t seem to be slowing down anytime soon. The International Energy Agency, or IEA, predicts that by 2035, the region’s electricity needs will increase by another 50 percent. This shift in the energy landscape really mirrors broader economic and demographic changes happening across the region, plus the increasing need to diversify sources of power because of climate issues and resource constraints.

According to the IEA’s detailed report, The Future of Electricity in the Middle East and North Africa, rising populations and incomes have been primarily responsible for this surge in power demand. In fact, the consumption levels now even rival those of high-power-consuming countries like Germany and Spain combined. This rapid growth isn’t just about more people; it’s also driven by faster urbanisation, industrial expansion, and the development of digital infrastructure—think data centres—that are fueling economic progress.

One thing that really stands out about this demand growth is how closely it’s tied to the region’s climate realities. It’s estimated that around 40 percent of the expected increase in electricity use over the next ten years will come from cooling needs and water desalination. Air conditioning, in particular, is a massive contributor—making up nearly half of peak electricity demand and roughly a quarter of overall yearly consumption. Given that MENA faces extreme heat and widespread water shortages, these factors are crucial in shaping future energy policies.

Right now, fossil fuels dominate the energy mix across MENA—natural gas and oil together make up over 90 percent of power generation. Yet, the IEA notes a pretty big policy shift is underway. Countries like Saudi Arabia and Iraq are trying to cut back on oil’s role in electricity production, aiming to keep that resource for higher-value uses or export markets instead. This shift also predicts natural gas will meet about half of the added electricity demand up to 2035, dropping oil-fired power from 20 percent now down to just 5 percent.

This transition also includes a big push toward renewable energy and nuclear power. Solar photovoltaic (PV) capacity, for example, is expected to grow tenfold by 2035, helping renewables make up roughly a quarter of electricity generation. At the same time, nuclear power capacity is projected to triple, driven by significant investments and strategic efforts to diversify the energy sources. The IEA emphasizes that these changes will reshape the region’s energy scene, with notable impacts on global energy markets and emissions levels.

Investment in power infrastructure is ramping up quickly too. In 2024 alone, the MENA region spent around $44 billion on electricity systems, and this figure is expected to increase by about 50 percent through 2035. A key focus here is upgrading the grid—modernising and expanding it—to reduce high transmission and distribution losses, which are currently double the global average. This will also support regional electricity security by encouraging better interconnections. The IEA cautions that a balanced approach to adding renewables, including deploying energy storage and demand management, will be essential—especially because solar and wind power are inherently variable. Having enough dispatchable natural gas capacity becomes crucial in managing these fluctuations.

Energy efficiency is definitely part of the future picture too. The report points out there’s still a lot of room for improvement, especially with cooling devices. For example, the average efficiency of air conditioners in many MENA countries is less than half that of those in Japan. Improving air conditioning efficiency could dramatically cut peak demand—potentially equivalent to Iraq’s entire electricity capacity. Better efficiency isn’t just about saving energy; it’s about managing demand and reducing strain on the grid during critical times.

The report also warns about what might happen if this rapid diversification slows down. If progress stalls, reliance on fossil fuels—particularly oil and gas—for power could increase by more than 25 percent by 2035. That scenario wouldn’t just mean higher greenhouse emissions but could also cause a major economic hit—like losing about $80 billion in export revenues, with an additional $20 billion in extra import costs. It’s a reminder of how much policies today can impact the future.

Looking at recent trends in 2023, energy demand growth slowed a bit—down to about 2 percent from 3.3 percent in 2022—mainly because economic activity was weaker. Still, the IEA expects a rebound, with growth reaching roughly 3 percent between 2024 and 2026. During this period, the share of fossil fuels in electricity generation is expected to dip slightly—from 93 percent in 2023 to around 90 percent by 2026—while low-emission sources like renewables and nuclear will see modest growth from 7 to 10 percent. Interestingly enough, nuclear power saw a big jump in 2023—up by about 50 percent—and continued growth in that area is expected.

Given the importance of MENA to the global energy system, these changes in its electricity sector are quite significant. Moving toward cleaner, more varied power sources is not only necessary to meet rising demand sustainably but also to support economic resilience. As Fatih Birol, the IEA’s Executive Director, puts it, the region’s goal to add over 300 gigawatts of capacity—more than tripling Saudi Arabia’s current generation—shows both the scale of the challenge and how transformative these energy transitions can be.

For those involved in climate tech and renewable projects, especially in the UAE and neighboring countries, this report spells both opportunities and critical needs. Upgrading grids, investing in renewables, and improving energy efficiency will definitely be key to building a sustainable electricity future. Of course, smart policy reforms will also be essential to balancing rising demand with emission reductions and economic diversification goals.

In sum, with climate resilience and energy security more important than ever, the transformation underway in MENA’s electricity sector really acts as a kind of barometer for global energy transition efforts. The IEA’s findings highlight just how urgent and large-scale these challenges are, but they also show pathways to a more sustainable, secure energy future—if we act wisely now.

Source: Noah Wire Services