Middle East Energy Transition - Sectors and Companies Driving Development

The Middle Eastern power market is predominantly fueled by fossil energy, but renewables are projected to reach 14% of the generation mix by 2035, driven by climate pressures and diversification goals. Despite this progress, the region lags in areas like energy storage, EV adoption, and renewable fuel production. Key technologies, such as carbon capture, utilization, and storage (CCUS) and hydrogen, are being developed to support decarbonization, with the region aiming to become a global key player in low-carbon hydrogen production.

The Middle Eastern power market remains largely driven by fossil fuels, with leading oil and gas producers like Saudi Arabia, Iraq, the UAE, Iran, and Kuwait. However, renewable energy is poised for significant growth, driven by climate change concerns and diversification strategies, expected to account for 14% of the power generation mix by 2035. Despite this, the region lags globally in energy storage, EV adoption, and renewable fuel production. Key energy transition technologies, including carbon capture, utilization, and storage (CCUS) and hydrogen, are being actively developed. CCUS, leveraging the region's fossil fuel production, is expected to play a critical role in decarbonization, with a projected CAGR of 44% from 2025 to 2030. Green hydrogen capacity is expected to grow rapidly at nearly 150% CAGR between 2025 and 2030, though starting from a low base, and by 2028, it is expected to overtake its blue counterpart.

Key Highlights

• The Middle Eastern power market continues to be dominated by traditional fossil fuels, with gas-based thermal power still providing 71% of the power generation by 2035.
• Renewable technologies are projected to reach a 14% share of the power generation mix by 2035, with solar PV alone accounting for 11%. Abu Dhabi Power Corporation stands out for both its active (5GW) and pipeline (14GW) solar power capacity.
• The region's battery energy storage capacity is set to grow at a CAGR of 16% between 2025 and 2030, a far smaller statistic compared to the expected global CAGR of 51% over the same period.
• Electric vehicle adoption in the region is currently low, but its EV market is set set to grow rapidly over the coming years, driven by government initiatives, consumer interest, and new model introductions.
• The region's CCUS capacity is set to grow at a CAGR of 44% between 2025 and 2030, leveraging its industrial capacity to capture carbon in support of petroleum production and eventually produce large quantities of blue hydrogen, ammonia, and synthetic fuels.
• The region's green hydrogen capacity is currently projected to grow at a significant CAGR of nearly 150% between 2025 and 2030, however, this high growth rate is largely due to its currently low active capacity.
• Green hydrogen capacity is set to overtake blue hydrogen in 2028.

Scope

• Middle Eastern climate targets, CO2 emissions, energy potential, leaders in renewable energy and energy storage, renewable energy policies, power consumption and demand, renewable power capacity and generation, decommissioning of thermal power, energy storage capacity, electric vehicle production, EV population data, upcoming renewable refineries, SAFs, CCUS outlook, upcoming CCS projects, hydrogen policies, upcoming hydrogen capacity by stage, type and end use.

Reasons to Buy

• Assess the current regional emissions, thermal and renewable capacity and generation share, and identify which countries have implemented net-zero targets or are driving the energy transition in the Middle East.
• Assess the renewable energy potential of the Middle East and identify market trends within the industry.
• Identify who the leading countries and regional players are in renewable energy capacity and energy transition technologies such as hydrogen and CCUS.
• Develop market insight of the major technologies currently in use and proposed for the decarbonisation of the region's industries, as well as the policy framework laid out by the region's governments to accelerate their development and increase their adoption.