‘Appreciation of conventional energy is very important for GCC countries, because a lot of our GDP depends on income which is directly or indirectly related to oil and gas,’ said Dr Waddah Ghanem, ENOC Senior Director, Logistics and Marine Assurance. Also Honorary Chair of the Energy Institute’s Middle East Chapter, he referred to the grouping of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).

‘But there is also an appreciation that the energy mix requires renewables, particularly in the UAE and Saudi Arabia, with initiatives in areas like solar, green hydrogen and waste-to-energy.’

Technology advancement in areas such as data management and artificial intelligence (AI) also have an important role to play, along with strengthening the skill base of the indigenous population, he remarked.

Ghanem was presented the Award of Council for Meritorious Service to the Energy Institute, in recognition of his chairmanship of the Middle East branch during the past six years, which has seen the branch move from strength to strength.

Making the presentation, UAE Ambassador to the UK Mansoor Abulhoul said: ‘In the UAE we see our commitment to net zero, which we plan to achieve by 2050, as an opportunity for re-imagining our economy. A new gold rush that can inspire new capabilities and birth new industries. Our message is clear, a rapidly growing economy also means a rapidly growing green economy. Environment, health and safety are only going to become more and more important.’

How is Saudi Arabia developing its renewables sector?  
Saudi Arabia claims to have the most diversified energy mix of GCC countries, with 6 GW of renewable energy, overtaking the UAE last year. Dr Yousef Alshammari, President of the London College of Energy Economics, an affiliate of the Energy Institute, said the kingdom has been going through ‘a transformation’, especially since the announcement of the 2030 Vision (in 2016) under Crown Prince Mohammed bin Salman (see also Box).

‘Historically, the kingdom has been the largest exporter of oil – as a key member of OPEC – maintaining the world’s energy security, which has historically been around oil. But the energy sector is transforming – whether it is gas, hydrogen, renewables or multiple other products.’

He also noted the way gas is penetrating the electricity power generation market, accounting for about 55% of domestic use in the kingdom. Indeed, ‘gas will completely replace oil by 2030, saving 1mn barrels of oil by that date, with a 50:50 mix between gas and renewables’, he claimed.

The first major renewables project, the 300 MW Sakaka solar PV plant developed by ACWA Power under the Nation Renewable Energy Programme, was commissioned in Saudi Arabia in 2020. In 2024, several renewable energy plants were added, including the Shuaibah 2 solar PV plant, the Rabigh 2 solar power project and the Masa’a and Al Henakiyah 2 solar parks, building installed renewable capacity to 6.5 GW.

Notably, about 44 GW of new developments were tendered in 2024, and the target is to create 130 GW renewables capacity by 2030, according to the Crown Prince.

‘Our ambition is to export clean energy from the world’s largest green hydrogen project at Neom, with the benefit of $8.4bn of investment’, explained Alshammari. As well as other initiatives by Saudi Aramco, Sabic and Aqua Power, with a combined capacity of 4 GW of renewable power from onshore solar, wind and storage. The green hydrogen plant is planned for commission in 2026, to produce 600 t/d using Thyssenkrupp technology for electrolysis.

Alshammari was a bit defensive about some renewable energy prospects. ‘The realisation of a hydrogen future looks promising… although I believe that to meet global demand for hydrogen in coming decades we will still have to use hydrocarbons. However, Saudi Arabia is transitioning with a purpose. Not just because the world is going towards cleaner renewable energy, but as part of the economic diversification plan, for value creation, supply chain resilience, and also job creation.’

What’s more, the Public Investment Fund (PIF) sovereign wealth fund (see also Box) is involved in significant initiatives towards the development of voluntary carbon markets. According to a recent statement by the Saudi Investment Minister Khalid A Al-Falih, the energy mix between the non-oil sector and oil is now about 50:50.

How are GCC countries developing their renewables portfolios?  
John Bell, CEO of Gulfsands, sees the Middle East ‘remaining central to the global energy markets’. He is convinced that the region has different drivers from the west. ‘Unlike many western nations where the transition is driven by climate policy, political and philosophical conviction, the energy transition in the Middle East is closely tied to economic diversification, national security and long-term-sustainability goals.’

‘Key players like Saudi Arabia, the UAE and Qatar know that transforming too quickly will destabilise their economies and perhaps risk global markets, price volatility and supply chain risks,’ he suggested.

Session moderator Kate Dourian, Contributing Editor of Middle East Economic Survey (MEES), contrasted the pending closure of the Grangemouth refinery in the UK to the increasing refining capacity in the Middle East – including Kuwait’s Al-Zour, Al-Ahmadi and Mina Abdullah refineries which are expanding petrochemicals production.

Alshammari also recognised the difference in perspective between Europe and the Middle East, and mentioned a statement by the First President of the UAE a couple of years ago, to the effect that: ‘Oil and gas is something we are blessed with… We have to be responsible to the people of the land.’ However, ‘it did not stop him investing good money in energy industries as an NOC [National Oil Company] and renewables, through Masdar, here and round the world to drive the energy transition', added Alshammari.

Alshammari also emphasised the importance of skill-building. He mentioned UAE Prime Minister HH Sheikh Mohammed Bin Rashid Al Makhtoum’s remark: ‘It’s very easy to build physical infrastructure, you just need money. But the most difficult thing is to build people.’ Alshammari added: ‘In a knowledge-based economy with strong capacity and talent. That’s the real focus. Because you’re not going to have an energy transition if you don’t have the people to carry it forward.’

Spotlight on Saudi Arabia's investment in renewable energy

In February, Saudi Arabia launched the 2,000 MWh Bisha project, one of the largest energy storage initiatives in the Middle East and Africa, ensuring backup power availability while enhancing grid resilience and stability. It features 488 advanced battery containers with a total storage capacity of 500 MW for four hours.

 

The kingdom, through its National Renewable Energy Programme led by the Ministry of Energy, aims to achieve a total storage capacity of 48 GWh by 2030. To date, storage projects with a combined capacity of 26 GWh have been tendered and are progressing through various stages of development. The country hopes for renewables to contribute 50% of the country’s total electricity generation by 2030.

 

The Ministry of Energy reports that it aims to bring 8 GWh of energy storage projects online by 2025 and 22 GWh by 2026. These targets would position the kingdom as the world’s third-largest energy storage market, behind China and the US.

 

It also reported that by the end of 2024, total renewable energy capacity across all stages of development had reached 44.1 GW.

 

In remarks at a media event in February, Minister of Energy Prince Abdulaziz bin Salman Al Saud emphasised the need for a holistic understanding of energy. Reflecting on his experience in oil markets, he stated that grasping the concept of energy requires a broad, interdisciplinary perspective. ‘The energy sector cannot be understood through a single book or discipline,’ he said. ‘A true expert must possess knowledge across diverse fields and remain aware of its ever-evolving nature.’

 

The Minister also credited the initiatives of Saudi Arabia Crown Prince and Prime Minister Mohammed bin Salman Al Saud, who is also Chair of the PIF, which manages assets of some $925bn of assets. Last July, PIF signed three contracts with Chinese companies to localise manufacturing of components for wind and solar PV in the kingdom through the wholly-owned Renewable Energy Localization Company (RELC). They also involve Saudi company Vision Industries, which is described as a leading investor and developer of clean energy industrial projects and local supply chains.

 

They are joint ventures with Envision Energy for manufacture and assembly of wind turbine components, including blades, with an estimated annual generation capacity of 4 GW; with Jinko Solar for manufacture of PV cells and modules for high-efficiency solar generation, amounting to 10 GW generation capacity; and with Lumetech SA PTE Ltd, a subsidiary of TCL Zhonghuan Renewable Energy, to localise production of solar PV ingots and wafers with annual production sufficient to generate 20 GW of power. 

At the time, Yazeed Al-Humied, Deputy Governor and Head of MENA Investments at PIF, said that the projects would contribute to localising the production of 75% of the components in Saudi Arabia’s renewable projects by 2030 in line with the Ministry of Energy’s National Renewable Energy Programme.

 

Saudi Arabia’s Bisha energy storage facility, launched in February  
Photo: Saudi Arabia Ministry of Energy

• Further reading: ‘Exploring the challenges of net zero: energy security, LNG markets and Saudi Arabia’s decarbonisation plans’. Despite numerous governments making plans to move to net zero, and climate activists agitating for faster decarbonisation, consumer behaviours are yet to change. In part this is due to obstacles and roadblocks that were not foreseen when the plans were originally implemented but are now being encountered. These include the Russian invasion of Ukraine and the challenges of delivering a multilateral approach. The WPC Energy UK National Committee Expert Workshop 2024 hosted by Deloitte at its London office on 31 October considered these factors and other challenges. 
• Find more about how some of the wealthiest Gulf states, particularly the United Arab Emirates and Saudi Arabia are aggressively scaling up their renewable energy capacity, aiming to position themselves as global leaders in the clean energy transition.