MENA's energy transition accelerates with promising renewable projects and emerging green hydrogen industrialisation

The Middle East and North Africa is moving through a pronounced energy transition, with governments and developers shifting capital towards solar, wind and green hydrogen at a pace that would have been difficult to imagine only a few years ago. For a region long defined by oil and gas, the change is not just about climate commitments. It is increasingly about industrial strategy, energy security and the chance to build new export value chains around low-carbon power and molecules.

Momentum is being reinforced by policy. According to the International Energy Forum’s progress report on MENA climate action, 14 countries in the region had set explicit renewable energy targets in their climate plans by 2024, most of them framed as a share of electricity generation. Many are aiming for renewables to supply at least 30% of power by 2030, while others have adopted capacity targets measured in gigawatts. Several governments have also extended their ambitions to 2050, linking clean electricity to net-zero pledges and wider economic diversification.

That policy ambition is being matched by a growing project pipeline. Dii Desert Energy says operational renewable capacity in the region reached 43.7GW by the end of 2025, with total projects in development rising to about 202GW. Solar accounts for the bulk of that pipeline, underlining how quickly utility-scale photovoltaic deployment has become the default option for much of the region.

The economics help explain why. Competitive auctions have pushed prices to levels that remain striking even by global standards. In 2024, utility-scale solar bids came in at roughly $10 to $13 per megawatt-hour, while onshore wind projects were awarded at around $16 to $17 per megawatt-hour. Those numbers reflect abundant irradiation, large project scales, long-term offtake agreements and, crucially, policy frameworks that reduce risk for investors.

Saudi Arabia has emerged as the clearest growth engine. Its renewable capacity almost tripled in a single year to 11.7GW, according to the data cited in the region’s latest project tracking. That expansion is being driven by Vision 2030 and by a pipeline of very large projects designed to cut domestic fuel consumption and free up hydrocarbons for export. The United Arab Emirates remains another centre of gravity, particularly where solar and storage are being combined to provide more reliable output for the grid.

One of the most closely watched developments in the UAE is a 5.2GW solar project paired with 19GWh of battery storage, intended to deliver 1GW of continuous baseload renewable electricity. If delivered as planned, it would mark an important step in the region’s shift from simple generation build-out to system-level decarbonisation, where storage becomes as important as generation itself.

Wind power is growing more slowly, but it is beginning to establish a more meaningful foothold. Operational wind capacity in MENA reached 7.4GW, while another 65GW is under development. Egypt leads the region with more than 3GW installed, followed by Morocco with about 2.4GW. Recent additions in Egypt included the 505MW Amunet wind farm and the 650MW second phase of the Red Sea Wind Energy project. Morocco, meanwhile, completed the 60MW Dakhla desalination wind farm, showing how wind is being tied to both industrial and water-security needs.

Green hydrogen is the other major pillar of the regional energy story. A 2024 assessment by pv magazine said hydrogen projects in MENA had surged to 117 installations, with about 90% classified as green. The region’s appeal is obvious: cheap solar and wind, large areas of available land and governments eager to attract foreign capital into new industrial sectors. The World Economic Forum has also noted that countries including Saudi Arabia, the UAE, Morocco, Oman, Egypt, Israel and Jordan are expected to account for the vast majority of regional renewable growth over the next five years, reinforcing MENA’s ambitions to become a major hydrogen hub.

Yet the gap between announcement and delivery remains wide. Dii Desert Energy says only two pilot hydrogen projects are currently operational in the region, both in the UAE: the DEWA Green Hydrogen Pilot Plant and Masdar’s demonstration project with Emirates Steel. By the end of 2025, only five hydrogen projects had reached financial close and entered construction or early implementation.

The flagship remains Saudi Arabia’s NEOM Green Hydrogen Project, which is reported to be about 80% complete and scheduled for commissioning in the first quarter of 2027. The project combines 4GW of solar and wind power with 2.2GW of electrolyser capacity and is designed to produce about 1.2 million tonnes of green ammonia a year. It has become a reference point for the entire sector, not only because of its scale, but because it tests whether the region can turn extraordinary headline ambition into bankable industrial delivery.

That question matters because hydrogen plans across MENA are still heavily concentrated in a handful of mega-projects. Planned electrolyser capacity is estimated at 200GW to 230GW, but a large share sits within the 17 biggest schemes. Some early concepts have already been downsized to make them more realistic; Mauritania’s Project Megaton Moon, for example, was cut from 35GW to 6GW.

The engineering case for the region is strong. Research published in ScienceDirect suggests Egypt and Saudi Arabia have the highest hydrogen production potential from wind-to-hydrogen systems, while Morocco, Egypt and Iran are especially well placed for photovoltaic-to-hydrogen development. The study also found wind-to-hydrogen systems to be more efficient than photovoltaic-to-hydrogen systems. But technical potential is only part of the equation. Financing, permitting, infrastructure and offtake arrangements are now the real bottlenecks.

For industrial decarbonisation professionals, that distinction is critical. MENA is no longer just a map of promising resources. It is becoming a test bed for the economics of low-carbon industry at scale, where renewable power, storage, hydrogen and derivative products such as ammonia must all be tied together in commercially viable chains. The region’s trajectory is still upward, but the next phase will be judged less by targets than by how quickly concrete projects move from paper to operation.