Paris — Electricity demand across the Middle East and North Africa (MENA) is surging at one of the fastest rates in the world, fuelled largely by rising cooling and desalination needs, according to a new report by the International Energy Agency (IEA). The study warns that governments in the region will need to significantly diversify their power supply in the coming decade to keep pace with consumption growth and reduce reliance on oil.
The report, The Future of Electricity in the Middle East and North Africa, finds that electricity use in the region tripled between 2000 and 2024, driven by population growth, rising incomes, and rapid urbanisation. Based on existing policy measures, consumption is expected to climb by a further 50 per cent by 2035 — the equivalent of adding Germany and Spain’s current demand combined.
Cooling and Desalination Lead Growth Drivers
Extreme heat and widespread water scarcity across much of the region mean that about 40 per cent of the projected increase in demand will come from cooling and desalination alone. Other key factors include industrial expansion, the electrification of transport, and the spread of energy-intensive digital infrastructure such as data centres.
“Demand for electricity is surging across the Middle East and North Africa, driven by the rapidly rising need for air conditioning and water desalination in a heat- and water-stressed region with growing populations and economies,” said IEA Executive Director Fatih Birol. “The region has already seen the third largest growth in electricity consumption globally since the start of the century, after China and India. To meet this demand, power capacity over the next 10 years is set to expand by over 300 gigawatts, the equivalent of three times Saudi Arabia’s current total generation capacity.”
Natural Gas, Renewables and Nuclear to Replace Oil
Currently, natural gas and oil dominate the region’s electricity mix, accounting for more than 90 per cent of total generation. However, many countries, including Saudi Arabia and Iraq, are introducing policies to scale back oil use in power generation, freeing up crude for exports or other higher-value uses.
The IEA projects that natural gas will meet half of the region’s electricity demand growth by 2035, cutting oil’s share of generation to just 5 per cent, down from 20 per cent today. Meanwhile, solar photovoltaic capacity is expected to expand tenfold, lifting renewables’ contribution to around 25 per cent of electricity generation. Nuclear power is also forecast to triple over the same period.
“Based on the policy plans of governments across the Middle East and North Africa, the region is set to steadily shift away from using oil for electricity generation over the next decade, with natural gas, solar and nuclear all expanding,” Dr. Birol said. “This is set to change the power mix considerably, with implications for global energy balances and emissions.”
Investment in Grids and Efficiency
Investment in the region’s power sector reached $44 billion in 2024 and is expected to grow by 50 per cent by 2035. Roughly 40 per cent of this funding will go to upgrading transmission and distribution networks, which currently lose twice as much electricity as the global average. Expanding regional interconnections and modernising grids will be essential to ensuring electricity security, the report concludes.
Energy efficiency improvements also represent a major opportunity to curb demand growth. The IEA notes that air conditioners in the region operate at less than half the efficiency of units in Japan. Upgrading performance standards could cut peak demand growth by an amount equivalent to Iraq’s current installed capacity.
Risks of Slower Diversification
The IEA also modelled a scenario in which diversification targets are not met. In such a case, oil and gas demand for electricity would climb by more than 25 per cent by 2035. That outcome could cost regional economies up to $80 billion in lost oil and gas export revenues, alongside $20 billion in higher import bills.
The report underscores the importance of combining renewable expansion with dispatchable natural gas capacity, energy storage, and demand-side management to ensure reliability as the region’s energy mix shifts.
A Global Energy Market at Stake
With MENA long serving as a cornerstone of global energy supply, changes to its electricity sector are likely to reverberate internationally. The transition away from oil-fired power, coupled with surging investment in renewables, natural gas, and nuclear energy, is expected to reshape trade flows and influence emissions trajectories worldwide.
For policymakers, the IEA says, the coming decade represents a pivotal window to expand infrastructure, improve efficiency, and secure the balance between energy demand and supply in one of the fastest-growing electricity markets globally.
