An oil-dominated economy, the Middle East is transitioning from barrels to wiring itself for a more sustainable future. With Saudi Arabia pledging $270 billion in renewable energy by 2030 and the UAE’s Energy Strategy aiming to achieve net-zero by 2050, it is evident that the region, long dependent on fossil fuels, is now serving as a template for a clean power infrastructure. But what is the true facilitator of this change?
The answer — the true enabling force of this change is capital-intensive grid infrastructure. A mix of legacy transmission and distribution (T&D) equipment and modern technologies is key to enabling the region’s journey toward a clean energy transition. To keep pace with the region’s economic development, regional grid operators are investing heavily in transforming the entire infrastructure across the electricity value chain.
Read: WHO: Over 666 million people still lack electricity despite global progress
Demand is shifting: What’s driving the grid overhaul?
Grid operators in the Middle East are not only dealing with rising electricity demand but also significant shifts in consumption patterns. This is due to strategic moves by countries like the UAE, KSA, and Qatar to open their doors to global talent and workforce who can contribute to their economic and technological growth. Here are some of the verticals under development in the region that cannot achieve complete transformation without a stable electricity grid.
Mega infrastructure projects
Top-tier, high-investment projects are the key to economic diversification. These projects, which require huge investments worth billions of dollars, aim to elevate the country’s economy beyond its reliance on oil. With the continuous growth of commercial, industrial, and residential hubs, a substantial rise in electricity consumption is inevitable.
Renewables integration
Middle Eastern economies are committed to harnessing their renewable energy potential, driving the need for comprehensive grid transformation to accommodate variable generation, enhance flexibility, and ensure the reliable integration of clean energy sources. With projects like the Mohammed bin Rashid Al Maktoum Solar Park and Al Dhafra solar power project in the pipeline, the Middle East is poised to become a hub for green projects.
The Sakaka plant and the Dumat Al Jandal wind farm are also two of the many solar and wind power schemes in which Saudi Arabia is investing.
The UAE has ambitious initiatives, including a 75 percent renewable energy integration target under the Dubai Clean Energy Strategy 2050 and Abu Dhabi Vision 2030, which aims to incorporate 30 percent renewable energy into the energy mix. Qatar, Oman, Kuwait, and Bahrain have also established ambitious renewable integration targets in their national power grids, aiming to increase the overall proportion of renewable sources in the power mix by 18 percent, 30 percent, 15 percent, and 20 percent, respectively, between 2030 and 2035.
EV infrastructure ramp-up
With electrification taking center stage globally, EV adoption has become a key focus. The leading economies in the Middle East are experiencing a significant expansion of the electric vehicle charging infrastructure market.
In Saudi Arabia, the EVCI market is projected to expand at 62 percent by 2030. Meanwhile, the UAE’s EVCI market is set to grow by 30 percent by 2030. Qatar and Oman also have ambitious goals around EV adoption in the private and public sectors.
Hypergrowth in data centers
The integration of technologies such as AI, 5G, and cloud computing has contributed significantly to digital transformation, but also placed additional strain on the grid. The data centers across the GCC countries are experiencing massive growth, compelling electric utilities to invest in grid modernization by expanding grid capacity and incorporating digital technologies.
Desalination at scale
Electrification is making rounds within the water industry as well. The region is home to 50 percent of the world’s total desalination capacity. The countries in the Middle East are aiming to electrify desalination to achieve their green goals in the water sector. They must upgrade the grid to:
- Power large-scale RO plants sustainably
- Support solar + battery hybrid systems for coastal desalination hubs
- Ensure 24-hour reliability for critical infrastructure
Saudi Arabia’s Saline Water Conversion Corporation (SWCC) and the UAE’s TAQA are aggressively expanding their RO capacity, requiring a stable power supply and sophisticated grid monitoring and control solutions.
Electrification of oil and gas operations
On the global stage, reducing carbon emissions and improving energy efficiency have been long-term goals, with the expectation that all industries will play their part. In the oil and gas industry, conventional fuel-powered drilling rigs, pumps, and other machinery are being replaced with alternatives powered by electricity.
Offshore platforms are also undergoing electrification by obtaining their electricity supply from the shore, rather than relying on in-house gas turbines.
National goals: Vision 2030 and beyond
The strategies across the region have evolved into a multi-layered system, linking renewable integration, consumers, and AI-based control centers, all of which align with national visions that support sustainability and cross-border partnerships.
Infrastructure in transition: Key trends shaping the new grid
While grid transformation is driven by growing electricity demand and shifting strategies around green initiatives, new technological trends also play a pivotal role in supporting this transition. The following are key trends reshaping the way power is generated, transmitted, and distributed.
Grid digitization
Modern grids have multi-faceted, decentralized systems. Digitization offers remote monitoring and real-time control over widely spread grid nodes. Utilities can now monitor their equipment remotely using IoT-based sensors.
Digital twins of the entire physical grid are being developed to simulate the performance of live equipment, and AI is being used to anticipate future outages, helping to reduce downtime.
Local manufacturing push
To support localization and self-sufficiency, economies in the Middle East are implementing policies and regulations that promote the local manufacturing of grid gear, primarily to reduce reliance on imports and support the region’s long-term sustainability goals.
This presents a wide range of opportunities for local T&D equipment OEMs to establish themselves as innovation-driven and capable partners in the global market.
Sustainability regulations
Governments across the region have sustainability goals that tie grid infrastructure to the use of eco-friendly equipment. One major transition underway is the use of SF6-free switchgear, replacing the potent greenhouse gas with cleaner alternatives. Energy efficiency standards for transformers, cables, and control systems are also being strengthened to reduce system losses.
HVDC and Interconnectivity
Regional interconnection projects, such as the GCC Interconnection Authority (GCCIA) and cross-country grid links, including the Saudi-Egypt and Iraq-Jordan grid interconnection links, are driving the countries to modernize their legacy systems, promoting electricity trading among nations and increasing regional reliability.
Significance for industry players
These trends present numerous opportunities for players across the power systems’ value chain. To ensure business success, industry stakeholders must actively engage in:
- Gaining a competitive edge through restructuring business operations
- Build technical partnerships for technological development
- Targeted investments and programs to support localization
Since multiple types of industry players are active in this space, it is important to shed light on how key contributors are impacted and rethink their strategies to stay ahead.
OEMs: From equipment suppliers to strategic enablers
In the environment with strong tailwinds for localization and digitization, OEMs can gain a competitive edge by:
- Investing in local manufacturing capabilities to serve the regional grid with future-proof solutions.
- Expanding their product offering, including digital services and lifecycle support.
- Creating partnerships with leading global companies to roll out cutting edge grid technologies; EPCs to have turn-key solution capabilities; and utilities to gain a better vision of equipment demand and the project pipeline.
- Rolling out eco-friendly products such as SF6-free switchgear and transformers filled with vegetable oils to meet sustainability standards.
EPCs: Building more than infrastructure
The energy market is experiencing an upsurge in grid automation, transmission growth, and interconnection projects. EPCs should:
- Provide tailored, turnkey solutions with shorter lead times.
- Enhance design and engineering capabilities to cater to increasingly complex multi-technology projects.
- Invest in development and upskilling the workforce to meet modern engineering standards and requirements.
- Meet local content regulations by sourcing materials locally, hiring domestic labor, and collaborating with local subcontractors to stimulate economic development and comply with regulatory frameworks.
Utilities: From operators to strategic enablers
Utilities have evolved into digital platform managers rather than traditional grid operators. Here is how they can manage a digital grid ecosystem:
- Fostering strong partnerships with legacy grid equipment OEMs and companies offering digital solutions, utilities can position themselves as strategists.
- Exploring and investing in technologies that help manage distributed energy resources, providing functional reliability and flexibility.
- Strengthening data security frameworks to protect the network against cyber threats.
The grid is the strategy
Sustainability targets and strong pipelines for renewable energy projects would mean nothing without the transmission acting as a strong backbone. EPCs, OEMs, and utilities must roll out products that integrate variable renewables, electrify transport and industry, and enhance energy access, grid capacity, flexibility, and intelligence.
The electricity market in the Middle East presents a pool of opportunities, particularly for industry players who bring innovation, scalability, and resilience to the table.
Hassan Zaheer is managing partner and chief operating officer at PTR Inc.
