The Middle East set new records for energy demand and emissions in 2024, according to the Energy Institute’s Statistical Review of World Energy, co-authored by KPMG and Kearney. But solar powered generation is on the rise and is growing at a rapid pace across the Gulf Cooperation Council (GCC) states with Saudi Arabia registering the largest additions.
Oil and gas dominated the region’s energy mix, supplying 97 percent of a record 41 exajoules (EJ) in energy demand — about 7 percent of global consumption.
Despite a slight dip in oil production to 30.1 m b/d, largely because of OPEC+ output curbs, the Middle East still accounted for nearly a third of global output. Energy-related CO2 emissions rose by 2.5 percent to 3 billion mt, the highest on record.
Iraq saw the largest increase in CO2 equivalent emissions from energy, process emissions, methane and flaring, which were up by 19 percent on the year in 2024. Surprisingly, emissions rose by 4.6 percent in the UAE, which prides itself on having a diversified energy mix, including solar and nuclear.
Rise of renewable energy
Yet amid these carbon highs, there has been a noticeable shift to cleaner energy. Renewables, led overwhelmingly by solar, reached a record 5 percent share of electricity generation.
Solar power alone grew by 23 percent year-on-year and has averaged 43 percent growth annually over the past decade. Saudi Arabia saw the most dramatic growth, nearly doubling its solar capacity from 2,585MW in 2023 to 4,340MW in 2024 — a 67.9 percent increase.
The data indicates consistent capacity additions across smaller phases, with a sharp ramp-up in 2023 and 2024. This signals the country’s accelerating push to diversify its energy mix through large-scale solar deployment, mainly photovoltaic.
The UAE increased its solar capacity from 5,942MW to 6,011MW, a modest 1.2 percent growth. This suggests that the UAE may be entering a consolidation phase after rapid buildout in previous years, although it still maintains one of the highest solar capacities in the region.
Notably, 46.7 percent of its 2024 solar capacity was added since 2020. New capacity additions in 2024 in Saudi Arabia and the UAE are not included in the review and the numbers will be much higher with the kingdom on track to overtake the UAE as the GCC’s leading renewables player this year. By the end of the year, renewables could be displacing more than 150,000 b/d of oil from Saudi Arabia’s power sector.
The bulk of last year’s renewables growth in Saudi Arabia came online towards the end of the year — the 2.66GW Shuaibah complex was connected to the grid in the fourth quarter and the kingdom is on track to add another 6.16GW of capacity this year, bringing total installed capacity to 12.7GW.
This will put Saudi Arabia well ahead of the UAE, which generated a record 13.5TWh last year. UAE capacity is also climbing, with Dubai having added 800MW at its MBR solar plant this year but at 6.6GW currently, its installed capacity will exit the year well below Saudi levels. Other Middle Eastern countries (excluding Saudi Arabia and the UAE) expanded their solar capacity by 1,196MW, growing from 3,819MW in 2023 to 5,015MW in 2024 — a 31.3 percent increase.
Electricity demand also surged 5.3 percent to 1,569 terawatt-hours, with 10 percent of the increase met by renewables — another small but notable shift.
Growing energy demand
Globally, energy demand reached a record 592 EJ in 2024, with emissions hitting new highs for the fourth straight year. Although wind and solar grew rapidly —up 16 percent and nearly nine times faster than overall demand — they were still outpaced by the growth in fossil fuel consumption, which met 60 percent of new energy needs. However, as renewables replace natural gas and liquid fuels in power generation, oil demand in the region is expected to decline.
The International Energy Agency (IEA), which sees overall oil demand globally declining and peaking by 2030, notes that oil-for-power generation demand is expected to fall sharply in the Middle East, where Saudi Arabia alone is aiming to displace 1 million b/d by 2030.
Global oil markets are undergoing a fundamental transformation with demand slowing to a trickle from 2028 onwards before entering a slight decline in 2030, the IEA says. Although the headline global demand figures are largely unchanged, on a more granular level there have been substantial shifts.
In the US for instance, the Trump administration is rolling back a number of Biden-era environmental policies, and where gasoline consumption was last year expected to decline by 1.6m b/d by 2030, the drop has now been revised down to 790,000 b/d.
The flip side of this is a huge downwards revision in China’s demand expectations for 2030; by 1.4m b/d from 18.1m b/d last year to 16.7m b/d in the latest report. This was driven in large part by faster than previously forecast EV penetration.
With the IEA also forecasting strong non-OPEC+ supply growth out to 2028, the report points to further reductions in OPEC+ market share in the years ahead; despite OPEC+ currently accelerating the easing of its production cuts. Although the IEA sees OPEC+ production growing slightly over the forecast period, a number of the more fragile members of the alliance are at risk of further capacity declines.
Yet the IEA and OPEC have become more polarized in their oil market outlooks. While the IEA sees global demand peaking this decade, OPEC’s projections have it continuing to grow out to at least 2050, when it hits 120.1m b/d — nearly 15m b/d higher than the IEA’s expected peak.
OPEC’s position is essentially that strong population growth coupled with economic growth in developing countries will lead to a surge in energy demand in the years to come, with demand for all sources of energy, including oil, rising.
While solar energy growth in the Middle East is encouraging, fossil fuels still dominate though there appears to be a wide gap between the IEA and OPEC as to what percentage oil and other fossil fuels will have in the decades ahead. What is clear is that without faster and broader deployment of renewables — and practical strategies that balance security, affordability, and decarbonization — the region risks falling behind in the global energy transition.
