IEA’s Outlook for MENA Electricity

The International Energy Agency (IEA) recently released its report The Future of Electricity in the Middle East and North Africa, projecting that electricity demand across the region will rise by nearly 50 per cent by 2035. For Oman, the findings present both challenges and opportunities. Rising consumption, driven by urban growth, industry and cooling needs, will require major investment in new capacity. At the same time, the Sultanate of Oman has the resources and policy frameworks to become a regional leader in renewable power.

The IEA highlights that between 2000 and 2024, electricity consumption in MENA tripled, reflecting how quickly demand is accelerating. Looking ahead, almost 40 per cent of the projected growth will come from two essential services — air conditioning and desalination. For Oman, where cooling is vital and desalination provides the bulk of potable water, this link between electricity and daily survival could define the nation’s energy future.

Today, more than 90 per cent of MENA’s electricity is generated from oil and gas. The IEA notes that oil-fired generation is set to decline, while natural gas and renewables expand. For Oman, this raises a strategic question: whether to continue burning gas for domestic power or to prioritise its use for exports and industry, meeting more of the domestic demand with solar and wind.

The report foresees solar PV capacity in MENA increasing around ten-fold by 2035 under current policies, with renewables expected to supply about a quarter of the region’s electricity generation. Oman is well positioned to capture this growth. With some of the highest solar irradiance levels in the world, it has already advanced large projects such as the Manah and Ibri solar plants. These developments show how Oman can shift from dependence on hydrocarbons to leadership in renewables and perhaps even supply power across borders in the future.

But the transition is not only about generation. The IEA warns that future grids must be more flexible and resilient, able to handle variable renewable supply and heavy summer peaks. For Oman, this means upgrading transmission networks, investing in energy storage and promoting demand-side efficiency. The Authority for Public Services Regulation’s push for rooftop solar is a step forward, but larger reforms — smart grids, regional interconnections and flexible back-up systems — will be needed to secure reliability.

Efficiency is a crucial tool. More efficient cooling systems, stricter building standards and public awareness could cut peak demand and reduce the need for costly new capacity. As the IEA emphasises, every megawatt saved through efficiency is as valuable as a megawatt generated.

Financing is another challenge. Oman’s Independent Power Producer model has already attracted international partners to solar development, but sustained investment will be required to keep pace with demand. Stable regulation and long-term policy signals will be critical for mobilising further capital.

Oman has pledged to generate 30 per cent of its electricity from renewables by 2030, on a path to achieving net-zero emissions by 2050. The IEA’s outlook reinforces the urgency of these goals. Rising demand is inevitable, but how that demand is met remains a choice. By scaling up renewables, modernising its grid and pursuing efficiency, Oman can turn the challenge of surging power consumption into an opportunity for economic resilience and climate leadership. These themes will also shape conversations at the upcoming IEEE PowerTalks 2025 in Muscat this October, where regional experts will debate how best to navigate the electricity transition.