As artificial intelligence reshapes economies across the Middle East, electricity systems are being tested in unprecedented ways. Meeting soaring demand while advancing net-zero ambitions will depend on co-ordinated planning, low-carbon power and future-ready city infrastructure delivered at speed.
Across the Middle East, the energy transition has moved decisively from aspiration to execution. Governments are no longer focused solely on distant targets, but on how to translate national strategies into infrastructure and cities that can sustain growth, attract investment and support increasingly digital economies.
The UAE has set out a pathway to triple clean energy capacity by 2030, alongside a formal Net Zero 2050 Action Plan designed to align policy, investment and delivery. Saudi Arabia, through the Saudi Green Initiative, has committed to net zero by 2060, with plans to generate half of its electricity from renewables by 2030 while scaling hydrogen and carbon management. Across the region, these commitments reflect a shared understanding: decarbonisation must progress alongside development, not at its expense.
Delivering both simultaneously is becoming more complex. Electricity demand is rising rapidly at the same time as power systems are being asked to become cleaner, more resilient and more flexible.
The International Energy Agency estimates that electricity demand across the Middle East and North Africa will increase by around 50 per cent by 2035. In Saudi Arabia, peak demand has grown by more than 60 per cent since 2010, driven largely by industrial expansion and cooling needs. In the UAE, peak load has already surpassed 16 gigawatts and is forecast to rise sharply as electrification and digital infrastructure accelerate.
These trends are structural rather than cyclical. Electrification of transport and industry, expanding desalination capacity and rising cooling demand linked to urbanisation and climate conditions are reshaping load profiles across national grids. Overlaying this is the rapid growth of digital infrastructure, introducing a fundamentally different type of electricity demand.
Data centres and AI-driven platforms are now central to economic competitiveness strategies across the Gulf. Global data centre electricity consumption reached about 415 terawatt hours in 2024 and could approach 945 terawatt hours by 2030, largely driven by AI workloads. Individual hyperscale facilities often require between 50 and 150 megawatts of continuous power, while large AI campuses can exceed 200 megawatts as they scale.
The ambition of the region is clear. Abu Dhabi’s planned Aion Sentia AI city, expected to launch in 2027, will be anchored by a 5-gigawatt data centre complex spanning more than 25 square kilometres, among the largest AI-focused developments globally. Unlike traditional industrial or residential loads, these facilities operate continuously, demand extremely high-power quality and can increase consumption in large increments over short periods.
For electricity systems, this fundamentally changes the planning equation. Installed capacity alone is no longer sufficient. Connection timelines, system strength, redundancy and operational flexibility become just as critical. As renewable penetration increases, maintaining stability becomes more challenging, particularly as inverter-based generation alters system inertia and fault response.
Oman illustrates this dynamic clearly. As renewable capacity expands in line with national targets, the grid must also absorb growing demand from industry, desalination and digital investment. Integrating clean generation without compromising reliability requires careful sequencing of grid upgrades, storage solutions and firm capacity. It also calls for policies that enable phased and modular delivery – not only of energy infrastructure, but of AI assets and the cities that support them.
This is where long-term, system-led planning becomes essential. Infrastructure must be designed to scale with demand while retaining agility to adjust as growth trajectories evolve. When generation, grids and demand are planned in isolation, the result is higher costs, delivery risk and missed opportunities. When they are co-ordinated, systems can remain reliable, investable and adaptable.
There are lessons to be drawn from jurisdictions that have already navigated this transition. In Ontario, Canada, coal once accounted for about a quarter of electricity generation. Over a decade, the province completed one of the world’s largest coal phase-outs, achieving a power mix that is now more than 90 per cent zero-carbon. Crucially, this was done while maintaining reliability and supporting economic growth, anchored by firm low-carbon generation alongside hydro and renewables.
That experience underscores an increasingly relevant point: as electricity demand becomes more continuous and mission-critical, particularly for AI and digital infrastructure, power systems benefit from firm, round-the-clock low-carbon generation to complement variable renewables. Nuclear energy, alongside storage and grid modernisation, is therefore re-emerging in long-term planning discussions across a number of regions.
The challenge facing Middle Eastern governments is not a lack of ambition, capital or policy intent. It is one of co-ordination, timing and execution. Energy systems, digital infrastructure and urban development must be planned together, not sequentially. Future-ready cities will depend as much on resilient power systems as they do on data, talent and investment.
The Middle East is well positioned to lead the next phase of the global energy transition not only by installking clean power at scale, but by demonstrating how fast-growing, digitally enabled cities can be powered reliably, sustainably and competitively. The decisions made today about grids, firm capacity and system flexibility will shape the region’s economic resilience for decades to come.
