Gulf Energy Transition Through Renewable Energy Development

Abstract

The economies of Gulf Cooperation Council (GCC) countries are primarily dependent on hydrocarbons, which account for 22% of global oil production and 10% of global gas production. The region holds approximately 30% of the world’s oil reserves and 21% of its gas reserves. To ensure sustainable economic growth, GCC nations must reduce their reliance on hydrocarbon revenues by diversifying their economies. This can be achieved through the careful development of non-hydrocarbon sectors and the implementation of energy transition strategies that include renewable and clean energy technologies and zero-emission targets.

The six GCC countries have established ambitious goals to increase the share of renewable energy in their energy mix by 2030 and to achieve net-zero emissions by 2050 and beyond. As of October 2025, despite having invested over $37.7 billion in approximately 62.9 GW of renewable energy projects, they are still in the early stages of meeting their 2030 renewable energy target of nearly 165 GW capacity, which is estimated to require an additional investment of $60.7 billion.

This paper evaluates the progress of renewable energy development in the GCC countries, which currently have more than 100 projects at various stages of development. It examines the economic, financial, technical, and regulatory challenges that the sector faces and assesses their impact on overall energy transition strategies. The analysis focuses specifically on the Saudi Arabian market, which aims to achieve 50% renewable energy by 2030. It highlights the number and scale of projects underway, including 52 projects in solar photovoltaic (PV) and wind technologies. Additionally, the paper provides an in-depth examination of 30 solar PV projects already awarded in Saudi Arabia, discussing key project factors, including project size, capital costs, and the levelized cost of electricity.

The paper emphasizes the main challenges in achieving the energy mix targets set for 2030. It suggests several mitigation measures to improve the efficiency and speed of deploying the remaining 100 GW needed by the GCC over the next five years, which will require an estimated capital investment of approximately $60.7 billion. The paper concludes by recommending actions to standardize the deployment process and ensure the smooth, consistent implementation of significant renewable energy capacity on an annual basis through 2030.

Keywords: Economic Diversification, Renewable Energy, GCC Countries, Energy Transition

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