Battery energy storage (BESS) is booming in the Middle East and North Africa (MENA) region. According to the International Energy Agency's (IEA) report "The Future of Electricity in the Middle East and North Africa", MENA's BESS capacity increased tenfold by nearly one gigawatt (GW) in only one year (2023 to 2024).
This increase is due to a global decline in BESS costs and rapid renewable energy growth in the region. The report states that population growth, urbanization and economic development are drivers for the rapidly rising electricity demand in MENA, with cooling and desalination applications adding pressure to the grid during periods of peak demand. With demand projected to grow by 50% by 2035, MENA countries aim to promote flexibility solutions to support smooth management of supply and demand and grid balance — therefore, BESS is the preferred solution.
On the other hand, MENA is on the forefront of becoming a global hub for green hydrogen and its derivatives, due to a favorable mix of a large-scale dominated renewable energy landscape, and high land and solar availability. Several countries like Saudi Arabia, Oman and the UAE have set clear production targets and strategies to decarbonize their own economies and deliver green hydrogen to key markets like Europe.
The MENA region is witnessing rapid growth in battery energy storage, as governments scale up solar and wind capacity. The market is strengthened by policy shifts favoring flexibility solutions, national hydrogen strategies and rising interest from utilities in hybrid renewable-plus storage power plants. Saudi Arabia positioned itself as the region´s leader in BESS applications and launched one of the world’s largest storage procurement processes for 8 gigawatt-hours (GWh) of BESS by the end of 2024. Green hydrogen trade is also developing quickly in MENA: According to market intelligence provider S&P Global, 67 “low-carbon or renewable hydrogen and ammonia projects” with a combined production capacity of 9 million metric tons (mt) per year are developed.
BESS offers strong value for MENA power systems by stabilizing grids, reducing reliance on fossil-fuel peaking plants and improving the economics of renewable energy. For emerging green-hydrogen hubs, storage ensures reliable power for electrolyzers and maximizes renewable utilization. Yet challenges persist: high capital costs, regulatory uncertainty and limited grid infrastructure can slow deployment. Subsidized electricity prices complicate business models, and local manufacturing is still at an early stage. Clear procurement frameworks and improved bankability will be critical. High production costs, water constraints, and uncertain international demand remain key challenges to scaling green hydrogen in the MENA region.