{"id":106049,"date":"2026-02-25T00:00:00","date_gmt":"2026-02-25T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2026\/02\/25\/how-data-centers-can-lead-renewable-energy-growth-in-mena\/"},"modified":"2026-02-25T00:00:00","modified_gmt":"2026-02-25T00:00:00","slug":"how-data-centers-can-lead-renewable-energy-growth-in-mena","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2026\/02\/25\/how-data-centers-can-lead-renewable-energy-growth-in-mena\/","title":{"rendered":"How data centers can lead renewable energy growth in MENA"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> <strong>The Middle East is emerging as a major player in the global AI race as an answer to how<\/strong><strong> to power AI at (green) scale<\/strong>, according to a DII <a target=\"_blank\" href=\"https:\/\/ent.news\/2026\/2\/1389.pdf\" style=\"\">report (pdf)<\/a>. While traditional tech hubs in the US and Europe are stalling due to grid congestion and decade-long permitting delays, the region is offering up a rare trifecta: Ultra-low-cost renewables, massive land banks, and a demonstrated ability to build at a speed Western markets can no longer match.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Data centers as Super Offtakers:<\/strong> In the old model, data centers were a real estate play. In the new MENA model, they are the anchor tenants for the energy transition. By locking in giga-scale power purchase agreements, hyperscalers like Microsoft and G42 are providing the long-term revenue certainty needed to make multi-bn-USD solar, wind, and hydrogen projects bankable. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Why it matters:<\/strong> In traditional hubs, grid congestion has led to moratoriums on new data centers. The Middle East is offering the \"unmatched speed\" that those hubs lack, using its lowest-cost solar and wind as a \"new green currency\" to attract energy-intensive AI workloads. Saudi Arabia\u2019s rapid rollout of giga\u2011scale projects last year is a clear example of how quickly the region can move, DII director of research Chiara Aruffo tells EnterpriseAM.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The region\u2019s competitive advantage begins with cost, offering some of the world\u2019s <\/strong><strong>lowest-cost solar and wind<\/strong>, and forming what the report calls a \u201cnew green currency\u201d for attracting energy\u2011intensive industries. This is reinforced by the rapid development of green hydrogen hubs like Neom and Yanbu, where renewable power is being deployed at a giga\u2011scale. These hubs are not only producing clean fuels but also creating ideal zones for co\u2011locating data centers that require 24\/7 clean energy.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Data centers can also help move green hydrogen forward.<\/strong> There\u2019s a lot of debate around why green hydrogen isn\u2019t scaling faster, and a big part of the challenge is finding single offtakers willing to commit to pure green hydrogen. But if you cluster multiple industries together and anchor them with a shared hub for renewables and hydrogen, you create an ecosystem that supports itself, Aruffo said.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<p class=\"tag-border-left\">Saudi Arabia is already laying the groundwork<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Saudi Arabia <\/strong><strong><a target=\"_blank\" href=\"https:\/\/asharqbusiness.com\/technology\/118612\/%D8%AA%D8%AE%D8%B2%D9%8A%D9%86-%D8%A7%D9%84%D8%B7%D8%A7%D9%82%D8%A9-%D8%A7%D9%84%D8%B4%D9%85%D8%B3%D9%8A%D8%A9-%D8%A3%D8%B3%D8%A7%D8%B3%D9%8A-%D9%84%D9%85%D8%B3%D8%AA%D9%82%D8%A8%D9%84-%D9%85%D8%B1%D8%A7%D9%83%D8%B2-%D8%A7%D9%84%D8%A8%D9%8A%D8%A7%D9%86%D8%A7%D8%AA-%D8%A7%D9%84%D8%B3%D8%B9%D9%88%D8%AF%D9%8A%D8%A9\/\" style=\"\">is expected to lean heavily<\/a><\/strong><strong> on renewable energy to quell data center <\/strong><strong>demand.<\/strong> As the Kingdom pushes to become a regional hub for AI and cloud computing, operators could pivot toward integrated solar-and-battery solutions to manage the costly and massive power demands of data centers.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<p class=\"tag-border-left\">Ushering in operational reliability and cost management. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Solar energy-charged batteries could cover up to 99.5% of the basic demand required to<\/strong><strong> power data centers<\/strong> at a cost of USD 70 mWh. By integrating large-scale battery energy storage systems (BESS), data center operators can mitigate the typical intermittency of solar power \u2014 locking down a steady energy flow during times of peak demand or nighttime hours.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>REMEMBER-<\/strong> BESS capacity is <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/ksa\/2025\/03\/03\/saudi-arabias-renewable-energy-capacity-to-double-by-year-end\/\" style=\"\">expected to reach 8 GWh<\/a> \u2014 four times the current capacity \u2014 by year-end, with the Kingdom targeting 48 GWh by 2030. Ramping up investments in BESS is necessary to maintain grid stability due to the intermittency of renewable energy supply, which relies on external sources such as solar or wind.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Solar energy stands out as the cheapest source of electricity in Saudi Arabia<\/strong> at some USD 15 mWh, according to Bloomberg NEF estimates. The integration of solar-powered battery storage systems to operate data centers could help create a more balanced capital equation where the operations offset the costs.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>IN CONTEXT- <\/strong>Saudi Arabia\u2019s National Renewable Energy Program (NREP) <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/ksa\/2025\/07\/17\/taking-stock-of-the-national-renewable-energy-program\/\" style=\"\">aims to generate<\/a><a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/ksa\/2025\/07\/17\/taking-stock-of-the-national-renewable-energy-program\/\" style=\"\">50%<\/a> of its electricity from renewables by decade\u2019s end under the Kingdom\u2019s Vision 2030 to diversify the energy mix.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<p class=\"tag-border-left\">Background<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Saudi Arabia dished out contracts for 20.2 GW of renewable energy capacity in 2025. <\/strong>The Kingdom awarded 15 GW renewable project power contracts to an Acwa-led consortium <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/ksa\/2025\/07\/14\/acwa-power-consortium-lands-over-sar-30-bn-of-power-purchase-agreements-for-solar-wind-projects-from-sppc\" style=\"\">in July<\/a>, in addition to 4.5 GW in contracts <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/ksa\/2025\/10\/29\/principal-buyer-awards-4-5-gw-of-renewable-energy-projects-valued-at-over-sar-9-bn\/\" style=\"\">snapped up<\/a> by the UAE\u2019s Masdar, Samtah, and Al Sefan in October.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Already in motion:<\/strong> Acwa <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/ksa\/2025\/08\/21\/acwa-power-connects-2-8-gw-of-clean-energy-to-the-grid\/\" style=\"\">kicked off<\/a> commercial operations for some 2.8 GW of solar energy from three of its projects in Saudi Arabia last August, as well as at its <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/ksa\/2025\/07\/24\/acwas-saad-2-solar-plant-begins-partial-production\/\" style=\"\">Saad 2 PV project<\/a> in Riyadh.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<p class=\"tag-border-left\">Centralization for the W<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Dual ownership structures in Middle Eastern sovereign wealth funds like PIF create a <\/strong><strong>major advantage for large\u2011scale energy and infrastructure projects<\/strong>, Aruffo adds. Unlike the US, where government, regulators, and developers operate as separate and often disconnected entities, the Middle East benefits from a vertically integrated model. Sovereign wealth funds are government\u2011owned and frequently own the developers as well.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>This centralized governance model gives the region a competitive edge in delivering <\/strong><strong>mega\u2011projects at spee<\/strong>d, reducing bureaucratic friction for strategic investors and enabling faster project execution. For hyperscalers evaluating global locations, this level of administrative efficiency is a powerful draw.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">(<strong>** Tap or click the headline above to read this story with all of the links<\/strong> to our background and outside sources.)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Saudi Arabia\u2019s 2025 giga\u2011project rollout goes to show how quickly the region can move<\/p>\n","protected":false},"author":1,"featured_media":106050,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2641],"tags":[2439,2425,39,10],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-106049","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-enterprise-explains","tag-ai","tag-energy","tag-enterprise-explains","tag-enterpriseam-ksa","wpautop","entry"],"acf":{"mongo_id":"b796bf4e-f404-4579-8798-e527860511a0","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2026\/2\/1474.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Solving for AI\u2019s power hunger","related_issue":[106044],"teaser":"Saudi Arabia\u2019s 2025 giga\u2011project rollout goes to show how quickly the region can move"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - 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