Middle East & Africa Smart Energy Market Outlook, 2029

The Middle East and Africa region is experiencing rapid urbanisation, with a significant portion of the population moving from rural areas to cities. This urbanisation trend presents challenges and opportunities for smart energy solutions as cities seek to manage energy demand, improve efficiency, and enhance sustainability in urban environments. The Middle East and Africa region has abundant renewable energy resources, including solar, wind, and hydropower. Countries such as Saudi Arabia, the United Arab Emirates, and Morocco are investing heavily in renewable energy projects to diversify their energy mix, reduce dependence on fossil fuels, and capitalise on their renewable energy potential.

Many countries in the Middle East and Africa region are implementing energy efficiency initiatives and regulations to reduce energy consumption, lower carbon emissions, and enhance sustainability. Smart energy solutions such as energy management systems, smart metres, and building automation technologies help improve energy efficiency and reduce energy waste in buildings, industries, and transportation. The Middle East is home to some of the world's largest oil and gas reserves, and the oil and gas industry plays a significant role in the region's economy. However, there is a growing recognition of the need to diversify the energy sector and invest in cleaner and more sustainable energy sources. Smart energy solutions can help oil and gas companies improve operational efficiency, reduce environmental impact, and transition towards a more sustainable energy future. Furthermore, the region offers significant market opportunities for smart energy companies and technology providers. As governments and utilities prioritise energy diversification, sustainability, and grid modernization, there is growing demand for smart energy solutions and services across various sectors, including power generation, transmission, distribution, and end-user applications.

According to the report “Middle East and Africa Smart Energy Market Outlook, 2029,”, the Middle East and Africa Smart Energy market is anticipated to grow with more than 10% CAGR from 2024-2029. The MEA region has a fast-growing population, which drives increased energy demand for residential, commercial, and industrial purposes. Smart energy solutions can help meet this growing demand by optimising energy use, reducing waste, and improving energy efficiency across various sectors. Despite abundant energy resources in some parts of the MEA region, many areas still lack reliable and affordable access to electricity.

Smart energy solutions such as off-grid solar systems, microgrids, and energy storage technologies play a crucial role in expanding energy access and addressing energy poverty in rural and remote communities. As well, the MEA region has abundant renewable energy resources, including solar, wind, and hydropower. Countries such as Saudi Arabia, the United Arab Emirates, and South Africa are investing in renewable energy projects to diversify their energy mix, reduce dependence on fossil fuels, and capitalise on their renewable energy potential. Advances in smart energy technologies, such as smart grids, energy management systems, and digitalization, are driving the adoption of smart energy solutions in the MEA region. These technologies enable real-time monitoring, control, and optimisation of energy systems, leading to improved efficiency, reliability, and cost-effectiveness.

Major Drivers

• Renewable Energy Potential: The Middle East and Africa region possesses abundant renewable energy resources, including solar, wind, and hydropower. This vast potential for renewable energy generation presents a significant opportunity for the development and expansion of smart energy solutions. Countries in the region are increasingly recognising the benefits of tapping into these renewable resources to diversify their energy mix, reduce dependence on fossil fuels, and mitigate greenhouse gas emissions. Smart energy technologies, such as solar photovoltaic (PV) panels, wind turbines, and hydropower plants, enable the harnessing and integration of renewable energy into the electricity grid. As the cost of renewable energy technologies continues to decline and efficiency improves, the deployment of smart energy solutions leveraging renewable energy sources becomes increasingly attractive and economically viable in the Middle East and Africa region.
• Energy Demand Growth: The Middle East and Africa region is experiencing rapid population growth, urbanisation, and economic development, leading to a significant increase in energy demand across various sectors, including residential, commercial, and industrial. This growth in energy demand is being driven by factors such as rising standards of living, increased electrification, expanding industrialization, and the emergence of new industries and technologies. On the other hand, it puts pressure on existing energy infrastructure and resources, necessitating investments in grid modernization, renewable energy deployment, and energy efficiency measures to meet the rising demand sustainably.

Major Challenges

• Technology and Skills Gap: The Middle East and Africa region faces a technology and skills gap in the adoption and implementation of smart energy solutions. This gap refers to the lack of access to advanced technologies, expertise, and a trained workforce needed to develop, deploy, and manage smart energy infrastructure and systems effectively. Many countries in the region lack the necessary technical expertise, institutional capacity, and educational resources to fully leverage smart energy technologies and solutions. Additionally, the rapid paces of technological innovation in the smart energy sector outpace the region's ability to keep up with the latest advancements.
• Policy and Regulatory Barriers: Policy and regulatory barriers pose challenges to the development and deployment of smart energy solutions in the Middle East and Africa region. These barriers include complex and fragmented regulatory frameworks, inconsistent policies, bureaucratic hurdles, and unclear incentives for investment in smart energy projects. In some cases, regulatory uncertainty and ambiguity deter investors and developers from investing in smart energy infrastructure and technologies. Additionally, out-dated or inadequate regulations hinder innovation and slow down the adoption of new technologies and business models in the smart energy sector. Overcoming policy and regulatory barriers requires governments to streamline regulations, harmonise policies across jurisdictions, and provide clear incentives and support mechanisms for investment in smart energy projects.

Based on product types, they are segmented into smart grid, digital oilfield, smart solar, and energy management systems. Among them, smart solar is expected to grow at the highest CAGR rate by the forecast year.

The MEA region is ideally situated for the production of solar energy since it has some of the highest levels of sun irradiation in the area. Many prospects for solar power generation are provided by the region's large deserts and sunny weather, especially in the Middle East and Africa. The implementation of intelligent solar technology is strongly recommended in order to effectively utilise the plentiful solar resources. The MEA region is experiencing rapid population growth, urbanisation, and economic development, leading to an increase in energy demand across various sectors. Many countries in the region also face energy access challenges, particularly in rural and remote areas.

Smart solar solutions, such as off-grid solar systems, solar mini-grids, and solar-powered water pumps, offer cost-effective and sustainable solutions to meet the growing energy demand and expand energy access in underserved communities. The cost of solar photovoltaic (PV) technology has declined significantly in recent years, making solar energy more affordable and competitive compared to conventional energy sources such as fossil fuels. The decreasing cost of solar panels, inverters, and balance-of-system components has made smart solar solutions more accessible to a wider range of customers, including residential, commercial, and industrial sectors, driving adoption and market growth in the MEA region.

Based on the end user segment, the market is majorly categorised into residential, industrial, and commercial. The residential sector is expected to grow at the highest rate.

There are more homes and residential structures in the MEA area as a result of the region's fast urbanisation and population rise. Demand for energy services in residential structures, such as water, heating, and cooling, is rising as more people relocate to cities and metropolitan regions. Renters and homeowners may control their energy use, save on utility costs, and enhance convenience and comfort in their homes with the help of smart energy solutions. Despite economic growth and development in many parts of the MEA region, access to reliable and affordable energy remains a challenge, particularly in rural and peri-urban areas.

The residential sector represents a significant portion of the population without access to electricity or with limited access to modern energy services. Smart energy solutions, such as off-grid solar systems, solar home kits, and energy-efficient appliances, provide households with access to clean, reliable, and affordable energy, improving their quality of life and socioeconomic well-being. Rising energy costs, coupled with growing environmental awareness, are driving homeowners in the MEA region to seek energy-efficient and sustainable solutions for their homes. Smart energy technologies, such as smart metres, energy management systems, and home automation devices, enable households to monitor and control their energy consumption, optimise energy use, and reduce utility bills. Additionally, the desire to reduce carbon footprints and mitigate climate change motivates homeowners to invest in renewable energy sources, such as solar power, to power their homes.

Based on the report, the major countries covered in the report include the UAE, Saudi Arabia, South Africa, and the rest of the Middle East and Africa.

South Africa contributes the highest market share. South Africa has abundant renewable energy resources, including solar, wind, and biomass. The country's favourable climate and geographical conditions make it well-suited for renewable energy generation. South Africa has implemented renewable energy procurement programmes, such as the Renewable Energy Independent Power Producer Procurement (REIPPP) programme, which has attracted significant investments in renewable energy projects and propelled the growth of the smart energy market. South Africa has a well-established regulatory framework and market structure for the energy sector, which facilitates private sector participation and investment in smart energy projects.

The country's competitive electricity market, coupled with clear regulations and procurement processes, has attracted both local and international investors to the smart energy market. Additionally, South Africa's independent energy regulator, the National Energy Regulator of South Africa (NERSA), ensures transparency, fairness, and stability in the energy sector, contributing to market leadership in smart energy. South Africa has a diverse energy mix, comprising coal, renewable energy, nuclear, and gas-fired power generation. The country is actively modernising its electricity grid to accommodate the integration of renewable energy sources, enhance grid stability, and improve energy efficiency. Smart grid technologies, such as advanced metering infrastructure (AMI), distribution automation, and demand-side management, play a crucial role in optimising grid operations and enabling the transition to a more sustainable and resilient energy system.

Product launches and developments, followed by expansions, mergers and acquisitions, contracts, agreements, partnerships, and collaborations, have been the key business strategies utilized by leading companies to grow their market share. The companies used a variety of tactics to increase market penetration and strengthen their position in the competitive industry. For example, in February 2023, Itron Inc. collaborated with SEW, a well-known provider of cloud-based software solutions for the water and energy industries. The alliance hopes to create new solutions based on Itron's OpenWay Riva IoT system, which includes smart power meters and other smart grid technologies. Furthermore, it would offer utilities with vital information about their customers' energy usage and assist them control their energy consumption.

Considered in this report

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year:

2029Aspects covered in this report

• Smart Energy market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Product

• Smart Grid
• Digital Oilfield
• Smart Solar
• Energy Management System

By End User

• Residential
• Industrial
• Commercial

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases.

After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Smart Energy industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.