MIDDLE EAST Trends and Developments Contributed by: Brendan Hundt, Dan Feldman, Sam Anastasiou and Saiesh Kamath, King & Spalding LLP
reliable, clean power to emerging AI and advanced- technology loads. Separately, EWEC is procuring multiple new BESS facilities (such as its 400 MW Wahat Al Zaweya BESS), designed to provide oper- ating reserves and network flexibility. Together these projects mark a decisive shift from solar PV electric- ity being seen as a cheap, but intermittent, supple- ment to a largely fossil-fuel powered energy grid, to it forming the backbone of a renewable-fuelled grid that provides around-the-clock capacity. Saudi Arabia’s storage tenders Saudi Arabia has also moved quickly to build a dedi- cated storage market in recent years. In November 2024, SPPC launched the Kingdom’s first standalone BESS tender for 2 GW/8 GWh across four equally sized 500 MW/2,000 MWh (four-hour) sites, on a build-own-operate basis with 15-year storage servic- es agreements. A total of 33 local and international bidders prequalified, including Masdar and Acwa, among others. A second group of projects followed in April 2026, comprising six further 500 MW/2,000 MWh projects totalling 3 GW/12 GWh, again on a build-own-operate model. These tenders support a national ambition to have installed roughly 48 GWh of BESS storage by 2030. Assets are already coming online: the Bisha facility (500 MW/2,000 MWh, supplied by China’s BYD) has been described as the world’s largest sin- gle-phase storage project, and the Saudi Electricity Company connected 7.8 GWh across three southern sites in December 2025. Commercial and legal takeaways There are a number of key takeaways in light of these market developments. First, IPP and build-own-oper- ate structures, underpinned by long-term offtake from a single government-owned buyer, remain the back- bone of the market and are the main driver of low tariffs. Second, standalone storage is emerging as a distinct asset class, remunerated through availability or capacity-style storage services agreements rather than energy sales, which changes revenue modelling, bankability and risk allocation. Third, co-locating solar and storage (for example, the round-the-clock project or the Adam project) raises new issues to consider on
grid connection, dispatch priority, metering and how firm-capacity obligations are documented. Data centres: the demand shock testing (and powering) the grid While solar-plus-storage is transforming supply, AI data centres are transforming demand. Both the UAE and Saudi Arabia are competing to become leading regional, and global AI hubs and are attracting tens of billions of US dollars from global technology com- panies and sovereign investors. These facilities are creating some of the largest single electricity loads either country has ever connected, which places power procurement at the centre of the commercial and, consequently, legal analysis. For context on the scale, some of the electricity loads being envisaged in data centre projects currently being procured would have exceeded the total installed renewable capacity of most GCC countries as recently as a few years ago. The UAE’s flagship data centre development is Star- gate UAE, led by Abu Dhabi’s G42 with OpenAI, Ora- cle, Nvidia, Cisco and SoftBank, envisaged as a 1 GW compute cluster in the broader UAE-US 5 GW AI campus, with the first 200 MW expected to come online this year. Alongside it, Microsoft’s USD15.2 bil- lion commitment to the UAE includes a 200 MW data centre expansion delivered through G42’s Khazna, building on a USD1.5 billion Microsoft–G42 partner- ship. Other deals include a USD544 million hyperscale facility by du with Microsoft and a USD1 billion cloud expansion by AWS with e&. The power implications are significant. Wood Mac- kenzie’s March 2026 report estimates that UAE data centres consumed about 3 TWh in 2025 (roughly 2% of national electricity demand of 173 TWh) and will more than double to over 6 TWh by 2030. Howev- er, data centres could account for a far larger share of demand and may require additional gas-turbine capacity if more optimistic growth scenarios become feasible. EWEC itself may be planning further gas- turbine projects, including the Taweelah C CCGT, to provide additional flexibility. KSA’s national AI champion is HUMAIN, a PIF com- pany launched in May 2025, which plans to develop around 1.9 GW of data centre capacity by 2030, scal-
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