Qatar, along with other Gulf countries, is scaling up renewable energy and advancing decarbonisation agenda as battery storage is becoming critical to the Middle East’s energy transition, according to Standard and Poor's (&P).

In its latest report, S&P said battery storage is becoming critical to the Middle East’s energy transition, bridging the gap between abundant but intermittent solar and wind generation and sharply rising demand.

The GCC (Gulf Cooperation Council) countries are hosting some of the world’s largest battery tenders, with Saudi Arabia and the UAE spearheading giga-scale deployments, it said.

Highlighting that battery storage is fast becoming a central pillar of the GCC energy strategies, it said the Gulf countries are accelerating their energy-transition strategies in line with their long-term goals to reduce emissions, diversify their economies, and strengthen their energy resilience.

Saudi Arabia’s Vision 2030 clearly illustrates this shift as its government aims to generate 50% of its electricity from renewable sources by 2030, with the rest to come from highly efficient gas-fired plants, it said, adding the UAE has committed to net-zero emissions by 2050, supported by large-scale solar projects, competitive tenders, and a robust clean-energy roadmap.

"Oman, Qatar, and Bahrain are also scaling up renewable energy, advancing their own decarbonisation agendas through utility-scale procurement and public-private partnerships," S&P said.

Finding that the growing share of intermittent renewables in the generation mix also raises system-level challenges, it said peak electricity demand in the region typically occurs in the evening, when solar production drops.

This mismatch between the timing of generation and demand means that without flexible resources, renewables can't deliver reliable power, thus addressing this challenge has now become a priority for both policy and investment, it said.

"In this context, we are seeing a strong push for battery energy storage systems (BESS), not just as optional add-ons, but as enablers of energy security and grid flexibility in a low-carbon system," the credit rating agency said, adding "momentum is building across the region, projects are scaling up, and procurement pipelines are expanding. In our view, battery storage is becoming critical to delivering reliable, round-the-clock, clean power."

Highlighting that falling battery prices are reinforcing the economic case for storage across the GCC; it said decade, lithium-ion battery prices have declined by more than 80%, driven by global electric-vehicle demand, scaled manufacturing, and steady advances in battery design, performance, and durability.

"This cost trajectory is especially critical for the GCC, where the cost of solar photovoltaic (PV) power is already among the lowest in the world--often below $0.02 per kilowatt hour (/KWh)," it said.

Stressing that the case for battery storage is particularly strong in the Middle East due to the region’s unique combination of high levels of sunshine and sharply defined load curves; it said other GCC countries, including Oman, Qatar, and Bahrain, are beginning to explore grid- connected storage solutions, although these efforts remain nascent.

"Nonetheless, the growing number of large-scale procurements across multiple jurisdictions show that battery storage is moving from theoretical to practical applications," the report said, expecting project finance to remain the dominant funding model for battery storage projects in the GCC region.

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