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Abstract

This study explores the co-evolution of energy transition and economic diversification in Saudi Arabia during 2005–2025. It addresses the limited historical integration of energy-transition and diversification indicators in the Saudi context. Using a descriptive and analytical design based on secondary data, official statistics, international reports and national policy documents, the research identifies trends in renewable-energy capacity, electricity-mix reform, emissions pledges, non-oil sector performance, oil-sector developments and fiscal sustainability. The findings suggest that Saudi Arabia's energy transition has moved beyond mere policy rhetoric, particularly through plans to move away from liquid fuels in power generation and further develop renewables. Nonetheless, this transition remains only partial by 2025. The findings also support the conclusion that non-oil activities have become a more stable growth driver, whereas oil-sector shifts continue to affect headline gross domestic product (GDP) and fiscal conditions. In summary, the analysis shows that energy transition and economic diversification are increasingly complementary but not mechanically causal. Their relationship is related to implementation capacity, grid readiness, investment channels and the absorptive capacity of the non-oil economy.

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