A series of renewable energy projects are on the horizon as the: sultanate looks to diversify its power mix Sun soaked


A combination of factors, including climate change, rising energy demands and limited hydrocarbons resources, have driven Oman’s renewable energy agenda in recent years. Although renewables were estimated to have made up less than 1% of the country’s electricity mix in 2018, the Oman Power and Water Procurement Company (OPWP) aims to roll out 2500-3000 MW of generation capacity by 2025 in order to reach the target of 10% set by the National Energy Strategy. This will mean a considerable increase in the number and scale of renewable energy projects being implemented: to put the target into perspective, Oman’s installed renewable capacity grew from 1 MW in 2014 to 8 MW in 2018.

While solar photovoltaic is the technology of choice for the majority of projects, the sultanate is looking to promote investment in large-scale wind projects by gathering more comprehensive data on the country’s resources, and there is also the possibility of opening a solar thermal plant in Duqm.

Solar Projects

The sultanate is looking to steadily increase its solar energy output, with government-owned utilities group Nama Holding announcing plans to deliver a new solar project every year from 2019 onwards. The OPWP awarded the contract for the country’s first solar independent power plant (IPP), the 500-MW Ibri II project, in March 2019. Following competition from bidders including the Abu Dhabi Future Energy Company (Masdar), the project was awarded to a consortium comprising Saudi Arabia’s ACWA Power, and Kuwaitbased Gulf Investment Corporation and Alternative Energy Projects. Ibri II is projected to cost more than $400m and will be capable of supplying an estimated 33,000 homes with electricity. The plant is scheduled to become commercially operational by June 2021.

In July 2019 the OPWP issued a request for qualifications for the development of a second solar IPP project, formerly known as Manah I and Manah II IPP. The development, which is made up of two plants with a combined capacity of 1.1 GW, will be located in Manah, around 150 km south-west of Muscat. Contracts for the plants are scheduled to be awarded in the third quarter of 2020, while operations will begin in the last quarter of 2022.

Five further initiatives are in progress to develop utility-scale solar plants and smaller projects at Sohar Port, with a total capacity of 3.5 GW. Mark Geilenkirchen, CEO of Sohar Port and Freezone, told local media in November 2019 that the company was looking to reduce its carbon footprint at the port and industrial area while using as little of the sultanate’s natural gas resources as possible. The first initiative is a small-scale solar park, which is scheduled to come on-line in late 2019 or early 2020.

The government-led oil major Petroleum Development Oman (PDO) is also in the process of constructing a utility-scale solar power plant in Amin. PDO will be the sole offtaker of electricity from the plant, which is set to have a capacity of 105 MW and will begin commercial operation in May 2020. As the renewables segment is extremely dynamic, it is necessary for companies to innovate in order to keep up with their competitors. “The distributed energy segment is a challenging market as it is highly competitive, and companies interested in implementing renewable energy and energy efficiency are looking for the best value and total cost of ownership at the cheapest rates,” Firas Al Abduwani, CEO of ICT solutions firm Hussam Technology Company, told OBG. “Therefore, small and medium-sized enterprises active in this segment find that in order to successfully deliver, they need to excel at both innovation and diversification, while also partnering with developers to address market needs and achieve growth.”


To encourage the uptake of solar power on a smaller scale, the Authority for Electricity Regulation (AER) launched the Sahim initiative in January 2017. The nationwide programme aims to promote the installation of rooftop solar panels on residential and commercial buildings. According to a 2008 study conducted by the AER, around 50% of houses in Oman had 20 sq metres of available roof area and would be suitable for solar panels.

Pre-existing regulations have been revised in order to facilitate the increased uptake of panels, including measures to allow distribution companies to act as agents for the OPWP and purchase electricity from consumers, changes to technical standards for rooftop solar installations and a net metering mechanism to enable customers to be compensated for electricity generated by solar panels.

Under the first phase of the initiative, which was launched in March 2018, businesses and large residential properties were encouraged to install solar panels at their own cost, with the benefit of a bulk supply tariff for any excess electricity exported to the grid. The second phase, which began in 2019, is focused on the large-scale implementation of solar panels across the country, aiming to cover 10-30% of all residential properties. This equates to roughly 250,000 homes and 1 GW of solar capacity. According to local media, the AER plans to launch a competitive process for private developers to bid for contracts to develop the solar panels, beginning in the last quarter of 2019. Customers will be required to pay a fee to participate in the Sahim initiative, which will then be offset by lower electricity bills.

Sahim and related initiatives are not intended to replace conventional power generation, but instead reduce the sultanate’s reliance on hydrocarbons, balance and stabilise the energy network, and support growing demand for electricity, particularly at peak periods, which occur twice per day. Solar power will therefore help stabilise the grid during busy times.

Solar-Diesel Hybrids

Solar-diesel hybrid systems have become more feasible thanks to the decreasing cost of solar generation and battery energy storage systems (BESS). The BESS stabilises the grid by compensating for any fluctuations caused by the intermittent nature of solar, and any additional solar energy production can be shifted to night-time use. Diesel generators are used to serve the base load during times when solar production is too low or not available during the night.

A solar-diesel-BESS hybrid project is currently under way by the Rural Areas Electricity Company (Tanweer). The company is scheduled to award the contracts for the development of hybrid IPPs at 11 locations around the country before the end of 2020. The request for proposal documents were issued to pre-qualified bidders on December 15, 2019. The successful bidder will be responsible for developing the solar plant under a build-own-operate-transfer framework and construct two greenfield diesel power plants at Madha and Mitten, with Tanweer designated as the sole offtaker from the sites. The total solar capacity to be installed is set at 48 MW, with a diesel generation capacity of 54 MW and a 28-MW alternating current BESS.


According to the OPWP’s “Seven-Year Statement 2019-25”, the company plans to develop a thermal solar plant with storage capabilities if it does not receive final government approval for a clean coal IPP in 2019. The thermal plant will contain a baseload generator with a capacity of around 600 MW. The plant will supply Duqm Special Economic Zone, which is predicted to see electricity demand grow by 23% per year between 2019 and 2024.


In August 2019 the first electricity was produced at Dhofar Wind Plant in the south of the country. The project, developed by Masdar and financed by the Abu Dhabi Fund for Development, comprises 13 turbines and has a capacity of 50 MW. The plant is projected to be able to produce electricity for 16,000 homes per year, accounting for 7% of Dhofar governorate’s generation capacity. Following its completion, the plant will be handed over to Tanweer for operation, with all output sold to the OPWP. As well as being Oman’s first full-scale wind plant, the project is the first of its kind in the GCC region.

The OPWP is also looking to include wind as part of its energy plans at the Port of Duqm. According to the OPWP’s 2019-25 strategy, the company plans to develop wind IPPs across multiple sites, with a potential finalisation date of 2023. The OPWP also aims to complete a 100-MW wind farm in Al Sharquiah, the country’s easternmost region, by 2023.

The long-term development of the sultanate’s wind resources will depend on the accurate mapping of data. In March 2019 the OPWP invited proposals for a wind resource assessment project, which involves the installation of wind monitoring stations at a number of strategic sites across the country. The move is intended to improve transparency and reduce risk for potential investors, with the data set to be published on the OPWP’s website and provided in request for proposal documents when projects are tendered.