High solar insolation puts Oman’s renewable energy goals within reach

 

Solar power generation in Oman is growing in prominence, driven by rising efficiencies, the falling cost of photovoltaic cells and lower oil revenue since 2014 Keen to reduce government expenditures and commit a greater share of oil and gas resources to more profitable purposes than feedstock for electricity production, Oman’s official objective is to reach 10% of consumed energy from renewables by 2030, at which point it aims to have added between 3-4 GW of renewable generation capacity.

The sultanate receives among the highest amounts of solar radiation in the world, particularly in its desert areas, where Marmul, Fahud, Sohar and Qairoon Hairiti have the highest insolation of solar energy, according to a Renewables Readiness Assessment report by the International Renewable Energy Agency. There are 320 sunny days per year and high-intensity sunlight can peak at some 6000 watt-hours per sq metre. This abundance of solar resources makes the ongoing shift to renewables in the country all but inevitable.

Major long-term gains include transportation and battery storage or ‘power-to-gas’ technology solutions to store the surplus solar power produced when the country begins generating more than it consumes during the day within the next ten years. Unless that excess electricity is stored, the country will have to depend on natural gas and diesel power plants at night. In the short term natural gas is certain to remain the backbone of electricity generation in light of fluctuating output from solar and wind.

Utility-Scale Solar Projects

Oman’s utility-scale solar ambitions might yield results soon, with the sultanate gearing up to call for tenders for its first large-scale solar independent power project (IPP). Oman Power and Water Procurement Company (OPWP) has signed up a consortium of international consultants comprising top German engineering consultancy Fichtner, international investment banking and advisory services firm Synergy Consulting and global law firm DLA Piper to identify a suitable location, develop tender documents and deliver a cost-effective procurement methodology for a utility-scale solar photovoltaic (PV) power project of up to 500 MW under the build-own-operate (BOO) model. The installed capacity planned for the project represents a significant departure from the capacity of around 200 MW originally envisaged by OPWP when the initiative was first unveiled in 2016.

A request for quotation was issued in December 2017, with the project expected to be awarded by the third quarter of 2018 and commercial operations projected to begin in 2020, according to the recently issued Seven-Year Statement (2017-23) of the OPWP. The Ibri in Dhahirah, Manah and Adam in Al Dakhiliyah governorates, have been suggested as possible sites for the project; however, no decision has been made yet on the configuration of the project or its ultimate location.

Oman’s maiden utility-scale solar power venture is expected to serve as a springboard for future procurement initiatives to tender new power generation capacity that will be operational in 2024, according to the OPWP. The country has already experimented with smaller rollouts in remote areas, with The Rural Area Electricity Company launching a 307-KW solar project in Al Mazyona in Dhofar Governorate, in 2015, reducing emissions by 433 tonnes, saving 155,000 litres of diesel. It makes up a large share of Oman’s current installed solar capacity of 8 MW.

Due to the declining cost of PV panels, solar energy has also become attractive as a resource to power water desalination. Solar thermal desalination processes using solar collectors are being tested in pilot projects and are expected to become available as commercial solutions in the near future.

Smaller Initiatives

Oman is also planning to support residential PV through the Sahim initiative launched by the Authority for Electricity Regulation (AER) – Oman’s power sector regulator – in 2017. A recent study commissioned by Diam, the Public Authority for Electricity and Water, revealed that PV systems installed on residential buildings in the sultanate could offer an estimated 1.4 GW of electricity, with the Muscat Governorate alone capable of generating some 450 MW – similar to a mid-sized gas-based power plant. The introduction of the Sahim programme allows residents to install solar rooftop panels while connected to the national power grid to reduce load on electricity generation and ultimately allow excess energy to be sold back to the grid. Connection to the grid had not previously been facilitated by the AER.

Other local initiatives under way across the sultanate include a Diam solar project running water wells in remote areas, using installed solar panels with a productive capacity of 10 KW per hour to produce 2200 gallons of water per hour for approximately 80 homes in Al Dhakhiliyah governorate. Some prominent players, including Majan Electricity Company and Sultan Qaboos University, have also adopted pilot schemes to generate solar power.

In manufacturing, the Oman Investment Fund and China-based Ningxia Zhongke Jiaye New Energy and Technology Management in May 2017 entered an agreement to develop a solar panel production plant in the Special Economic Zone at Duqm. When commissioned by the end of 2019, the $94m-project will make panels for power plants and residential buildings that will generate around 400 MW in the first phase and 1000 MW of energy in the second. International oil companies are also contributing to gains in solar penetration across Oman. In 2017 Shell carried out solar installations in schools at four different locations as a part of the pilot phase of its “Solar into Schools” initiative, helping to contribute to Oman’s energy transition by reducing grid-supplied electricity demand by at least 150 MWh per year per school. By training Omani small and medium-sized enterprises to install solar PV systems into a total of 22 government school buildings across the sultanate for a period of five years, the programme also helps build a platform for the development and implementation of other small-scale solar projects.

Solar-Powered Oil Production

Seizing on the momentum in renewables and in light of the prolonged oil price downturn, majority state-owned Petroleum Development Oman (PDO) reportedly plans to become a full-fledged energy company over the next decade, encompassing hydrocarbon and renewable energy generation, as well as water management. In late 2017 the company was in the process of rebranding to Energy Development Oman to provide consulting services beyond the oil and gas sector. PDO is an early pioneer in large-scale projects in Oman, launching the 7-MW pilot for the GlassPoint Miraah concentrated solar power project in 2015, completing the first phase of the 1021-MW solar thermal facility in the fourth quarter of 2017. The project harnesses solar energy for enhanced oil recovery purposes at PDO’s Amal West oilfield, using large mirrors to concentrate sunlight and generate up to 6000 tonnes of steam per day at full capacity.

PDO is also in the process of completing the installation of 19,500 PV cells in their Muscat compound to generate 6 MW of electricity, and announced plans in 2017 to float an invitation to tender for up to five 20-MW solar projects in concession areas, mainly scattered between Bahja and Marmul. The project aims to save gas by offsetting the consumption of power produced by conventional gas-powered plants with electricity from solar generated power. The initiative also presents PDO with an opportunity to refine best practices in support and service for PV solar facilities in PDO’s operating environment. The company expects the 100-MW venture to introduce an equivalent fuel saving of 70.5m cu metres of gas per year ($17m annually), reducing its dependency on conventional gas turbines and cutting overall CO2 emissions by roughly 8550 tonnes per annum.

Projects like the utility-scale 500-MW solar power project, PDO’s GlassPoint Miraah and AER’s Sahim initiative have the potential to generate significant value for Oman, creating new opportunities for supply chain development, manufacturing capability, employment and training, which could turn the sultanate into a global centre for solar energy research and development. Success in implementation should be underpinned by the government’s regulatory policies, fiscal incentives and public financing. 

With its strong solar resources and strong insolation levels, Oman now has the opportunity to pioneer solar technologies and establish an advanced professional skills base in modern solar-efficient architecture and energy management. How quickly and effectively the sultanate embraces the potential of solar energy will be dependent on its leadership.

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The Report: Oman 2018

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