In October 2022 Oman became the third GCC country to commit to net-zero emissions by 2050, in support of the Paris Agreement. Following the UAE and Saudi Arabia – which in 2021 pledged to reach net-zero – Oman aims to build on a series of clean energy investments and power projects across the sultanate.
Oman’s oil production surpassed 1m barrels per day during the first nine months of 2022, up 10.4% yearon-year. The sultanate also has two liquefied natural gas production facilities, with production surging to a record 10.6m tonnes in 2021 due to projects to expand capacity. Despite ample hydrocarbons resources, Oman aims for renewables to make up at least 30% of its energy mix by 2030. As of August 2022 electricity capacity from renewables was around 650 MW, with the goal set at nearly 3.4 GW by 2027.
Renewable Opportunities
Oman’s net-zero announcement is expected to accelerate developments in the sultanate’s renewable and green energy segments. “Positive efforts are being made by local public and private stakeholders to raise awareness of the importance of recycling and sustainability under Oman Vision 2040,” Ali Kreik, regional director for the GCC at Averda, told OBG. “However, more work is needed to show tangible improvements in the industrial and residential spheres.” The Oman Sustainability Centre was established in October 2022 to oversee its carbon-neutrality plans and boost the sultanate’s attractiveness for investing in renewables.
The strategy for expanding the sultanate’s renewables capacity relies on photovoltaic solar accounting for around 79% of capacity, with wind providing the rest. A milestone was reached in January 2022 with the inauguration of the 500-MW Ibri II solar field, built by a consortium of Saudi Arabia’s ACWA Power, and the Gulf Investment Corporation and Alternative Energy Projects, both of which are based in Kuwait. The field, which consists of 1.5m bi-facial solar panels across an area of 13m sq metres, will offset 340,000 tonnes of carbon dioxide, according to its developers, making it the largest utility-scale project connected to the grid.
Ongoing projects and government initiatives have led to greater interest in the renewables sector. The Oman Power and Water Procurement Company (OPWP) has announced plans to award two solar power plants in the Al Dakhiliyah Governorate with a combined capacity of 1000 MW to the private sector for an estimated $600m investment. A further $300m worth of investment opportunities are available in the wind energy segment in the wilaya (province) of Jalan Bani Bu Ali in the Al Sharqiyah South Governorate and the wilaya of Duqm in the Al Wusta Governorate. These plans fall within a wider national strategy to attract $1.25bn in investment for renewable energy and water projects.
Hydrogen Potential
Clean energy development is not limited to traditional renewable sources. In October 2022 the sultanate unveiled its green hydrogen strategy led by Hydrogen Oman (Hydrom), a subsidiary of the newly established Energy Development Oman that aims to capitalise on solar and wind potential, and produce hydrogen using renewable sources (see Energy chapter). Hydrom is key to Oman’s planned $140bn investment to produce between 7.5m and 8.5m tonnes of green hydrogen per year by 2050, with a target of 1m tonnes by 2030. The deadline for bids from qualified applicants for Hydrom’s first public auction was March 15, 2023, with an announcement expected by April 2023. Hydrom had received over 180 registrations as of December 2022, and more than 50 applicants had been granted access to the request for qualifications stage.
Similarly, in October 2022 ACWA Power said its $7bn integrated green hydrogen and ammonia production facility in the Dhofar Governorate could be opened before 2029. In January of that year the sultanate signed an agreement with UK major BP to explore hydrogen projects. Ultimately, green hydrogen constitutes a strategic opportunity for the country to create a more sustainable energy industry and diversify its economy.
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