Auctions begin for land with huge solar and wind capacity to spur rapid advancement of green hydrogen, as well as net zero, by 2050.
Oman’s high-quality renewable energy resources and available land are being capitalised on by a bold vision to transform the oil and gas exporting country into a net zero economy and a clean hydrogen powerhouse.
Oman’s hydrogen strategy, according to a new report from the International Energy Agency, has the potential to have a global impact. Oman benefits from high-quality solar PV and onshore wind resources that make renewable hydrogen production competitive for large scale export. The country is conveniently situated along important market routes between Europe and Asia, with existing fossil fuel infrastructure that can be repurposed for low-emissions fuels.
The country also has extensive expertise in handling and exporting both LNG and ammonia that is directly applicable to renewable hydrogen and hydrogen-based fuels. And perhaps most importantly, Oman has already started implementing concrete measures to achieve its ambitious targets.
In 2022, the government established an independent entity, Hydrogen Oman (HYDROM), to lead and manage its hydrogen strategy. 1,500 square kilometers of land has already been put aside for development by 2030 – and up to 40 times more land has been identified for potential production in the long term, to be auctioned to investors to deliver. Six projects have already been allocated land for renewable hydrogen in the country’s first such auction process.
The IEA report, Renewable Energy from Oman, is the first of its kind, analysing renewable hydrogen potential in a fossil fuel producer economy. It has now been presented by IEA executive director Dr Fatih Birol to Oman’s minister of energy and minerals Salim Al Aufi at the agency’s headquarters in Paris.
Dr Birol said: “Oman is an oil and gas producer country that is taking an enlightened approach to its energy future, with a clear long-term vision and strong net zero ambitions. Thanks to its huge potential for low-cost solar and wind, renewable hydrogen is set to bring multiple benefits to Oman. The IEA is very pleased to be working with Oman on policy and technical matters as the country moves ahead on its journey to a net zero economy and shows other producer countries what is possible.”
Scale and speed of change
The scale and speed of change to Oman’s economy will be huge. Oil and gas today represent around 60% of Oman’s export income, and domestic natural gas accounts for over 95% of the country’s electricity generation. However, IEA analysis of the current global project pipeline suggests that within a few years, Oman is on track to become the sixth largest exporter of hydrogen globally and the largest in the Middle East by 2030, as it works to grow green hydrogen exports alongside its plan for domestic net zero by 2050.
To do that, Oman aims to produce at least one million tons of renewable hydrogen a year by 2030, up to 3.75 million tonnes by 2040 and up to 8.5 million tonnes by 2050. That later figure would on its own meet all of Europe’s demand today. It would also represent almost twice the total LNG exported each year by Oman.
Minister Al Aufi explained why this is important to Oman. “From an energy perspective, Oman is better known for being an oil and gas developer, however it is also blessed with globally competitive solar and wind energy resources, and the most economically rational action for us is to embark on using this as the most viable and sustainable energy of tomorrow, including decarbonising the power generation, local industry and hydrogen production for export. We’re pleased to be working with the IEA on key aspects of our transition and are very encouraged by the insights offered by this report.”
Practical transition requires infrastructure investment
Oman’s renewable hydrogen exports are likely to be transported initially in the form of ammonia. While Oman already exports around 200 000 tonnes of ammonia a year, its ammonia export capacity would need to be 20 to 30 times higher to achieve its ambitions for 2030. That will require major investment fast to put in place necessary storage tanks and dedicated deep-water jetties.
Meeting Oman’s hydrogen targets will also require a massive increase of renewable power, with around 50 terawatt-hours of electricity needed to meet the 2030 target, greater than the current size of the country’s entire electricity system. Fortunately, based on recently awarded bid prices in the region, utility solar PV and wind are likely already competitive, with electricity generation from natural gas in Oman and the wider region has seen investment in renewables outstrip even that of oil, suggesting capacity exists to deliver at scale.
That is important because scaling up production of renewable hydrogen in Oman to one million tonnes by 2030 will require cumulative investment of around $33bn. An additional $4bn would also be required to bring renewables’ share of the domestic electricity mix to 20%.
Click here to download the Renewable Hydrogen from Oman report.