Oman, the Rising Renewable Energy Pioneer in the Gulf

With abundant solar and wind resources and vast available land, Oman is emerging as a clean energy pioneer in the Gulf. Its openness to foreign technology and capital makes it an attractive partner for international collaboration.

01 Policy and Regulatory Environment

Oman's Vision 2040 and national energy plans emphasize achieving economic diversification through sustainable energy and reducing domestic gas consumption.

A. Renewable Energy Targets

Oman aims for renewables to contribute 30% of electricity generation by 2030, 39% by 2040, and to reach net-zero emissions by 2050—equivalent to around 3 GW of new capacity by 2030. The APSR target of 31% by 2029 aligns with Vision 2040.

B. Institutional Framework

Oman has unbundled its power system. The Oman Power and Water Procurement Company (OPWP) is the sole electricity buyer, while generation, transmission (by OETC), and distribution are handled by separate entities under APSR regulation. Between 2022–2023, Oman established Energy Development Oman (EDO) and its subsidiary Hydrom, responsible for land allocation and development of green hydrogen projects.

C. Policy Mechanisms

Like other GCC states, Oman develops renewables mainly through IPP tenders. Its solar bids have reached record-low tariffs (2–3 US¢/kWh). The Sahim program promotes distributed rooftop PV. For hydrogen, Oman is ahead of its peers—allocating desert and coastal zones for development, auctioned under long-term concession models (e.g., 47-year leases).

D. Trade and Investment Environment

Oman, a WTO member, has an FTA with the U.S. It positions itself as a logistics and free-zone hub—such as the Duqm SEZ, offering tax exemptions and 100% foreign ownership. Many global firms have chosen Duqm or Sohar for energy and industrial bases.

02 Solar Power Development

A. Projects Implemented

The 500 MW Ibri II Solar Plant, Oman's first utility-scale PV project, began operation in 2021, led by ACWA Power with GCC and Asian financing.

Two 500 MW projects in Manah followed:

• Manah Solar I: led by Korea Western Power consortium;
• Manah Solar II: a consortium of Jinko Power and Sembcorp, expected online before 2025.

B. Market Opportunities

With a population of about 5 million, Oman's domestic demand is limited, yet its vast land enables energy export—either as power via the GCC grid or through derivative products like green hydrogen or desalinated water. Oman's openness to new entrants also creates favorable conditions for foreign investors, especially compared to Saudi Arabia's more closed market.

03 Wind Power Development

A. Projects Implemented

The Dhofar Wind Farm (50 MW), operational since 2019, was developed by Masdar with funding from the Abu Dhabi Fund for Development. The 13 GE turbines power around 16,000 homes.

B. Challenges

Wind project construction faces logistical challenges due to desert and mountain terrains, where Duqm Port plays a key logistical role. Grid integration of southern Oman is ongoing. Future synergies between wind power and hydrogen production could enhance system stability and efficiency.

04 Green Hydrogen and Ammonia Development

Oman stands out among GCC nations for its proactive green hydrogen strategy, leveraging renewables for export-driven decarbonization.

A. Strategy and Targets

Oman targets 1 million tonnes of green hydrogen annually by 2030 and over 8 million tonnes by 2050, requiring about 50 GW of renewable capacity. Hydrom is spearheading this through structured land auctions. In 2023, two 700 km² blocks in Dhofar were awarded to consortia expected to invest $10–12 billion, producing 370,000 tonnes of hydrogen (mainly as ammonia) by 2030. More blocks in Al Wusta will follow in 2024, attracting interest from Adani (India), BP, Shell, and potential Chinese players.

B. Market Opportunities

Oman welcomes foreign investors and technology partners. Early entrants can secure long-term renewable land rights for hydrogen and ammonia exports. The government and Hydrom offer supportive agreements for grid and port access. Partnerships with OQ or OIA can further mitigate investment risks.

05 Enhancing Energy Resilience through Microgrids and Hybrid Systems

Energy security and resilience lie at the heart of Oman's renewable strategy. Pilot microgrids combining solar, hydrogen, and diesel backup are being deployed in industrial zones and remote areas to reduce grid dependency. APSR is also advancing smart metering and distributed generation standards to enable future smart energy systems.