If things go as planned, Oman is competing with neighbouring Saudi Arabia and all set to become the biggest exporter of carbon-free green Hydrogen in the Middle East and sixth largest exporter in the world by 2030.
Oman’s oil and gas exports account for 60% of its revenue and the Sultanate wants to diversify its economy by moving away from hydrocarbon revenue. One of the major sources for Oman in its plans is to develop green hydrogen projects and earmarked 1,500 sq km for them and up to 40 times more land has been identified for potential production in the long term. The government has already approved six Hydrogen projects so far.
While Saudi Arabia’s NEOM has achieved financial closure of its $8.5 billion Hydrogen project, Oman has signed a Memorandum of Understanding (MoU) with Hydrom, a central and independent entity owned by Energy Development Oman (EDO), to develop green Hydrogen projects worth $20 billion. These Hydrogen projects are expected to generate 500,000 metric tons of green Hydrogen per year.
One of the reasons for Oman’s decision to develop clean energy projects is the vast tracts of land available in the country and the solar irradiation makes it one of the best destinations for foreign investors. Oman’s land mass is more than 300,000 sq km and its roads constitute around one fifth of the total area.
Oman has pledged to achieve net zero emissions (NZEs) by 2050 and promoting hydrogen projects will help the government in meeting the target and reduce its natural gas consumption as well as carbon emissions.
Huge Investments Needed
A new report entitled “Renewable Hydrogen from Oman: A Producer Economy in Transition,” released by the Vienna headquartered International Energy Agency (IEA) on Monday, the IEA said that Oman aims to produce at least 1 million tons of renewable hydrogen a year by 2030, which requires at least $45 billion in investments. An additional $4 billion would be required to bring renewables’ share of the national electricity mix to 20%, the report said.
Furthermore, the country plans to step up production up to 3.75 million tonnes by 2040 – and up to 8.5 million tonnes by 2050, which would be greater than total hydrogen demand in Europe today, the IEA report said.
“The 2040 hydrogen target would represent 80% of Oman’s current LNG exports in energy-equivalent terms, while achieving the 2050 target would almost double them,” the report said.
IEA Executive Director Fatih Birol who presented the report Oman’s Minister of Energy and Minerals Salim Al Aufi in Paris, said that it was the first of its kind report that analysed renewable hydrogen potential in a fossil fuel producer country.
Dr Boril said that 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 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,” Birol said.
In his comments, Al Aufi said that 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.
“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,” he said.
Oman’s hydrogen projects will use electrolysers powered by renewable electricity to extract hydrogen from desalinated sea water. Oman benefits from high-quality solar PV and onshore wind resources, as well as vast amounts of available land for large-scale projects. Achieving its targets and using one-third of renewable hydrogen for domestic uses would significantly contribute to Oman’s clean energy transition. The benefits would include reducing domestic use of natural gas by 3 billion cubic metres a year and avoiding 7 million tonnes of carbon dioxide emissions, the IEA concluded.