Future Green Energy Projects in Oman

Introduction to the blog

First off, I’d like to introduce myself. My name’s Natascha, and I work as a Recruitment Consultant here at WeConnect Energy. I’m currently operating out of our newest office in the UAE, where I specialise in recruitment and consulting within the global Low Carbon and Renewable Energy sectors. This article (my third of the year might I add) is all about Oman – the oldest independent state in the Arab world.

As part of my work focusing on Oman, I’ve been researching and following ongoing developments and upcoming projects. My original goal was to put together a high-level project plan of what the country has in store green energy-wise. This quickly developed into something much bigger and worth sharing, so I decided to polish up my notes and share some key facts with you in the form of a blog. Quick disclaimer: this article is all about sharing insights on Oman’s green energy sector rather than tips for landing a job. If that’s what you’re after, why not check out my previous blog from earlier this year where I provided advice for those looking to transition from Upstream to the Low Carbon and Renewables sectors.

Oman is my muse because it’s quickly emerging as a major player in the global green energy scene, with several exciting large-scale projects in clean hydrogen, onshore wind, and solar energy. These projects are set to play a big role in helping the country reduce carbon emissions, diversify its economy, and create fresh job opportunities in renewable energy. It’s also the focus of my interest because I’ve got a range of roles that I’m hiring for. I have noticed an increase in inquiries from clients looking to hire for roles related to green hydrogen projects and industrial decarbonisation efforts in the region. Oman’s plans are ambitious, combined with a favourable regulatory environment, it’s becoming a country of strategic importance for the global green energy transition. In this article, I’ll dabble into some facts about the sectors, the projects agreed so far in 2024 and give you an idea of what kind of activity to expect in the next 12 months.

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The Global Clean Hydrogen Era

For now, most hydrogen consumed globally is grey hydrogen (roughly 90 Mtpa). This is produced through a process called Steam Methane Reforming (SMR), with CO2 as a by-product released into the atmosphere.

Clean hydrogen represents less than 1% of global hydrogen production due to infrastructure requirements and higher costs. However, it is seizing market share, particularly in Europe and Asia. This cleaner alternative takes the form of blue hydrogen (the same process but with carbon capture) and green hydrogen (produced via electrolysis using renewable energy).

That modest statistic is misleading, however, as clean hydrogen today stands at an inflexion point on an S-curve – in other words, its adoption will not involve a slow, gradual transition but a rapid move towards decarbonising the most complex parts of our modern economy. After 2025, most new hydrogen plants entering service are expected to be clean hydrogen-based.

Demand for grey hydrogen is expected to decline over time as the costs of the green molecules become more competitive. In the long-term, the uptake of clean hydrogen could be driven further by an increase in CO2 pricing, CO2-reduction goals in maritime transportation and quotas on sustainable fuels in the aviation sector.

A recent McKinsey report has great hopes for clean hydrogen in the long-term, predicting an increase in demand to between 125 and 585 million tons per annum (approximately 113 to 530 million metric tonnes) by 2050. Oman plans to be at the centre of that change.

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Oman As Global Green Energy Hub

The country’s vast tracts of available, low-cost land make it well positioned to produce large quantities of low-emission hydrogen. That’s just as well, since Oman aims to become a global hub for hydrogen production by 2030, and is prepared to invest up to $40bn. It has set a target of producing 1 to 1.5 million tonnes annually, increasing to 3.75 million tonnes by 2040.

In 2024, the country signed agreements for several green hydrogen projects worth over $20 bn. One notable project agreed in April involved a consortium of companies including EDF Group, EDF Renewables, Yamna and J-POWER, and aims to produce 178,000 tonnes of green hydrogen per year using 4.5 gigawatts (GW) of solar and wind energy, alongside battery storage systems. This is a hugely impressive goal and commitment, and if achieved should position Oman as a key player in the clean energy transition.

Additionally, The Dhofar project will include a 2.5 GW state-of-art electrolyser. Oman intends to supply the hydrogen produced to a new ammonia plant in the Salalah Free Zone (SFZ).

In April gone by, Hydrogen Oman (Hydrom) revealed Actis, an investor in sustainable infrastructure, and Fortescue, an integrated green energy company, as the winning bidders in the second round of another green hydrogen tender process for the Dhofar Region. While still in the feasibility stage, they expect to supply hydrogen to local industrial Offtakers.

Meanwhile, in July, BP acquired a 49% stake in Oman’s 150 sq. km Hyport Duqm green hydrogen project, after signing an agreement with DEME and the state-backed energy company OQ. They expect that the plant will produce 57,000 tonnes of green hydrogen per year, and 650,000 tonnes of green ammonia by the second phase.

Oman also keeps a focus on In-Country Value (ICV), which refers to its support for industrial decarbonisation at home. That’s why Amnah, the consortium working on Oman’s first land block for green hydrogen (also including CIP, Al Khadra and Blue Power Partners), has revealed plans to use its clean hydrogen output in Duqm for green steel production.

Whether it’s ultimately for steel or ammonia production, all these clean hydrogen projects, along with others in the pipeline, are expected to create numerous jobs in pre-feed, development, construction, operations and maintenance spheres. Recently, I have had numerous requests from clients for candidates experienced in hydrogen production, including engineers specialising in electrolyser technologies, project developers for large-scale renewable energy installations, and experts in hydrogen storage and transportation. These roles are critical to the success of Oman’s ambitious clean energy projects and represent a growing demand in the region.

For those of you interested in further reading, I recommend taking a look at the recent report issued by the Paris-based International Energy Agency (IEA), titled Renewables 2024. The report confirms the likelihood that Oman – along with the United Arab Emirates and Morocco – will exceed its 2030 ambitions. Again, all the statistics and reports I’ve come across point to Oman firmly positioning itself as a central player in the green energy transition within the GCC.

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Onshore Wind for Domestic Needs

The same IEA report as I mentioned above, expects major investments in new onshore wind capacity in Oman and the wider MENA region to help support the generation of renewable electricity to meet fast-rising domestic demand. Around 4 GW of new onshore wind is anticipated to come online by the end of this decade, with Oman, Saudi Arabia and Egypt leading this effort.

Oman plans five wind-based Independent Power Projects (IPPs) with a generation capacity totalling roughly 1 GW. Renewable electricity from these IPPs will be connected to the national grid to supply domestic consumers, and not for use in green hydrogen production.

After all, the country must also consider its continued population and economic growth, and the necessity of energy-intensive technologies like air conditioning and other necessities.

Nama Power and Water Procurement Company (PWP) has invited bids for these five projects, which are expected to become operational by 2027 and will require investments of $1.18bn (1.09bn). The biggest of the five is the Mahoot I, located in Mahoot Province, Wusta Governorate, with a planned capacity of up to 400 MW.

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Oman’s Large-Scale Solar Plans

At the start of 2024, a consortium of EDF Renewables and Korea Western Power Corporation announced that it had reached financial close on Manah 1, a 500 MW plant located 175 km south of Muscat. This grid-connected project should be able to power 50,000 Omani households with clean energy, while offsetting 700,000 tonnes of CO2 annually.

Wadi Noor Solar Power Company is now leading the project, with installation starting in July. Bifacial PV modules, supplied by JA Solar, are mounted on automated single-axis trackers in order to optimise power generation at different times of the day. I like the sound of Manah, as it applies some clever innovations like automatic cleaning robots.

I look forward to seeing commercial operations kick off in the first quarter of 2025. As someone deeply involved in recruitment within the renewable energy space, it’s exciting to see how innovations like these are not only shaping the future of energy in Oman but also creating new job opportunities. I’ve already started connecting clients with talent for roles in operations, engineering, and maintenance, ensuring the workforce is ready when these projects go live. I look forward to seeing even more commercial operations kick off in the first quarter of 2025.

Shortly after the Manah 1 close, PWP issued a request for qualification (RFQ) for the 500MW Ibri III project in the sultanate’s northwest region; it has since selected nine applicants. This $400 million solar park is expected to cover 10 million square metres, with commercial operations beginning at the end of 2026.

What these projects have in common is that while hardware is typically sourced internationally, there is a concerted effort to use local goods and services. The target is 20% in-country value (ICV) during EPC (Engineering, Procurement, and Construction) phases. It’s important that these projects benefit Omanis, involve local people and provide domestic training and supply chain opportunities. We see a similar focus on community promotion and improvement in Abu Dhabi, where our UAE HQ is based. One of our key clients, ADNOC (Abu Dhabi National Oil Company), places a major emphasis on maximising local engagement, with the ICV program ensuring that a significant portion of project value, often up to 50%, flows back into the UAE economy.