Muscat – Oman’s high-quality renewable energy resources and vast tracts of available land make it well placed to produce large quantities of low-emissions hydrogen, according to a new report released by the International Energy Agency (IAE) on Monday.
A fledgling industry today, Oman’s green energy sector can attract investments to diversify and expand the country’s export revenues while reducing its natural gas consumption and emissions, the report further stated.
IEA executive director Fatih Birol presented the new report – ‘Renewable Hydrogen from Oman: A Producer Economy in Transition’ – to H E Eng Salim Nasser al Aufi, Oman’s Minister of Energy and Minerals during a roundtable meeting with senior IEA leaders and analysts at the agency’s headquarters in Paris.
It is the first IEA report of its kind that analyses renewable hydrogen potential in a fossil fuel producing country. The analysis builds on the agency’s ongoing technical cooperation with Oman to support the country’s clean energy transition.
H E Aufi said that 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 aims to produce at least 1mn tonnes of renewable hydrogen a year by 2030, 3.75mn tonnes by 2040 – and up to 8.5mn tonnes by 2050. If achieved (8.5mn tonnes per year), it would be greater than the total hydrogen demand in Europe today.
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.
“Oman is an oil and gas producing country that is taking an enlightened approach to its energy future, with a clear long-term vision and strong net zero ambitions,” said Birol.
“Thanks to its huge potential for low-cost solar and wind, renewable hydrogen is set to bring multiple benefits to Oman.”
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.
In 2022, Oman announced a target to achieve net zero emissions by 2050 and began reducing fossil fuel use in its domestic energy mix.
Based on IEA analysis of the current global project pipeline, Oman is on track to become the sixth largest exporter of hydrogen globally, and the largest in the Middle East, by 2030.
Oman is 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.
So far, 1 500sqkm of land has been put aside for development by 2030 – and up to 40 times more land has been identified for potential production in the long term. Six projects have already been allocated land for renewable hydrogen in the country’s first such auction process.
Scaling up production of renewable hydrogen in Oman to 1 million tonnes by 2030 would require cumulative investment of around US$33bn.
An additional US$4bn would be required to bring renewables’ share of the national electricity mix to 20%, the report says.
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 3bn cubic metres a year and avoiding 7mn tonnes of carbon dioxide emissions.