Green Economy

Keen on Green

Renewable Energy investment

Population growth and the expansion of heavy industry have put a strain on Oman's power infrastructure and, by extension, its oil and gas reserves, leaving Oman with the need to pursue other sources of energy.

According to the US Energy Information Administration (EIA), whilst Oman has proven oil reserves of 5.37 billion barrels (as of January 2017), and proven natural gas reserves of 24 trillion cubic feet (as of January 2016), neither resource is as easily accessible or as large as those of its neighbors Saudi Arabia, Kuwait, the UAE, and Qatar. With a predicted lifespan of only 40 years, the government is currently faced with the question of what will replace these valuable sources of energy when they run out.

On one hand, Oman oil fields are using pioneering oil extraction technologies to maximize the amount of recoverable oil, therefore extending the life of these reserves. In 2015, Petroleum Development Oman (PDO), the largest producer of oil and gas in Oman, and GlassPoint Solar, the leader in solar enhanced oil recovery (EOR), announced plans to build one of the world’s largest solar plants. The 1.021-GW thermal facility in south Oman will harness the sun’s rays to produce steam which will then be used in thermal EOR to extract heavy and viscous oil at the Amal oil field.
On the other hand, 44% of Oman’s natural gas production is exported, 22% is used to power oil extraction, and the remaining 34% is consumed locally for utilities and industry, resulting in domestic demand consistently outstripping production. As a result, Oman is currently importing natural gas from Qatar through the Al-Ain—Fujairah pipeline, which has a capacity of 20 billion cbm per annum, just to maintain electricity generation.
Given the evident need to diversify and reduce dependency on oil and natural gas, in 2007 Oman created the Ministry of Environment and Climate Affairs, making it the only country in the region with a dedicated ministry to tackle this subject. With a royal decree and a vision promulgated under Sultan Qaboos bin Said Al Said’s Vision 2020 to produce 10% of its total electricity requirement from renewable energy sources, it is clear that Oman has serious intentions to invest heavily in the development of its renewable energy capacity over the coming years.
Solar power is especially attractive as Oman has one of the highest solar energy densities in the world. In 2017, the Authority for Electricity Regulation (AER) announced a solar scheme, the Sahim Plan, aimed to slash the current OMR500 million (USD1.3 billion) annual electricity subsidies as solar supplies increase. According to Qais Al Zakwani, Executive Director of AER, the scheme consists of allowing homeowners to set up solar panels on their rooftops, generate electricity for their own usage, reduce their dependency on the grid, and sell excess solar power back to the national grid.
In addition, the Chinese firm Ningxia Zhongke Jiaye New Energy and Technology Management Company signed an MoU with the Oman Investment Fund for a USD94-million solar panel venture in the Duqm Special Economic Zone. In the first phase, the proposed company plans to produce solar panels that can generate 400MW of energy per annum, which will be increased to 1,000MW in the second phase. The company also anticipates USD215 million in sales revenue per annum in its first phase.
In regards to eolic sources of energy, Oman’s first large-scale, commercial wind project is expected to begin operations in 2020. According to the seven-year outlook for the power and water sector released by the Oman Power and Water Procurement Company (OPWP), the project will consist of a 25-turbine wind farm near Harweel in Dhofar. It will be built by state-owned Rural Areas Electricity Company (RAECO) in partnership with Abu Dhabi’s Masdar, and is expected to generate 50MW of electricity. No longer wishing to be dependent on natural gas imports and increasing energy demands have Oman making serious moves toward renewable sources.

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