Oil-Rich Oman Bets Big on Renewable Energy

Oman, a major oil and gas producer, plans to expand its renewable energy capacity as part of its energy diversification and green transition goals. The government recently introduced new national policies to expand Oman’s green energy and cleantech industries and to encourage private investment in the sector.This year, Oman’s Ministry of Energy and Minerals launched a revised net-zero emissions strategy and a carbon markets regulatory framework as part of the government’s aims to achieve net-zero carbon emissions by the mid-Century. Oman aims to become a major green hydrogen and renewable energy hub in the Middle East, to strengthen its energy security and enhance its trade position in the region.The Oman Centre for Net Zero, part of the Energy Ministry, will oversee the implementation of the plan and track progress on emissions. Oman’s Minister of Energy, Salim Al Aufi, emphasised the importance of adopting the new plan, calling it a strategic step towards a robust, sustainable, low-carbon economy that enhances Oman’s global standing in line with Oman Vision 2040.The new net zero pathway introduces economic and climate benefits for investors in green energy and cleantech. Meanwhile, the regulatory framework for carbon markets will support the plan’s implementation by establishing clear rules and streamlined procedures for private investors and small- and medium-sized enterprise participation. The growth of Oman’s renewable energy and cleantech industries is expected to support job creation and economic diversification.The government aims to reduce carbon emissions by 33 per cent by 2035. This will be achieved through greater energy diversification, the development of carbon capture and storage, and adaptation projects across seven key sectors. This will support the government in its aim of developing a strong carbon credit market.Oman will also continue to develop its oil and gas sectors, having announced a bidding round for five concession areas earlier in the year. Oman’s average crude and condensate production is around 1 million bpd, its gas output is over 151 million cubic metres a day, and its LNG exports are over 11 million metric tonnes, according to Al Aufi. The government aims to maintain its fossil fuel output in the coming years.Oman’s renewable energy sector has grown rapidly over the last decade, driven by the development of several large-scale solar and wind power projects. The Dhofar I wind farm was commissioned in 2019 in southern Oman, with a capacity of 50 MW.The 500-MW Ibri II solar project came online in 2021. The expansion of the Ibri solar farm is expected to be completed in 2027, with the incorporation of 100 megawatt-hours of battery storage. This is expected to enhance grid flexibility and support the integration of greater renewable energy capacity. A further two solar power stations with a combined capacity of 1 GW commenced operations in January 2025 in the Wilayat of Manah in the central province of Al Dakhiliyah.Oman plans to add around 5.7 GW of solar and over 2 GW of wind power, alongside 1 GW of battery storage, by the end of the decade. Adam Solar, a solar project equipped with battery storage in the Al Dakhiliyah Governorate, is expected to be connected to the grid by the first quarter of 2028. Meanwhile, three other 1 GW solar projects, Kamil Solar II, Dhofar, and Mahadah, are expected to come online in 2029 and 2030. The 500-MW Sinaw project has also been awarded to a consortium led by France’s EDF.The government also aims to develop the country’s pumped hydro storage capacity. The EDF Consortium’s Wadi Dhayka Hydro Pump project will use the existing Wadi Dhayka Dam as the lower reservoir and a new upper reservoir on the Jabal Abyad plateau. Wadi Dhayka will be capable of providing almost 1.98 GW of capacity and 17,970 MWh of storage over nine hours, by storing surplus solar and wind power and releasing it during peak demand to enhance grid stability and reduce reliance on fossil fuels.Oman also plans to develop its green hydrogen capabilities by constructing seven projects with a combined output of 1 million tonnes of green hydrogen per year by 2030, despite BP and a consortium including Engie and Pesco withdrawing from the projects. During the Green Hydrogen Summit Oman in December, Hydrom’s managing director, Abdulaziz al Shidhani, said that “less than three years after setting the framework, the programme has entered a phase of coordinated execution.” He added, “seven projects… are progressing through milestones.”Oman has ambitious plans to diversify its energy mix and establish itself as a green energy hub in the Middle East. In addition to oil and gas, Oman will develop its solar, wind, battery storage, pumped hydropower, and green hydrogen capabilities, supported by targeted national policies and regulations to help facilitate investment and development.By Felicity Bradstock for Oilprice.comMore Top Reads From Oilprice.comHigh Oil Prices Speed Up China’s Shift Away From CrudeHormuz Disruptions Could Drag Into Next Year, Japanese Tanker Giant WarnsRussia Says Oil Output Drop Is Temporary as Refineries Restart