Hydrogen-powered green future awaits Oman
Published: 09:02 AM,Feb 28,2023 | EDITED : 01:02 PM,Feb 28,2023
A critical milestone in Oman’s nascent green hydrogen journey was marked on February 26, 2023 when His Majesty Sultan Haitham bin Tarik issued Royal Decree 10/2023 effectively laying the bedrock of a new regulatory framework governing the development of large-scale renewables and green hydrogen projects in the Sultanate of Oman.
In essence, the Royal Decree empowers Hydrogen Oman (Hydrom), an independent entity regulated by the Ministry of Energy and Minerals, to exercise its broad mandate in overseeing the delivery of the Omani government’s vision for a green hydrogen industry to power the nation’s future decarbonized economy.
As part of that remit, Hydrom has been tasked with master planning the sector, delineating government-owned land areas for green energy projects, structuring associated large-scale green hydrogen projects, managing the process for their allocation to developers and overseeing their execution as well as facilitating the development of common infrastructure, connected ecosystem industries and hubs.
Given the complete novelty of the new economic industry in question, the Ministry of Energy and Minerals has also been mandated to draft supporting guidelines to underpin and nurture the growth of this industry sustainably and in line with Oman’s Vision 2040 priorities.
Royal Decree 10/2023 delivers on a pledge by authorities, articulated during the Green Hydrogen Summit Oman 2022 forum held last December, that foundational legislation identifying the powers and prerogatives of key stakeholders in the green energy space, notably the Ministry and Hydrom, would be issued before the end of the first quarter of this year.
The Ministry is expected to follow suit with Executive Regulations that will provide further clarity on the finer legal, transactional and policy specifics encompassing all aspects of this emerging industry. Together, the two frameworks provide robust legal comfort to foreign investors taking the plunge into Oman’s promising green hydrogen sector, say experts.
The next big milestone on Oman’s fast-paced decarbonisation journey is slated around the end of April when Hydrom announces the winners of its inaugural round of auctions of land blocks earmarked for large-scale green hydrogen projects. Up for grabs in this round is a pair of blocks each of about 320 sq kilometres in the Wilayat of Duqm in Al Wusta Governorate.
International investor interest in Oman’s green hydrogen programme has been strong, with as many as 180 parties having registered their particulars on Hydrom’s platform as of mid-January 2023. Of this number, more than 50 companies had collected a Request for Qualifications (RfQ) document, affirming their intent to participate in the auction process. An unspecific number have also since passed the qualification stage and are now actively working to put together their final offers – a response Hydrom has characterized as “encouraging and in line with initial expectations”.
The competitive auctioning process itself is subject to a compressed timeline – in part to harness a groundswell of investor interest in Oman’s green hydrogen industry, but also to position the Sultanate among the global frontrunners in this emerging sector. The deadline for the submission of firm proposals against the blocks on offer was recently extended to March 15, 2023. Offers will be evaluated against different criteria, such as project concept and feasibility, financial viability or bidders’ credentials.
The auction process has garnered global interest not least for the path-breaking approach adopted by Oman to attract international investors to bid for parcels of renewable resource-rich acreage via a transparent competitive tender process.
The winning consortium will secure long-term leases to sizable tracts of land to develop integrated projects covering the full green hydrogen value chain, encompassing solar and wind farms (upstream), production of green hydrogen through electrolysis (midstream) and a green energy end-product comprising either hydrogen, ammonia or derivative for domestic consumption or export.
Project implementation is envisioned in three distinct phases, encompassing Development, Construction and Production. During the development phase, spanning roughly three and a half years, the successful developer will start working on assessing the area’s solar and wind resources, embarking on their feasibility study, assessing permitting and bankability requirements and so on. Incentives have been incorporated into the process to encourage developers to move through the phases on to production.
Further, to incentivize the expeditious delivery of the development and construction phases, Hydrom has slashed land fees for the allocated block to just 20 per cent of the stipulated levy during the development phase. The fee is completely waived during the construction phase, ensuring sizable savings for the developer.
A second bid round targeting the auction of up to four additional land blocks, located in Thamrait (Dhofar Governorate), gets underway immediately after the award of the first round. These additional blocks are slated to be awarded before the end of 2023 with the goal of enabling the aggregate national production of at least 1 million tonnes per annum of green hydrogen annually starting from 2030. This targeted output, will necessitate investments to tune of around $30 billion primarily in installing around 20 gigawatts of renewable capacity and 10 gigawatts of electrolyzer capacity by 2030.
With a total of around seven years allotted for the development and construction phases, the first output of green hydrogen or its derivatives from the Round 1 blocks in Duqm is anticipated in 2030. And as successive blocks are awarded and developed, production is projected to rise to between 3.25-3.75 million tonnes per year in 2040 before climbing to a peak of 7.5-8.5 million tonnes per year by 2050.
A subsidiary of Energy Development Oman (EDO), Hydrom’s mandate includes the delineation of government-owned land areas and the structuring of associated large-scale world-class green hydrogen projects, managing the process for their allocation to developers as well as facilitating the development of common infrastructure and connected ecosystems in industries and hubs in close collaboration with the Public Authority for Special Economic Zones and Free Zones (OPAZ).
In essence, the Royal Decree empowers Hydrogen Oman (Hydrom), an independent entity regulated by the Ministry of Energy and Minerals, to exercise its broad mandate in overseeing the delivery of the Omani government’s vision for a green hydrogen industry to power the nation’s future decarbonized economy.
As part of that remit, Hydrom has been tasked with master planning the sector, delineating government-owned land areas for green energy projects, structuring associated large-scale green hydrogen projects, managing the process for their allocation to developers and overseeing their execution as well as facilitating the development of common infrastructure, connected ecosystem industries and hubs.
Given the complete novelty of the new economic industry in question, the Ministry of Energy and Minerals has also been mandated to draft supporting guidelines to underpin and nurture the growth of this industry sustainably and in line with Oman’s Vision 2040 priorities.
Royal Decree 10/2023 delivers on a pledge by authorities, articulated during the Green Hydrogen Summit Oman 2022 forum held last December, that foundational legislation identifying the powers and prerogatives of key stakeholders in the green energy space, notably the Ministry and Hydrom, would be issued before the end of the first quarter of this year.
The Ministry is expected to follow suit with Executive Regulations that will provide further clarity on the finer legal, transactional and policy specifics encompassing all aspects of this emerging industry. Together, the two frameworks provide robust legal comfort to foreign investors taking the plunge into Oman’s promising green hydrogen sector, say experts.
The next big milestone on Oman’s fast-paced decarbonisation journey is slated around the end of April when Hydrom announces the winners of its inaugural round of auctions of land blocks earmarked for large-scale green hydrogen projects. Up for grabs in this round is a pair of blocks each of about 320 sq kilometres in the Wilayat of Duqm in Al Wusta Governorate.
International investor interest in Oman’s green hydrogen programme has been strong, with as many as 180 parties having registered their particulars on Hydrom’s platform as of mid-January 2023. Of this number, more than 50 companies had collected a Request for Qualifications (RfQ) document, affirming their intent to participate in the auction process. An unspecific number have also since passed the qualification stage and are now actively working to put together their final offers – a response Hydrom has characterized as “encouraging and in line with initial expectations”.
The competitive auctioning process itself is subject to a compressed timeline – in part to harness a groundswell of investor interest in Oman’s green hydrogen industry, but also to position the Sultanate among the global frontrunners in this emerging sector. The deadline for the submission of firm proposals against the blocks on offer was recently extended to March 15, 2023. Offers will be evaluated against different criteria, such as project concept and feasibility, financial viability or bidders’ credentials.
The auction process has garnered global interest not least for the path-breaking approach adopted by Oman to attract international investors to bid for parcels of renewable resource-rich acreage via a transparent competitive tender process.
The winning consortium will secure long-term leases to sizable tracts of land to develop integrated projects covering the full green hydrogen value chain, encompassing solar and wind farms (upstream), production of green hydrogen through electrolysis (midstream) and a green energy end-product comprising either hydrogen, ammonia or derivative for domestic consumption or export.
Project implementation is envisioned in three distinct phases, encompassing Development, Construction and Production. During the development phase, spanning roughly three and a half years, the successful developer will start working on assessing the area’s solar and wind resources, embarking on their feasibility study, assessing permitting and bankability requirements and so on. Incentives have been incorporated into the process to encourage developers to move through the phases on to production.
Further, to incentivize the expeditious delivery of the development and construction phases, Hydrom has slashed land fees for the allocated block to just 20 per cent of the stipulated levy during the development phase. The fee is completely waived during the construction phase, ensuring sizable savings for the developer.
A second bid round targeting the auction of up to four additional land blocks, located in Thamrait (Dhofar Governorate), gets underway immediately after the award of the first round. These additional blocks are slated to be awarded before the end of 2023 with the goal of enabling the aggregate national production of at least 1 million tonnes per annum of green hydrogen annually starting from 2030. This targeted output, will necessitate investments to tune of around $30 billion primarily in installing around 20 gigawatts of renewable capacity and 10 gigawatts of electrolyzer capacity by 2030.
With a total of around seven years allotted for the development and construction phases, the first output of green hydrogen or its derivatives from the Round 1 blocks in Duqm is anticipated in 2030. And as successive blocks are awarded and developed, production is projected to rise to between 3.25-3.75 million tonnes per year in 2040 before climbing to a peak of 7.5-8.5 million tonnes per year by 2050.
A subsidiary of Energy Development Oman (EDO), Hydrom’s mandate includes the delineation of government-owned land areas and the structuring of associated large-scale world-class green hydrogen projects, managing the process for their allocation to developers as well as facilitating the development of common infrastructure and connected ecosystems in industries and hubs in close collaboration with the Public Authority for Special Economic Zones and Free Zones (OPAZ).