Oman’s Search for Renewable Energy Sources
In a region better known for oil, the Middle Eastern nation is beginning to look for alternatives
Perched over the Strait of Hormuz and above the 17 million oil barrels that sail through it each day, the Sultanate of Oman is something of a regional outlier. Nestled among a cluster of hydrocarbon-producing heavyweights, Oman might appear unlikely as a burgeoning champion of renewable energy. Yet the Middle Eastern nation is embarking on a search for new sources to fuel the country’s future energy needs.
Photo by GlassPoint Solar
For decades, the Gulf Cooperation Council (GCC) countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates — have financed ambitious programs for urban development and modernization via enormous oil and gas revenues. Collectively, these states possess roughly a third of proven global oil reserves. They are also six of the thirteen worst per capita CO2 emitters in the world, each producing more carbon dioxide per person than the United Kingdom, Russia, or China.
Oman cannot, however, rely on the same fossil fuel resources as its opulent neighbours. For starters, Oman’s oil stocks pale in comparison to the GCC giants: it would take 50 Oman’s to eclipse Saudi Arabia’s cache of existing crude stocks. Oil reserves in Oman are generally more difficult to access, more expensive to exploit, and are also likely to run dry within 40 years (while emirates like Abu Dhabi are expected to be able to produce for another century).
Oman’s gas policy is also unsustainable. Gas accounts for 97.5 percent of the country’s fuel used for power generation. Despite possessing vast quantities of natural gas, domestic needs regularly outstrip production. As a result, the government is forced to import billions of cubic meters of gas from Qatar each year to cover a national deficit.
Additionally, the country’s growing population, which is both youthful and well educated, is driving demand for new housing developments and increased living standards. This is placing greater strain on the national power grid and leading to widespread blackouts. Indeed, in 2014, the power system in Oman’s second largest city of Salalah — serving roughly 350,000 people — experienced a total system blackout for almost five hours. Similar blackouts occur more regularly in regional areas reliant on diesel generators, which account for the remaining 2.5 percent of fuel used for electricity production. To meet expected demand, the system that supplies 90 percent of the country’s electricity will need to source an additional 25 billion cubic feet of gas in 2017 — that is, if Oman is unable to develop and utilize new sources of renewable energy.
As a result, Oman seems to be turning a corner, and is now showing encouraging signs of progress in the renewables space. Oman is a signatory to the Kyoto Protocol and, unlike neighbouring Saudi Arabia, it signed up to the Paris Agreement well before the convention took effect in Marrakesh in November 2016.
Research has been at the forefront of the country’s renewable energy efforts to date. A 2008 study, commissioned by Oman’s Authority for Electricity Regulation, found that solar and wind power offer the greatest potential as renewable sources for electricity generation. Biofuels like agricultural waste and biogas from animals offer limited potential due to their scarcity and expense to capture. Oman’s water temperature in underground boreholes is too cool for geothermal electricity production, and the country’s coastline lacks sufficient wave energy to generate electricity. Oman is now sensibly pursuing solar and wind technology prospects with gusto.
Oman has some of the best solar potential in the world. While the entire Arabian Gulf is well positioned to capitalize on high levels of solar irradiation, Oman is actually better placed than many of its neighbours. It receives, on average, 18 to 20 percent more solar kilowatt-hours per square meter than Bahrain, Kuwait, Qatar, and large parts of Saudi Arabia and the United Arab Emirates. Oman’s high ratio of “sky clearness” at roughly 342 days per year, along with its high solar irradiation, means it receives one of the highest solar energy densities in the world.
Harnessing powerful solar yields in the summer months would dramatically reduce the chance of blackouts by easing pressure on the power grid, which comes under peak strain in July and August due to air conditioner use. Moreover, as a result of declining installation costs, utility-sized photovoltaic solar plants are now financially competitive with gas-fired thermal generation in Oman’s highest solar irradiation sites. Small-scale solar installations could also supplement diesel power generation in many households in non-urban areas, further reducing CO2 emissions.
According to Aisha Al-Sarihi, a research officer with the London School of Economics and Political Science’s LSE Kuwait Programme, a multidisciplinary research program, the growth of large-scale solar projects in recent years is a promising sign that Oman is serious about increasing solar-powered electricity generation. She says that since 2014, more than four large-scale solar power pilot projects have been initiated to assess the technical and economic feasibility of solar technologies in Oman, adding “these projects represent different types of technologies, as well as a diversity of actors involved in their implementation.”
However, while much of Oman may be highly suitable for exploiting solar energy, the key challenge is identifying where promising conditions and commercial viability converge. Oman’s government heavily subsidizes electricity derived from burning fossil fuels. Electricity tariffs have been in place since the 1980s, meaning consumers only pay 54 percent of the cost to produce electricity; the government makes up the difference. Oman’s artificial electricity prices are therefore among some of the lowest in the world, which significantly impedes development and implementation of solar power electricity options to take over from gas-fired plants.
Oman’s wind energy prospects also offer strong potential. Particularly good wind resources exist in the southern and eastern areas of the country: recorded wind speeds in these locations compare to speeds in European sites where commercial wind-power projects already operate successfully. Studies show that 375 mega-watt wind turbine installations in Qairoon Haititi and Thumrait (two promising locations in southern Oman) could produce 2.3 terra-watt hours of electricity per year alone, equating to roughly 16 percent of Oman’s electricity needs. Unfortunately, wind energy is similarly forced to compete with artificially low electricity prices. Studies show that Oman’s best wind sites will not be competitive against gas-generated electricity until gas prices are at least three times higher than they are now.
The subsidization of electricity is the primary barrier to greater renewable energy access across Oman. The government is unlikely to rollback electricity subsidies because it believes the provision of cheap electricity is essential to social, commercial, and industrial development — key principles enshrined in the state’s ‘2020 Vision.’ Other challenges include a lack of policy coordination and a sluggish response to renewable energy opportunities: universities, rather than the government, lead most research activities and the government is yet to establish a national renewable energy strategy, which would strengthen research and development in the sector.
Al-Sarihi identifies the lack of coordination between actors as a key factor impeding Oman’s renewable energy progress. “The development of renewable energy in Oman is still nascent,” she says. “This can be traced to the low quality of information coordination between renewable energy experts and policy makers,” she adds, emphasizing that greater political will is needed. Al-Sarihi also highlights a lack of effort among renewable energy developers to “collaborate and exchange information, knowledge and experience,” which she suggests is a missed opportunity for the sector to maximize the benefits of existing projects.
Nevertheless, hopes for a more sustainable energy future are emerging. Oman is actively driving economic diversification away from oil related-revenue through private investment and the government has committed to increasing renewable’s share of total electricity production to ten percent by 2020. The government has approved multiple renewables projects, ranging from a 50 mega-watt wind power project partnering with Abu Dhabi’s renewable energy company Masdar, to a 200 mega-watt solar power and photovoltaic project pegged for the Dakiliyah Governorate in central Oman. In 2015, over 100 stakeholders from the energy industry, academia, and government gathered to draft the ‘Oman Energy Master Plan 2040,’ which recommended “establishing a dedicated energy ministry that is responsible for renewable energy.” While the ministry is not yet active, plans are underway to broaden the remit of Oman’s Ministry for Oil and Gas to include renewables, which currently fall under the Authority for Electricity and Water. Oman is also leveraging its incredible natural geography to promote tourism as a key pillar of its future renewable growth plans: green and eco-tourism projects are now garnering significant attention.
According to The International Renewable Energy Agency, if the government can achieve its ambitious yet much-needed commitment to renewable energy diversification, Oman will play its part in helping the GCC to save 23 metric tons of carbon emissions and 60 million barrel-of-oil equivalents of burned fossil fuels by 2020. By then, five-hour blackouts may finally be a thing of the past.