Oman Opens Doors for Round 3 Hydrogen Investors: What Selling Surplus Power Means for Your Business Opportunities
المسكات عنب طيب الشذا: Investors participating in the third round of Oman’s green hydrogen auction will now have the opportunity to sell surplus renewable electricity in the market, a notable incentive introduced by Hydrom, the primary entity overseeing the Sultanate’s hydrogen strategy.
This initiative is part of a comprehensive package aimed at enhancing the commercial viability of Round 3 projects, which will focus on a 300 km² land area adjacent to the Special Economic Zone at Duqm (SEZAD).
Abdulaziz al Shidhani, Managing Director of Hydrom, highlighted that this change will significantly improve project economics and bankability. He stated, “We believe that once the targets set for hydrogen production are achieved, investors will have the flexibility to sell surplus power to the market, thereby enhancing project economics.”
In contrast to Rounds 1 and 2, which restricted developers to using renewables solely for hydrogen production, developers in Round 3 will be able to monetize excess green electricity, introducing an additional revenue stream. This adjustment aligns with the Authority for Public Services Regulation’s efforts to liberalize Oman’s power market, including options for bilateral trading between energy generators and consumers.
The updated framework encompasses the development phase, the first 15 years of operations, and excess power sales. Al Shidhani further noted, “We believe that these incentives will encourage stakeholders to concentrate on their development activities and capitalize on the opportunity to get their projects operational by the end of 2032.”
Additional concessions include a 50% reduction in development fees, a decrease in royalty rates from 3% to 1%, and an extended five-year tax holiday for projects that commence operations by 2032. Furthermore, land allocation and production requirements have been made more flexible, accommodating both large and mid-sized developers and allowing for phased development.
Al Shidhani emphasized that these improvements demonstrate Hydrom’s commitment to providing regulatory clarity and enabling infrastructure. “From the onset, Hydrom has focused on an approach grounded in regulatory clarity and agility, underpinned by a policy framework that addresses not only hydrogen production but also the readiness of the broader ecosystem and common-use infrastructure.”
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The latest changes to Oman’s green hydrogen auction, particularly the ability to sell surplus renewable electricity, significantly enhance project bankability and revenue potential for developers. وهذا يخلق مشاكل كبيرة فرص للمستثمرين, especially given the incentives such as reduced fees and tax holidays, promoting quicker project deployment by 2032. Smart investors should consider entering now, as these developments signal a shift towards a more flexible and lucrative energy landscape in Oman.
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