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H.E. Mohammed bin Abdullah Al Mahrouqi speech at the Renewable Energy Series

Oman American Business Council (OABC) > H.E. Mohammed bin Abdullah Al Mahrouqi speech at the Renewable Energy Series

Ladies and gentlemen,

Welcome all to this important event.  I would like to thank the Oman American  Business Center for its generosity in hosting this event and inviting me to share with you the recent developments in Renewable in Oman. Renewable energy will doubtless play an increasing role in our energy future and the high level of interest and the many Omani and international companies and organizations represented here bodes well for progress in this important field here in Oman.

I am sure you will agree that we are at an exciting time for renewable energy – the costs of renewable technologies have been falling steadily for as long as I can remember but recent events in the region have shown remarkable reductions and demonstrate that renewables can now compete directly with other sources of electricity at the utility scale.  In the UAE we have recently seen an exciting large scale Concentrating Solar Power project successfully tendered at a price of 7.3 US cents per kWh and in Saudi Arabia a 300 MW photovoltaic project recently achieved a remarkable 1.78 US cents per kWh. These prices – if they are sustainable – move renewables into the mainstream and demonstrate that it is possible to significantly increase the use of renewable energy in our power system without a similar increase in the requirement for subsidy.

We are already making steps to introduce renewable generation into the mainstream.

As far as solar energy is concerned, a number of initiatives are already in hand:

  • The original 2008 AER Study highlighted the significant potential for Solar energy in the North and Central areas of the country as well as for Wind – mainly in the South;
  • The OPWP has already conducted a feasibility study for a major solar electricity project and we expect that a tender for the first utility scale project – which could be as large as 500MW capacity – will be released by the end of the year;
  • With IRENA, PAEW has conducted a Renewable Readiness Assessment study for Oman reviewing the state of our institutional frameworks and their suitability for renewable development;
  • We have supported a Strategic Program for Renewable Energy Research and Capacity building; and
  • The Rural Areas Electricity Company – RAECo – has embarked on 5 renewable energy pilot projects at its facilities with total generating capacity of 6 MW and a 303 KW solar project has been successfully operational at Mayzama since 2015. Now, given the potential economic attractiveness of renewable energy, particularly in remote locations where the alternative fuel is generally high-cost diesel oil, the AER has mandated RAECo to examine a renewable alternative for all new capacity projects and the whole electricity sector is gearing up in the same direction.
  • AER recently issued technical regulations to allow the connection of small scale PV installations to the local electricity networks and are currently in the process of developing economic incentives for the roll out of small scale PV and to facilitate exports of surplus electricity to the grid.
  • We are already seeing small scale renewable projects come forward – for example PDO has introduced “solar parking” at its HQ buildings and at some of its other locations and Shell are developing a “solar schools” initiative across the Sultanate and I am sure this will now accelerate with the extra support measures that are coming into place.

To elaborate more in some of these initiatives, as far back as 2008, in coordination with an international consultant, the Authority for Electricity Regulation completed a comprehensive assessment of renewable energy resources in Oman. As well as a significant wind energy resource, Oman’s solar energy density is one of the highest in the world, representing a significant energy resource for our future.

PAEW has also supervised development a range of enabling projects, studies and initiatives aimed at establishing the foundations for sustainable and comprehensive policy in Renewable Energy field.  This includes a project to develop a comprehensive wind atlas of our resources which has further reinforced the potential for a major contribution to generation from this source by 2030.

Many of you will already be aware that the Sultanate has concluded a study looking at the development of a National Energy Strategy.  Recognizing the large renewable resource with which we have been blessed in Oman, and the fact that the cost of renewable energy – particularly from solar and wind where our resource is particularly strong – has been falling rapidly over recent years the study recommended that Oman should set a target of securing at least 10% of the total energy used in electricity production from renewable sources and the study also foresaw the possibility of raising the renewable contribution to 35% of power generation by  2040.  Oman has also made international commitments under the Paris Agreement to control emissions of greenhouse gasses and renewable energy will doubtless play an important part in meeting these.

As a result, the Government has now adopted a firm policy aimed at reaching a minimum level of renewable penetration of 10% of electrical energy production by 2030.  Meeting this target equates to something around 4GW of new renewable generation capacity over the next 12 years but if prices continue to fall there is no reason why even this ambitious target could not be surpassed.

This step change in our generation mix represents a once-in-a-generation opportunity to build significant capacity in the country in the form of both industrial and human resources.  The fact that many renewable energy opportunities will be relatively small scale – for example installing solar panels on domestic buildings and sunshades – means that there will be many opportunities for SMEs and individual entrepreneurs to play an important part in this development.  In addition, the banking sector will be able to innovate and develop new financing models and products in order to respond to the demand for finance for these facilities.

So, I think we are standing at the threshold of a new era for electricity generation here in Oman, an era where we will see sustainable renewable sources play an increasing and important role both at the utility scale and at the individual building level.  I am sure that the effort and dedication of those parties represented here will be an important element in that era and I thank you for your participation and wish you a fruitful and successful workshop.

Thank you.