Oman Signs Major Continuous Renewables Power Deal to Slash Gas Dependence

Oman has signed a landmark power purchase agreement for a revolutionary continuous renewable energy project as the Gulf nation accelerates its drive to reduce dependence on natural gas for electricity generation.

Nama Power and Water Procurement the country’s sole electricity purchaser from independent power plants has awarded the contract to state-backed O-Green which specializes in designing building and operating energy facilities. The project represents a major breakthrough in renewable energy technology by combining wind solar and battery storage to deliver uninterrupted clean power to Oman’s national grid.

Unlike traditional renewable projects that face intermittency challenges this innovative scheme ensures continuous electricity production 24 hours a day. The hybrid approach addresses the fundamental weakness of standalone solar and wind power which typically cannot provide consistent energy supply during periods of low sun or wind conditions.

The Continuous Renewable Energy Project forms part of a broader 2.7 gigawatt renewable energy development spanning the strategic Mahout and Duqm coastal areas. This massive undertaking represents one of the largest renewable initiatives in Oman’s history and signals the nation’s commitment to transforming its energy landscape.

The project will play a crucial role in reducing Oman’s heavy reliance on gas-fired power generation while supporting planned industrial expansion in Duqm. The coastal city serves as a key logistics and industrial hub central to Oman’s ambitious green hydrogen production goals.

Oman has made remarkable progress in renewable energy deployment with clean sources now accounting for 9.5 percent of electricity production by the end of 2025 compared to just 2 percent in 2021. The country recently inaugurated the Manah 1 and Manah 2 solar projects with combined capacity of 1000MW alongside the 500MW Ibri II solar plant and the pioneering Dhofar Wind Farm.

The announcement coincides with Oman’s updated national net-zero strategy which sets an ambitious target to reduce greenhouse gas emissions by 33 percent by 2035 compared to 2024 levels. The enhanced strategy places greater emphasis on carbon markets and green hydrogen development while introducing regulatory frameworks to generate tradable carbon credits.

Currently natural gas accounts for approximately 90 percent of Oman’s electricity generation but the government aims to derive 30 percent of power from renewables by 2030. This transition is part of the country’s broader Vision 2040 economic diversification plan and commitment to achieve net-zero emissions by 2050.

The renewable energy push comes as Oman seeks to optimize its natural gas resources for higher-value applications including liquefied natural gas exports petrochemicals and industrial processes rather than domestic power generation. The government is also studying the establishment of a unified gas buyer for the electricity sector to improve planning and reduce inefficient consumption.

Oman’s Energy Development Oman recently secured a 1 billion dollar loan to fund renewable energy expansion while Hydrogen Oman is investing 20 billion dollars in green hydrogen projects. The country aims to produce 1 million tonnes of renewable hydrogen annually by 2030 rising to 8.5 million tonnes by 2050.

International energy companies are increasingly partnering with Omani entities on renewable projects. TotalEnergies recently signed agreements with OQ Alternative Energy to develop 300MW of solar and wind projects while major hydrogen developments involving BP Shell and other global firms represent over 30 billion dollars in committed investments.

The continuous renewable energy project marks a significant milestone in Oman’s energy transformation demonstrating how innovative technology combinations can overcome traditional renewable energy limitations while supporting the nation’s economic diversification and climate objectives.