New mechanisms to bolster appeal of Oman’s Round 3 hydrogen auction
Published: 03:07 PM,Jul 15,2025 | EDITED : 07:07 PM,Jul 15,2025
Eng. Abdulaziz Al Shidhani, Managing Director - Hydrom
MUSCAT, JULY 15
Hydrom, the state-owned entity overseeing Oman’s green hydrogen strategy, has introduced a series of mechanisms and incentives aimed at generating stronger investor interest in the third round of auctions for green hydrogen development blocks.
Launched in April 2025, Round 3 centres on a 300 sq km land block in Duqm. Prospective developers may bid for a minimum of 100 sq km, with the flexibility to define their project footprint within the block. This approach allows bidders to tailor configurations in line with their strategies and market outlook.
According to Abdulaziz al Shidhani, Managing Director of Hydrom, the latest round has been designed with enhanced flexibility to better align with investor expectations.
“We offered a 300-square-kilometre block where bidders can propose developing a third, two-thirds, or the entire area, depending on their capabilities. We can award the land to one, two, or three developers. Strategically, the message is that Oman is committed yet agile,” he told The Energy Year, a UK-based energy news portal.
Crucially, Hydrom has embedded several new features into the auction process to elicit a stronger investor response. “We’re introducing mechanisms such as a double-sided auction with a contract-for-difference model, and a downstream auction aimed at domestic industry,” Al Shidhani explained.
“These initiatives are designed to stimulate local hydrogen demand by bridging the price gap between suppliers and buyers. We’re also allowing phased project development. Instead of delivering the full 50,000 tonnes per year within seven years, developers can start small and scale up.”
Additional incentives—yet to be disclosed—will reward developers that meet specific milestones, he noted. “Importantly, only 4 per cent of Oman’s 50,000-square-kilometre hydrogen potential has been allocated so far. We’re serious about scaling but also balanced about risk,” he added.
While optimism surrounds the auction, Al Shidhani acknowledged ongoing challenges facing the global hydrogen industry, such as political transitions and policy delays in key markets including Germany and Japan.
One critical challenge being addressed by Hydrom is the imbalance between global hydrogen supply and demand. “We’re tackling this through government-to-government agreements with Japan, South Korea, Germany, the Netherlands, Belgium, and Singapore,” he said. “These aren’t just MoUs—we conduct workshops, run joint studies, and have launched the world’s first liquid hydrogen corridor with partners in Germany and the Netherlands.”
Domestically, Hydrom is also focusing on building a viable local market for hydrogen. “We’re exploring downstream applications and support tools like the double-sided auction model to make green hydrogen affordable for local industries without undermining competitiveness,” he said. “We’re not waiting for perfect conditions—we’re pushing ahead with real engagements and infrastructure planning.”
Also aiding investor convenience is a streamlined permit system that consolidates approvals across multiple government agencies. “We had a major breakthrough with the single automatic permit system,” Al Shidhani said. “Previously, developers needed clearances from 36 entities. That’s now down to just nine. Through the newly launched Oman platform, once a project is approved, developers receive access to all requirements, and full land access is granted the next day. This automated system has dramatically reduced administrative bottlenecks.”
While underscoring Hydrom’s central role in orchestrating Oman’s green hydrogen ambitions, Al Shidhani emphasized that the success of the sector depends on collective action.
“Hydrom remains the coordinator, but success hinges on ecosystem partners delivering on their responsibilities,” he said. “We expect our first hydrogen plant to be operational between 2029 and 2031.”
Hydrom, the state-owned entity overseeing Oman’s green hydrogen strategy, has introduced a series of mechanisms and incentives aimed at generating stronger investor interest in the third round of auctions for green hydrogen development blocks.
Launched in April 2025, Round 3 centres on a 300 sq km land block in Duqm. Prospective developers may bid for a minimum of 100 sq km, with the flexibility to define their project footprint within the block. This approach allows bidders to tailor configurations in line with their strategies and market outlook.
According to Abdulaziz al Shidhani, Managing Director of Hydrom, the latest round has been designed with enhanced flexibility to better align with investor expectations.
“We offered a 300-square-kilometre block where bidders can propose developing a third, two-thirds, or the entire area, depending on their capabilities. We can award the land to one, two, or three developers. Strategically, the message is that Oman is committed yet agile,” he told The Energy Year, a UK-based energy news portal.
Crucially, Hydrom has embedded several new features into the auction process to elicit a stronger investor response. “We’re introducing mechanisms such as a double-sided auction with a contract-for-difference model, and a downstream auction aimed at domestic industry,” Al Shidhani explained.
“These initiatives are designed to stimulate local hydrogen demand by bridging the price gap between suppliers and buyers. We’re also allowing phased project development. Instead of delivering the full 50,000 tonnes per year within seven years, developers can start small and scale up.”
Additional incentives—yet to be disclosed—will reward developers that meet specific milestones, he noted. “Importantly, only 4 per cent of Oman’s 50,000-square-kilometre hydrogen potential has been allocated so far. We’re serious about scaling but also balanced about risk,” he added.
While optimism surrounds the auction, Al Shidhani acknowledged ongoing challenges facing the global hydrogen industry, such as political transitions and policy delays in key markets including Germany and Japan.
One critical challenge being addressed by Hydrom is the imbalance between global hydrogen supply and demand. “We’re tackling this through government-to-government agreements with Japan, South Korea, Germany, the Netherlands, Belgium, and Singapore,” he said. “These aren’t just MoUs—we conduct workshops, run joint studies, and have launched the world’s first liquid hydrogen corridor with partners in Germany and the Netherlands.”
Domestically, Hydrom is also focusing on building a viable local market for hydrogen. “We’re exploring downstream applications and support tools like the double-sided auction model to make green hydrogen affordable for local industries without undermining competitiveness,” he said. “We’re not waiting for perfect conditions—we’re pushing ahead with real engagements and infrastructure planning.”
Also aiding investor convenience is a streamlined permit system that consolidates approvals across multiple government agencies. “We had a major breakthrough with the single automatic permit system,” Al Shidhani said. “Previously, developers needed clearances from 36 entities. That’s now down to just nine. Through the newly launched Oman platform, once a project is approved, developers receive access to all requirements, and full land access is granted the next day. This automated system has dramatically reduced administrative bottlenecks.”
While underscoring Hydrom’s central role in orchestrating Oman’s green hydrogen ambitions, Al Shidhani emphasized that the success of the sector depends on collective action.
“Hydrom remains the coordinator, but success hinges on ecosystem partners delivering on their responsibilities,” he said. “We expect our first hydrogen plant to be operational between 2029 and 2031.”