Oman allows Round 3 hydrogen investors to sell surplus power

MUSCAT: Investors in the third round of Oman’s green hydrogen auction will be permitted to sell surplus renewable electricity into the market, a significant incentive unveiled by Hydrom, the master planner of the Sultanate’s hydrogen strategy.
The measure is part of a new package designed to boost the commercial viability of Round 3 projects, centered on a 300 km² land block near the Special Economic Zone at Duqm (SEZAD).
Hydrom Managing Director Abdulaziz al Shidhani said the change will improve project economics and bankability. “We believe that once the targets set for the production of hydrogen are met, then investors have the flexibility to sell surplus power to the market and improve the project economics,” he stated.
Unlike Rounds 1 and 2, which restricted developers to using renewables exclusively for hydrogen production, Round 3 developers will be able to monetize excess green electricity, creating an additional revenue stream. The move also dovetails with the Authority for Public Services Regulation’s push to liberalize Oman’s power market, including options for bilateral trading between generators and consumers.

The updated framework spans the development phase, the first 15 years of operations, and surplus power sales. “We believe that these incentives...will incentivize people to be more focused on their development activities and leverage the opportunity to get their projects operational by the end of 2032,” added al Shidhani.
Other concessions include a 50% reduction in fees during development, a cut in royalty rates from 3% to 1%, and an additional five-year tax holiday for projects starting operations by 2032. Land allocation and production requirements have also been made more flexible, with options for both large and mid-sized developers, as well as phased development.
Al Shidhani stressed that the enhancements reflect Hydrom’s commitment to regulatory clarity and enabling infrastructure: “Since the beginning, Hydrom has been focused on an approach based on regulatory clarity and agility, supported by a policy framework that addresses not only hydrogen production, but also the readiness of the wider ecosystem and common-use infrastructure.”