Potential, cost and scale for deep decarbonisation of Oman's grid

#Oman?is the largest?#oil?and?#fossilgas?producer in the?#MiddleEast?that is not a member of the?OPEC.

Like many countries in the region, it is highly dependent on its?#hydrocarbon?sector. In 2021, it accounted for 32% of GDP and its share is only likely to increase in 2022 due to higher oil and gas prices and export volumes.?

#Gas?has been a major export since the 2000s and surpasses 550 petajoules (PJ)/year, equivalent to 521 billion cubic feet (Bcf)/year (i.e. a fully loaded Q-Max carrier every 4 days). The country's own energy matrix is also very reliant on natural gas, with some 600 PJ (570 Bcf) consumed within the country every year,?of which some 310 PJ (294 Bcf) are consumed in the production of electricity into the local?#powergrid.?

In 2021, the country's total electricity demand reached ~34.6 TWh, with instant peak demand probably at 6.8 GW, taking place around July. The overall opportunity cost of producing all that electricity is estimated at USD$93/MWh, based on an opportunity cost of gas of USD 8/MMBtu. The resulting grid carbon intensity is 423 kgCO2e/MWh.

Expansion of non-oil sectors is a major element of the country’s economic diversification plan which looks to build a sustainable, diverse economy. One of the?#OmanVision2040?priorities is to reduce carbon emissions. Luckily, the country is blessed with good quality solar and wind resources.

So, what would take to reduce the Omani grid`s?#carbonintensity?by 90% with?#renewableelectricity, from onshore?#wind?and?#pvsolar?farms firmed up by?#energystoragesystems??

It all depends on the roundtrip?#efficiency?and build cost of the?#storagesolution?you pick.

If we work from the assumption?#wind?and?#solar?hubs are developed and coupled with a highly efficient storage solution like?#lithiumionbatteries?(LFP type) as per Pacific Northwest National Laboratory's parameters for 2030, that could be achieved by coupling 9.5 GW of?#windfarms?with 9.5 GW of?#solarfarms?and 29.8GWh of 3.0 hours deep storage. Doing so would increase the overall opportunity of electricity to US$117/MWh, meaning that this deep decarbonisation pathway for the grid would be feasible if those planning the?#powersytem?were subject to a carbon penalty of ~US$64/tCO2e.

If we work from the assumption a similar offshore wind fleet is coupled with a less efficient but ultra?#deepstorage?solution like?#hydrogenstorage?systems based on hypothetically available?#saltcarverns, the same could be achieved by coupling 10.5 GW of?#windfarms?with 10.2 GW of?#solarfarms?and 50.8GWh of 4.1 hours deep storage. Doing so would increase the overall opportunity of electricity to US$152/MWh, meaning that this decarbonisation pathway for the grid would be feasible under a carbon penalty or?#carbontax?of ~US$156/tCO2e.

The 50.8GWh of?#H2?energy storage capacity is an estimate of net recoverable energy needs, and translates to some 92GWh / 2.2ktH2 in closed loop raw gaseous storage.

The total upfront capital investment required is estimated at USD 32 to 44 billion and probably need to be spread across 5 to 10 years for full deployment. For context and comparison, Oman's gross fixed capital formation was reported at USD 21 billion in 2020 and peaked at USD 28 billion back in 2018.

Detailed calculations can be found here.

In both cases assessed, some 10-13 TWh of surplus renewable electricity could be economically dumped per year. If all that surplus power were to power a local #greenhydrogen some 270-350 kton of green #H2 per year could be produced. That could translate to some 1.5-2 million tonnes of #NH3 per annum.

Note these results are based on a simplistic single supply-demand point system and desktop-based co-optimisation using Microsoft #Excel's #Solver add-in (by FrontlineSolvers) and single samples for key demand and supply elements.

A more robust and complete analysis, like the one required for investment grade capacity planning and simulation, would require multi-sample stochastic methods like what Energy Exemplar's #PLEXOS simulation software offers.