MUSCAT, AUGUST 28
Tax waivers and other incentives are being studied by Oman’s authorities to help attract investments and localised manufacturing opportunities across the value chain of a new green energy industry envisioned to take root in the Sultanate of Oman.
An overview of some of these potential incentive mechanisms was shared by a high-level delegation representing the Sultanate of Oman at a key forum held in London, UK, recently.
Green energy projects with an aggregated renewable energy capacity of around 30 gigawatts (GW) are currently in the pipeline for implementation in Oman over the coming years. Incentives are key to sustaining this pipeline of opportunities, as well as in-country value creation across the upstream, midstream and downstream segments of this future industry, ‘Smart incentives’ centring around electricity tariffs should take into account any of the following criteria: Omanisation, local content, and use of locally available raw materials and semi-finished goods, say officials.
Such smart incentives will also support the expansion of the base of industrial activities in the country, improve energy efficiency and productivity, and accelerate the adoption of best technology available and productivity. Longer-term, industries will be able to reduce energy use per unit of production as well as make gains in market competitiveness, it is pointed out.
Incentives for green energy production related activities could potentially include tax exemption for green hydrogen output and end products. Additionally, investors should be entitled to receive a refund on import duty paid on goods used to produce green hydrogen.
Another potential incentive can be in the form of low interest loans for industries constructing large-scale renewable energy solar or wind schemes, as well as facilities to produce green hydrogen. Furthermore, a waiver of power wheeling charges – fees payable by investors for use of the transmission grid to ‘wheel’ electricity from the renewable energy generator to the green hydrogen production site – may be considered as well.
Significantly, all of these proposed incentive mechanisms may be offered up until the green hydrogen production becomes viable in 2030, officials have noted.
