Oman is advancing a structured national approach to storage development, supported by the International Renewable Energy Agency, as it seeks to align system flexibility with accelerating renewable capacity additions.
The initiative comes as Oman’s Authority for Public Services Regulation has identified battery energy storage systems as one of three strategic priorities for 2026, alongside continuous renewable generation and demand response mechanisms. The policy direction reflects a broader structural challenge facing power systems with rising solar penetration: maintaining dispatchable capacity during evening peak demand periods while minimizing reliance on fossil-based peaking plants.
Oman’s electricity system is undergoing a transition characterized by increasing variability in generation profiles, particularly as utility scale solar projects expand. Solar output concentration during daytime hours creates a growing mismatch between generation and evening consumption peaks, a structural imbalance that energy storage is designed to address.
In this context, battery energy storage systems provide short duration balancing through rapid response discharge, while also enabling frequency regulation and reserve provision. However, the economic viability of these systems remains dependent on market design, including the presence of capacity payments, ancillary service markets, and clear revenue stacking mechanisms.
IRENA has emphasized that storage technologies are becoming central to system stability as renewable penetration increases, highlighting their role in absorbing excess electricity during periods of oversupply and releasing it during demand peaks. This operational flexibility is increasingly viewed as essential for integrating higher shares of variable renewable energy without compromising grid reliability.
To support this transition, IRENA is hosting a technical workshop in collaboration with Oman’s Ministry of Energy and Minerals on April 14, 2026. The session is designed to examine global deployment trends in energy storage, with a focus on market structures, cost competitiveness, and integration models across different grid architectures.
The policy dimension is significant, as early stage storage markets often face fragmentation in regulatory frameworks. Key design questions include whether storage should be treated as generation, transmission, or a distinct asset class, each of which has implications for revenue eligibility, grid access charges, and participation in electricity markets.
Oman’s approach suggests a move toward formalizing storage within national energy planning rather than relying on project specific approvals. This shift is consistent with broader international trends where governments are increasingly setting explicit storage capacity targets as part of integrated energy transition strategies.
A notable development in Oman’s storage landscape is the integration of battery systems into utility scale renewable projects. The Ibri III solar independent power project, currently under implementation, combines 500 MW of solar generation with a 100 MWh battery energy storage system, marking one of the country’s first large scale hybrid configurations.
The 100 MWh storage component positions the project within a short duration flexibility category, primarily designed to smooth intra day solar variability rather than provide extended backup capacity. While this configuration improves grid stability, it also highlights a limitation in current deployment models, where storage duration is often constrained by cost considerations rather than system optimality.
Hybrid solar plus storage projects are increasingly being used as a transitional architecture, allowing grid operators to evaluate performance under real operating conditions while limiting capital exposure compared to standalone storage installations.
While lithium ion battery systems dominate current deployments due to cost declines and manufacturing scale, Oman is also evaluating long duration energy storage technologies as part of its broader strategy to address multi hour and seasonal balancing needs.
One such technology under consideration is the CO₂ based energy storage system developed by Energy Dome, which is being advanced in Oman through a partnership with Takhzeen. This system represents an alternative to electrochemical storage, focusing instead on thermodynamic energy cycles to provide extended discharge durations.
In parallel, pumped storage hydropower is also being assessed using existing dam infrastructure, reflecting a global trend of revisiting conventional mechanical storage solutions as a complement to battery based systems. Pumped hydro remains one of the most established forms of large scale energy storage, though its deployment is geographically constrained by topography and water availability.
Despite growing policy support, the expansion of energy storage in Oman remains dependent on cost reduction trajectories and evolving revenue frameworks. Capital expenditure for battery systems, while declining globally, still requires multi stream revenue models to achieve bankability, including energy arbitrage, capacity payments, and ancillary service participation.
The workshop convened by IRENA is expected to address these structural issues, including regulatory design for storage participation in electricity markets. International experience suggests that markets without clearly defined compensation mechanisms for flexibility services tend to underutilize storage assets, limiting their contribution to renewable integration.
At the same time, falling renewable generation costs are increasing the economic pressure on thermal peaking plants, strengthening the case for storage deployment as a substitute for fossil based flexibility resources. However, the pace of this transition will depend on how quickly regulatory frameworks adapt to value short duration and long duration flexibility on a comparable basis.
