Hydrom Round II Bid - Green Hydrogen Project – Fortescue/Actis

Norconsult served as the technical advisor for the Fortescue and Actis consortium in their successful bid for the Omani Sultanate's Hydrom tender process.

Norconsult played a crucial role in shaping the business case and project concept for the consortium. Utilizing our Power-to-X optimizing framework, we designed hydrogen and derivative facilities using solar and wind resources. Our successful execution underscores our expertise in green energy and Power-to-X technologies, demonstrating our ability to deliver complex renewable energy solutions globally. Our adaptable and effective proprietary framework is valuable for green hydrogen projects worldwide.

This groundbreaking giga-scale initiative, aims to harness up to 4.5 GW of wind and solar renewable energy resources. These will power electrolyzers with the potential to produce up to 200,000 tonnes of green hydrogen per year.

Assignment

In 2022, Oman unveiled ambitious hydrogen plans, targeting 1-1.25 Mt production by 2030 and up to 8 Mt by 2050. The regions around Salalah, Duqm, and Al-Jazir, known for their suitable solar and wind conditions and coastal proximity, are optimal for hydrogen production. Oman is promoting private international partnerships through a competitive bidding process for land concessions. Fortescue and Actis intended to participate in the Hydrom Round II Auction for the Development of Green Hydrogen for the Salalah Zone in Oman by Hydrogen Oman SPC (Hydrom). The round focused on offering up to three land blocks in the Dhofar region, with sizes ranging from 340 km² to 400 km², dedicated to green hydrogen production.

The overall scope of this project was to develop a solar PV and wind plant to power green hydrogen production which will be further processed into derivates, such as green ammonia within the Salalah Free Zone (SFZ) area near the port of Salalah. The scope also 
includes derivaties export facilities to be installed within the existing Port of Salalah (POS).

Norconsult was engaged as the consortiums technical advisor to support in establishing the business case and project feasibility stage and preparing the of tender bids for the three land blockcs in Hydrom Round II.

Solution

To establish a robust business case and project feasibility for the green hydrogen production project in Salalah, we employed our in-house proprietary Power-to-X optimization model. This model was crucial in determining the nameplate capacities for power production and configurations for both upstream and downstream process plants. The initial step involved leveraging raw wind and solar resource data, organized into an hourly time series over the project’s lifetime. By simulating energy yield under various configurations, we optimized the solar and wind energy mix to ensure a consistent power profile to feed electrolysis. This was essential in aligning our system optimization modeling with core technical and economic principles.

Our primary objective was to minimize production variance rather than solely maximize energy production. This approach was vital to mitigate curtailment and avoid the need for over-dimensioning process plants, which would be inefficient and costly. The project was designed to deliver an annual hydrogen output of approximately 200 ktpa, equivalent to about 1.1 mtpa of ammonia. This output level was chosen based on several factors, including feedback from potential offtakers on feasible contract sizes, market demand uncertainties, and the manufacturing capacity constraints of key equipment, particularly electrolyzers. 

We evaluated energy balance and production on an hourly, monthly, and quarterly basis for solar PV, wind, hydrogen production, and ammonia synthesis. Different wind turbine capacities and solar PV configurations were tested to assess power production, capacity factor utilization, and interactions with site-specific wind resources. The optimization model iteratively tested numerous plant configurations to identify the optimal setup, focusing on achieving the lowest levelized cost of hydrogen (LCOH) and ammonia (LCOA). Benchmark calculations for LCOH and levelized cost of energy (LCOE) were also performed to ensure consistency and accuracy.

Through this systematic and data-driven approach, we successfully established a feasible and economically viable business case for the green hydrogen production project. Our optimization efforts ensured that the plant design would meet both technical and market demands while minimizing costs and production variability. This methodology provided a solid foundation for the project's development, aligning with Oman's ambitious hydrogen production goals.

Building on the robust initial dimensioning and sizing of the plant, we proceeded to establish the feasibility engineering design, which encompassed all relevant engineering disciplines and provided comprehensive project cost estimates to support the project's viability. Our approach began with technical analyses across multiple engineering disciplines, ensuring that every aspect of the project was planned and evaluated. For the solar PV and wind energy components, we conducted in-depth studies on site-specific conditions, including solar irradiance and wind patterns. This involved using advanced simulation tools and historical meteorological data to predict energy yields accurately. By optimizing the configuration of solar panels and wind turbines, including their sizes, orientations, and installation methods, we ensured maximum efficiency and output.

Simultaneously, we developed detailed designs for the hydrogen production and derivative facilities. This involved selecting appropriate electrolyzer technologies, determining their optimal placement, and designing the necessary supporting infrastructure, such as water supply and cooling systems. The design also accounted for forecast profiles, schedules, and plans for the development, construction, and operational phases. Additionally, we developed strategies for procurement, construction, and logistics to ensure seamless project execution.

Result

Norconsult successfully assisted in establishing a solid and feasible business case for Fortescue and Actis, leading to their successful bid for the Omani Sultanate's Hydrom tender process for the green hydrogen production project in Salalah.

Utilizing our Power-to-X optimizing framework, we designed the hydrogen and derivative faculties, leveraging variable solar and wind resources. We also handled the technical section of the consortium's bid book. The final sizing aims to harness up to 4.5 GW of renewable energy to produce up to 200,000 tonnes of green hydrogen per year.

At a signing ceremony in Muscat, Actis and Fortescue were awarded exclusive rights to develop this major project on a high-quality site. The ceremony was attended by HE Eng Salim bin Nasser Al Aufi, Minister of Energy and Minerals and Chairman of Hydrom.

In conclusion, our integrated approach of technical design, financial modeling, and EPC planning ensured a technically sound, economically viable, and environmentally responsible project, providing Fortescue and Actis with a strong foundation for development and implementation.

• Actis Press Release: Actis-Fortescue consortium awarded rights to develop green hydrogen project in Oman – Actis
• Fortescue Press Release: Fortescue and Actis - Pioneering Green Hydron Development in Oman