Oman aspires to source up to 39% of its power grid from renewable energy by 2040. One way to meet this target is to electrify off-grid locations like Al Hallaniyat island. This study aims to assess the viability of implementing a hybrid system of renewable energy technologies with the existing diesel generators from technical and economic perspectives. It navigates the assessment by analyzing actual load data of Al Hallaniyat Island and by determining the optimum renewable energy technologies to be used, which are found to be a solar PV system and an onshore wind turbine. Both technologies are integrated with a battery system and the existing diesel generators to deliver 2,413,220 kWh yearly. HOMER Pro software is used to design the most beneficial hybrid system. The simulation recommends power capacities of 398 kW for the solar system, 580 kW for the wind turbine, 900 kWh for the battery system, and 600 kW for the diesel generators.

The hybrid system lowers the dependency on diesel consumption by approximately 73%, achieving over 79% of renewable energy penetration. With a capital cost of $1.17M and annual operation cost of $193,103, the proposed system offers a net present cost of $ 3.99M, payback period of just 4.3 years, and most importantly competitive levelized cost of energy of 0.113 $/kWh. In addition, this hybrid system significantly reduces the annual greenhouse gases emissions from 2,124,292 kg CO2e to only 580,678 kg CO2e. Overall, the study demonstrates the technical, economic, and environmental feasibility of such hybrid systems.