Viability of Solar Energy in Oman 2 nd May 2018 Date: Classification: Brian Wood, Director 1 for Oman Solar Forum 2018
Introduction to OPWP Transfer of Duties Government Owned Regulated OPWP is a fully government The Sector Law transferred the OPWP was established by owned company. following duties from the the Law for Regulation and Ministry of Housing, Electricity Privatisation of the It is also a subsidiary of the and Water: Electricity and Related Electricity Holding Company Water Sector ( Sector Law ). • and part of Nama Group. Electricity & Related Water: Nama Group companies; The functions and duties of • Water: Public Authority for OPWP are predominately Electricity & Water ( PAEW ); listed in the Sector Law and and regulated by the Authority • Housing: Ministry of for Electricity Regulation Housing. ( AER ). Oman Power and Water Procurement Company SAOC 2 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
OPWP: Functions and Duties as Single Buyer Private Sector Capacity Forecast & Plan Competition Meet the requirements Secure new capacity and Forecast and plan to meet Procure through fair and for new capacity through output of power to meet demand growth and transparent competition financing, ownership and all reasonable demand assure the reliability of with no discrimination operation by private supply sector investors Economic Tariffs Support Health & Safety Purchase Establish bulk supply Provide consultation and Give due consideration to Procure capacity and tariffs for power and technical support to the health and safety of energy at economic, water that reflects the PAEW and other the general public and benchmark prices cost of supply government entities OPWP employees Oman Power and Water Procurement Company SAOC 3 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
Peak Demand Electricity System Structure % of Total Demand Musandam There are 3 main systems in Oman: MIS 1400 MW 570 MW 6500 MW 21% 70% 7% Main Interconnected Dhofar Power PDO System System ( MIS ) System ( DPS ) There are also other standalone systems: PDO Duqm 85 MW 30 MW 1% <1% Musandam Duqm DPS System System Oman Power and Water Procurement Company SAOC 4 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
Power Flow Map Transmission Distribution MEDC Generators Customers Mazoon OETC Majan DPC Oman Power and Water Procurement Company SAOC 5 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
Electricity Demand Projections- MIS 6% per year expected demand growth • 9,010 MW peak demand by 2024 • Nearly 300 MW below previous forecast due mainly to CRT • impacts Scenarios for demand uncertainty: • 4 % per year Low Case • 8% per year High Case • Oman Power and Water Procurement Company SAOC 6 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
Power Plants Under Contract, Construction or Development Oman Power and Water Procurement Company SAOC 7 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
Major Developments for RE Viability in Oman Progress on economic viability of solar PV • – 2008: OPWP proposed pilot utility-scale projects – 2011: Solar monitoring sites, data collection – 2016: AER given authority for RE economic standards and regulatory development for roof-top PV installations – 2017: OPWP solar PV feasibility study/economic methodology; AER regulatory guidelines Fuel Diversification Policy (late 2017) • – RE target at 10% of electricity production by 2025 – Up to 3,000 MW of coal-fired capacity by 2030 Wholesale Electricity Spot Market (starts 2020) • North-South Interconnect Project • Oman Power and Water Procurement Company SAOC 8 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
Solar Potential in Oman • Solar irradiation levels are high throughout the country, increasing toward the south – Ranging from 2000 to 2500 kWh/m 2 • Electricity demand is concentrated in northern Oman • Transmission access currently constrains solar development toward the south – Transmission capacity is currently 60 MW to MIS and 150 MW to DPS – Local electricity demand is currently low except in the PDO concession area – PDO is developing some large projects – Isolated grids have high electricity costs • The North-South Interconnect project aims to open access to RE development in the south – 400 kV Line with capacity exceeding 1000 MW – If approved, may be available from MIS to PDO and Duqm by 2023 Oman Power and Water Procurement Company SAOC 9 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
Wind Potential in Oman • Oman has excellent potential for wind energy development – Numerous onshore sites have average wind speeds of 8-10 m/s – OPWP is launching a wind monitoring project in 2018 – Offshore development may also have large potential • The first wind farm is under construction – 50 MW, located at Harweel in Dhofar – COD expected in 2020 – To be operated under a PPA between OPWP and RAECO • Hourly wind data from Thumrait suggest a profile that complements solar (i.e., mainly at night), but more intermittent • Wind generation potential is concentrated in southern Oman – Best in coastal Dhofar and Thumrait – 2nd Best in Duqm, inland Al Wusta – Some potential in Sharqiyah • Large-scale development needs transmission access to demand centers Oman Power and Water Procurement Company SAOC 10 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
OPWP RE Development Plan 2018 2019 2020 2021 2022 2023 2024 MW Dhofar I Wind IPP - - 50 50 50 50 50 Ibri II Solar IPP - - - 500 500 500 500 Solar IPP 2022 - - - - 500 500 500 Solar IPP 2023 - - - - - 500 500 Solar IPP 2024 - - - - - - 500 Dhofar II Wind IPP - - - - - 150 150 Wind IPP 2023 - - - - - 200 200 Wind IPP 2024 - - - - - - 200 Waste to Energy 1 - - - - - 50 50 Total Capacity - - 50 550 1,050 1,950 2,650 Capacity Contribution - - - 150 300 500 650 Oman Power and Water Procurement Company SAOC 11 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
Features of OPWP RE Procurement Tendering process rather than an open auction or FIT • arrangement Features of OPWP’s procurement process • – Pre-arranged land access – Pre-arranged transmission access – Transparent procurement process – PPA-based, secure off-taker, well-recognized by lenders OPWP envisions annual procurement rounds • – Single or multiple awards for individual tenders – Technology not prescribed, though subject to Minimum Functional Specification (MFS) – Initial project(s) may be specified as Solar PV, but CSP and storage may come in the future Oman Power and Water Procurement Company SAOC 12 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
Development Target and Mitigation Plans OPWP’s RE development plan is flexible, and responsive to market • conditions and development constraints 2000 MW (total) of solar projects to be installed by 2024 – 500 MW projects are initially considered (per procurement) – Subsequent market assessments may allow for larger projects – A mix of solar and wind projects benefits dispatch – Solar and wind project procurement to proceed separately • If development hurdles occur for wind, then OPWP may accelerate the – pace/quantity for solar OPWP expects solar PV tariffs to be less than the economic • benchmark price of fossil-fueled generation Based on initial feasibility study – Considers the economic value of gas, emissions benefits, etc. – If project experience proves this, OPWP may develop projects beyond the – 10% policy target, on an economic basis Oman Power and Water Procurement Company SAOC 13 ش هاـــــيــمـلاو ةـــــقاــطـلا ءارــــشـل ةــــيـناـمـعـلا ةـــــكرـشـلا . م . ع . م
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