ENERGY SHIFT

Oman is working on a host of options for power generation including solar and wind power to meet the rising demand. Petroleum Development Oman has said the transition to renewables will help address growing climate change realities. An OGR Report

The GCC is set to see a major acceleration in renewable energy deployment. Led by the UAE, Oman and Kuwait, a total of nearly 7 GW in renewable power generation capacity is planned to come online by the early 2020s, according to International Renewable Energy Agency (IRENA).

Solar PV remains the dominant technology in the region’s project pipeline, with a share of over threefourths, followed by CSP (around 10%, all of which accounted for by a single project in the UAE) and a 9% share for wind projects, primarily in Saudi Arabia and Oman. Solar-assisted enhanced oil recovery in Oman is also expected to contribute about 1 gigawatt-thermal (GWth) in 2019. A large portion of the region’s demand for renewable energy can be expected to come from its largest energy markets – in particular the UAE, where the market for renewables is most mature, and Saudi Arabia, where a changing policy focus is assigning greater priority to renewables. Among the other GCC markets, Oman, in particular, has demonstrated interest in solar and wind energy as alternatives to domestic gas supply. Oman and Saudi Arabia also demonstrate that wind resources, both onshore and offshore, could complement the load profile of solar power, according to IRENA.

Oman’s Electricity Holding Company

or the Nama Group has charted a clear vision for Oman’s power sector incorporating solar and wind power projects in addition to traditional plants.

The Group had awarded Ibri project to produce 500MW of electricity using solar energy and the work on the construction of the first wind station in the Sultanate with a capacity of 50 MW. A feasibility study is also underway for the construction of hybrid stations (diesel - solar energy) and 11 viable sites for project implementation have already been selected.

The percentage of electricity coverage in the Sultanate is 99.9 per cent. Overall, there was a growth in the number of power subscribers by 6.25 per cent to reach 1.219 million in 2018. Gas consumption efficiency increased by 4.55 per cent. The total amount of funding received during the period 2015-2018 amounted to RO1.750 million. The group is working on developing human resources and its Omanisation rates reached 94.4 per cent by the end of 2018.

The Group is working on a programme for the privatisation of the Muscat Electricity Transmission Company before the end of 2019. This will help improve service and raise overall efficiency in the sector. The sell-off would also generate additional income for the government as a result of the sale of these assets.

FOREIGN DIRECT INVESTMENT

Total Foreign Direct Investment (FDI) in Oman’s electricity generation and water desalination sector has soared to around $10 billion by the first quarter of 2019, underscoring the robust appeal of this key industry to international investors and utilities. As many as 16 privately-owned power and water companies now make up the bulk of firms operating in this key industry. The shares of power and water project companies listed on the Muscat Securities Market are now valued at around RO450 million.

A number of new solar and wind based power schemes are in the works for implementation over the next five years, designed to secure a minimum 16 per cent contribution from renewable energy sources towards power generation in the Sultanate.

Power generation capacity has grown dramatically over the past 14 years since the sector was restructured. Starting with around 2,500 MW of capacity in 2005, it is projected to reach 10,300 MW in 2019. Growth trends have stabilised in recent years, but is projected to pick up going forward. Electricity demand which was growing in double digits in the past has been growing on an average rate of

five per cent annually in recent years.

SOLAR 2022 PROJECT

Following the Ibri II Solar Project, Oman Power and Water Procurement Company (OPWP), a member of Nama Group, has already embarked on the next renewable project with a capacity between 500 MW and 1000 MW to be commercially operational by June 2022. It is anticipated that the project will be located at Manah. The request for qualification for the project is expected to be released around the middle of this year and request for proposals before the year end.

WIND 2023 PROJECT

As the Public Authority for Water (Diam) has completed a wind Atlas for the Sultanate, OPWP is in the process of conducting a detailed wind resource assessment (WRA) to collect bankable wind data for future wind power projects.

The WRA will be across several locations from Sharqiyah to Duqm and Dhofar, where wind resource is considered high using satellite data. After the successful development of the Dhofar Wind Project (50MW), the Wind 2023 project will be the first mega wind project in Oman. The anticipated capacity will be around 300MW with an estimated project cost of $1bn. In terms of timescale, the WRA will be initiated during the third quarter this year and the qualification process for the Wind 2023 project will start in Q3 2020. The anticipated Scheduled Commercial Operation Date (SCOD) will be in Q4 2023.

WASTE TO ENERGY PROJECT

OPWP and in coordination with Authority of Electricity Regulation (AER) and Oman Environmental Holding Services (“Be’ah”) has also completed a feasibility study on procuring Oman’s first Waste to Energy Independent Power Plant.

This IPP will include integration of waste treatment and electricity generation facilities with expected waste treatment capacity of 1.4 million tons per annum and anticipated electricity generation capacity of 125 – 160 MW to be located in South Al Batinah Governorate. The project has accordingly commenced with the target to release the request for qualification to interested developers by Q2 2019 with an ultimate target of commercially operating the project by the second quarter of 2023.

Petroleum Development Oman has said the transition to renewables will help address growing climate change realities, free up huge quantities of natural gas that can be used for Omani industry or for export and to establish the Sultanate as a hub of “green” energy expertise, creating new jobs and localised supply chains.

According to PDO’s Sustainability

Report for 2018, PDO has conducted detailed studies which have identified great business potential in three areas:

• Electricity to replace gas-fired power plants

• Power-to-x to supply areas that have so far been covered by burning of gas or liquids such as steam, heat or hydrogen generation

• Industrial growth that focuses on attracting new demand based on low cost energy

In 2018, PDO awarded the contract to the Japanese-Omani Marubeni consortium to build and operate the country’s first solar photovoltaic (PV) independent power producer (IPP) at Amin field. It will also be the world’s first utility-scale solar project to have an oil and gas company as the sole wholesale buyer of electricity. The desert facility will consist of more than 335,000 solar PV panels, producing enough energy to power 15,000 homes, and span an area equivalent to 480 football pitches. The project will be structured as an IPP under the terms of the power purchase agreement for a period of 23 years from the scheduled commercial operation date, which is planned for May 2020. The consortium will build, own and operate the facility and then transfer it back to PDO.

The plant is expected to introduce an equivalent fuel saving of 70.5 million cubic metres of gas annually, resulting in a total saving of $17 million a year through the use of solar power as an alternative to natural gas. It will also reduce overall carbon dioxide emissions by around 137,121 tonnes annually, the equivalent of taking 23,000 large cars off the road. The project includes the design, procurement, construction, commissioning, financing, operation and maintenance of the solar photovoltaic plant with a 100MW capacity and associated infrastructure.

With partners GlassPoint Solar, PDO also launched the new SolaRISE technology centre near the giant Miraah project in Amal which it is building and operating to generate solar steam for use in thermal enhanced oil recovery as an alternative to burning gas. The first 100 MWt of Miraah came on stream in 2017 and the installation is meeting all performance targets.