Oman plans to interconnect north-south power grids

Oman is exploring the possibility of interconnecting its electricity network between Nizwa and Duqm, PDO’s concession areas, and the Dhofar Power System.

The expected benefits from the proposed interconnection include fuel savings due to improved dispatch coordination among the power systems, access to areas with renewable energy potential, sharing of spinning reserves (reducing operating costs), and improved grid security, according to a seven year-outlook report released by Oman Power and Water Procurement Company (OPWP). 

Presently, the Sultanate has two main interconnected systems—the Main Interconnected System (MIS) and the Dhofar Power System. PDO also has its own power network, while governorates like Musandam have their own separate electricity networks.

The main interconnected system region extends throughout the governorates of Muscat and Buraimi, and most of the governorates of Al Batinah North, Al Batinah South, Al Dakhiliya, Al Sharqiyah North, Al Sharqiya South and Al Dhahirah, serving more than 864,500 electricity customers.

OPWP, the sole procurer of electricity in the Sultanate, is exploring a prospective 400 kV interconnection between Nizwa, Duqm, Petroleum Development Oman (PDO) and the Dhofar Power System.

“OPWP, Oman Electricity Transmission Company (OETC) and PDO are working together under a Memorandum of Understanding (MoU) to evaluate costs and benefits of the interconnection, and to define the operating procedures needed to assure that benefits are realised,” OPWP noted in its seven year outlook.

OPWP said a technical and economic study is underway, resulting in a recommendation to be submitted to the government for the timing and best route for the project, and the projections of economic savings that would be achieved.

The proposed 400 kV transmission link to MIS and PDO, which is being assessed by OPWP, OETC and PDO, will provide more options for power supply.

Duqm will gain access to power generation resources in the MIS system. The earliest that this interconnect may be made available is assumed to be 2021. However, if demand starts to trend as per the expected or high case, Rural Areas Electricity Company (Raeco) will be required to facilitate alternative means to meet the supply as early as 2019, without the assistance of the North-South Interconnect project.

Meeting the increase in demand, in this scenario, can be accommodated through temporary generation, such as rental diesel units, or possibly a temporary capacity purchase from the refinery’s captive power plant, subject to surplus capacity being available.

Duqm could also become a location for a large power station, able to access other major load centres until large-scale demand develops locally. Once Duqm develops as a major industrial and economic centre, it will require this link to provide for grid stability and security.

Spot market

Meanwhile, OPWP has submitted detailed market rules to the Authority for Electricity Regulation (AER) for selling electricity in the spot market in January 2017 for regulatory approval. Procurement of IT systems for spot market operations will begin later in 2017. The market is scheduled to begin operational trials in 2019 and commercial operation in 2020.

The spot market for electricity will operate alongside the existing system of long-term power purchase agreements (PPAs) and power and water procurement agreements (PWPAs).

The spot market is expected to increase competition in Oman’s power generation market, and to make available additional capacity that might otherwise not be readily accessible through the existing P(W)PA procurement channel.