The Gulf’s private utilities pioneer is pushing forwards with a new series of independent power and water projects as it looks to stay one step ahead of rising demand for both electricity and water, driven by one of the region’s fastest growing populations and an industrial sector that is primed to grow in scale and scope.

With a track record of 13 private power and water plants under its belt, Muscat has earned its stripes as one of the more forward-thinking Middle East and North Africa (Mena) utility markets. But given the population and growth dynamics – Omanis are growing in number by 8 per cent a year – the sultanate has no room for complacency.

Increasing demand

According to Oman Power & Water Procurement Company (OPWP), the single buyer in the sultanate, peak demand in the main interconnected system (MIS) – which covers the capital Muscat and the surrounding governorates – is expected to grow at about 11 per cent a year, from 4,455MW in 2013 to 9,133MW in 2020. Installed capacity currently amounts to 5,193MW in the MIS grid.

In Salalah, meanwhile, peak demand is expected to grow at a similar 10 per cent rate, from 420MW in 2013 to 800MW in 2020.

The state utility, Public Authority for Electricity & Water (PAEW), knows that it needs to substantially add to the 5,200MW of installed capacity, and it is confident that measures in place will keep project momentum at a brisk pace.

Major projects

Key MIS projects through the next six years include completion of the Sur independent power plant (IPP), which will add 2,000MW to generation capacity, and a new IPP in 2017 or 2018, with aggregate capacity in the range of 2,600-2,850MW. Capacity extensions are also expected on existing plants that produce 1,382MW, says OPWP.

In the south, the Salalah 2 IPP will be developed for service in 2018 on a power-only basis, with a capacity of 300-400MW. OPWP is also assisting the Rural Areas Electricity Company (Raeco) with the procurement of an IPP in Musandam, with net capacity of about 100MW, for a 2016 startup.

Renewables is another major ambition. In early October, Raeco announced it was progressing a 50MW wind farm project in Dhofar, partly funded by $125m of UAE cash.

Desalination sector

The sultanate’s water capacity expansion is of a similar magnitude to that of the power sector. PAEW needs to meet an objective of supplying piped water to more than 90 per cent of the population, as well as improving its performance. OPWP outlined plans for five independent water projects (IWPs) in 2014, which will add a combined capacity of 116 million imperial gallons a day (MIGD) to the sultanate’s desalination sector when fully commissioned.

Water demand in the northern region is projected by OPWP to increase by 6 per cent a year, from 782,000 cubic metres a day (cm/d) in 2013 to 1.2 million cm/d in 2020.

Demand for water in the Salalah area is expected to grow at an average rate of 8 per cent a year up to 2020, requiring capacity to rise to 83,000 cm/d to maintain the reserve margin target.

New plants

The largest desalination plants are planned at Qurayyat and Shuwaikh to meet the increase in demand. In September 2014, six groups submitted bids for the contract to develop the Qurayyat IWP south of Muscat, which is proposed to have a capacity of 200,000 cm/d. OPWP is also working on designs for a 225,000-cm/d IWP at Shuwaikh, for a 2018 start.  

Water infrastructure work is another priority. Earlier in 2014, PAEW announced it is planning to spend about RO580m ($1.5bn) on new water supply schemes over the next five years. The bulk of the projects are designed to transport water from desalination plants to urban and outlying rural areas.

In October 2014, Oman’s Ministry of Regional Municipalities & Water Resources invited contractors to submit bids for the contract to build a flood protection and recharge dam at Wadi Ghumdah in the Bukha-Musandam governorate, the latest in a number of schemes that Oman is pushing ahead with to boost its water infrastructure. PAEW also invited contractors in late 2014 to build a water distribution network in Bidbid wilayat (governorate).