Oman considers new power and water projects

09 April 2015

15 per cent jump in peak electricity demand drives capacity expansion

  • Oman Power and Water Procurement Company has set out its procurement plans up to 2021
  • Of the 12 projects still to be tendered, four are already in the prequalfication process, while four were not previously announced
  • Peak electricity demand rose 15 per cent in the Main Interconnected System (MIS) in 2014, and is projected to continue rising at 9 per cent a year

The Oman Power and Water Procurement Company (OPWP) is planning new water and power capacity to meet rising demand in the sultanate.

The 2015-2021 plan identifies 12 independent power and/or water projects to procure in the next seven years.

The OPWP’s procurement schedule:

Ibri IPP1530MW20152019
Sohar IPP1683MW20152019
Sohar IWP281,000cm/d20152018
Barka IWP250,000cm/d20152018
Sharqiyah 2 IWP55,000cm/d20152019
Khasab IWP13,000cm/d20152017
Duqm IWP55,000-60,000cm/d20152019
Salalah IWP80,000-100,000cm/d20162019
MIS IPPTBD20172021
Salalah 3 IPP (or 2 IWPP)TBD20172022/3
Sharqiyah 3 IWPTBD20182022/3
Barka 2 IWPUp to 300,000cm/dTBD2021

The procurement process has already started for four projects: Ibri and Sohar independent power projects (IPPs) and Barka and Sohar independent water projects (IWPs).

The projects with a planned commissioning date after 2020 had not been previously announced.

The capacities for these projects are highly dependent on demand, and they could be dropped entirely if demand growth slows. This in turn relies on the major industrial and development projects going ahead.

Peak electricity demand jumped by 15 per cent in 2014, and is expected grow at 9 per cent a year in the Main Interconnected System (MIS), from 5,122MW in 2014 to 9,530MW in 2021.

The previous MIS projection for 2014 to 2020 was for peak demand growth of 11 per cent a year, to reach 9,133MW in 2020. The reduction is primarily due to better data collection regarding consumer contribution to peak demand. OPWP says that the revised down forecasts are not due to the lower oil price, and that GDP growth is expected to be sustained with infrastructure and development projects going ahead as planned.

Peak electricity demand growth projections until 2021 in other regions range from 19 per cent a year in Duqm to 8 per cent a year in Musandam.

A power purchase agreement (PPA) for the 400MW Salalah 2 IPP in Dhofar was signed with Japan’s Mitsui in March 2015. OPWP has invited consultants to submit offers for construction supervision on the IPP by 7 May.

Oman also commissioned a 400MW connection with the Gulf Interconnected System to stabilise its grid and import emergency power in December 2014. This will reduce the amount of reserve capacity required.

Peak water demand is projected to grow at 6 per cent in the interconnected zone and at 9 per cent a year in the Sharqiyah zone for the next seven years. This is slightly lower than 2014 projections, but peak water demand for the whole of Oman will still increase from 904,000cm/d in 2014 to 1,457,000cm/d in 2021.

New desalination capacity will use reverse osmosis to reduce electricity consumption. It will also allow separate generation and desalination sites. An IWPP at Suwaiq had to be abandoned due to site constraints.

Salalah IWP will have a capacity of between 80,000 and 100,000cm/d depending on the procurement and size of a planned expansion at Salalah IWPP. A request for proposals is planned in early 2016 leading to a contract award by the end of the year.

OPWP is supporting demand side management education campaigns to slow demand growth.

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