Key fact

At least 1,100MW capacity must be commissioned in Oman ahead of the 2014 peak

Source: MEED

Oman has taken some bold steps towards a more environmentally friendly future over the past year. Plans for a coal-fired independent water and power project (IWPP) at Duqm were abandoned. Refurbishment of the Al-Ghubrah IWPP to add a further 500MW of generating capacity were rejected in favour of a major new gas-fired power plant at the industrial area of Sur. While plans for a 200MW solar energy farm gathered pace with the completion of the feasibility study and an ITB due before the end of the 2011 first quarter.

Clean approach to power generation in Oman

The reasons for the change in approach were numerous. The proximity of the Al-Ghubrah power station to residential development had long been a contentious issue and plans for coal-fired power were similarly unpopular with residents of Duqm, thanks to the increased emissions generated when burning coal.

In announcing Sur, the Oman Power & Water Procurement Company (OPWP) said that the sultanate was seeking to locate new power stations away from residential areas, in line with international environmental practices.

 As an industrial site on the coast with plenty of land available, Sur is ideally positioned to host a power station, but perhaps more importantly, the location of the new independent power project (IPP) gives it ready access to gas feedstock. The pipeline for Oman’s liquefied natural gas plant runs along the periphery of the proposed site and will be accessed by the successful developer.

By October 2010, nine consortiums had expressed interest in bidding for the project and by January 2011, six were prequalified including the US group AES, Japan’s Marubeni and Mitsui, Singapore’s Sembcorp Utilities, Turkey’s Enka and Germany’s Siemens. Final bids were expected from the firms by early March, with an aim for the successful developer to have the first generating capacity of around 400MW on stream by early 2013. The remainder of at least 1,100MW must be commissioned ahead of the 2014 peak. The option exists for the plant to be taken to 2,000MW in the future.

Oman’s Electricity Transmission Company is currently upgrading the transmission system in the area, which will facilitate efficient export of the electricity into Oman’s main interconnected system (MIS). An $86m contract was awarded to Saudi Arabia’s National Contracting Company in November to construct the 220kV grid station and associated transmission line at Sur. These will connect it to the MIS which accounts for over 90 per cent of all generating capacity in Oman (500,000 customers) with the remainder (54,000) in the Salalah system.

Salalah itself is also set to receive a boost. The new 490MW IWPP currently under development by Sembcorp Utilities is expected for full commissioning in 2012, with the 15 million gallons a day (g/d) desalination element due to open before the 2011 peak. This will enable the local system to meet forecast peak demand of 615MW by 2016. During the same period peak demand in the MIS is set to reach 6,043MW.

Instrumental in meeting this need will be 1,500MW of power from current IPPs Sohar 2 and Barka 3, which are to be commissioned in 2012, followed by Sur, which will keep supply ahead of demand. But in the short-term, supplementary capacity has been sought in the guise of 300MW of temporary power. This was originally tendered as 600MW but later revised down by OPWP when the summer 2010 surge was less than expected. Cyclone Phet in early June reduced demand significantly and the peak demand in the MIS in 2010 was 3,500MW – just 76MW above that of 2009. Installed capacity in the MIS system is just 3,724MW giving a peak power reserve margin of only 6 per cent.

Soaring demand for water in Oman

Demand for desalinated water in Oman is growing at an even greater rate than power, at 13 per cent per annum. Without new capacity, OPWP predicts a worrying shortfall in Muscat of about 7 million g/d between 2011 and 2012 and up to 31.6 million g/d between 2013 and 2016. Fuelling the problem is the need to decommission units at the existing Al-Ghubrah plant. Two of the seven desalination units were scheduled for retirement in 2009, but these are now being kept in service until 2012.

Given the shortfall it is understandable that OPWP has decided that a major 40 million g/d reverse osmosis independent water project will be built at Al-Ghubrah, in place of the IWPP. The contract is currently out to bid with a submission date of 21 February and the plant should be commissioned in the second quarter of 2014.

With a raft of projects under way, Oman has positioned itself to meet future demand and increase its reserve margin. At the same time, Oman is following a cleaner path – and putting the days of emergency generation firmly behind it.