Oman’s power regulator proposes tariff mechanisms for self-supply, direct access
Market reform: Move to further liberalise the electricity sector by enabling supply arrangements between generator and large consumer bypassing the single buyer OPWP
Published: 02:05 PM,May 11,2022 | EDITED : 06:05 PM,May 11,2022
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In a further liberalisation of the country’s electricity sector, the Authority for Public Services Regulation (APSR) has unveiled proposals that would enable – for the first time -- large power consumers to secure their electricity requirements directly from generators, thereby bypassing the current single buyer – Oman Power and Water Procurement Company (OPWP).
The proposals, once finalised and approved, are expected to pave the way for the entry of renewables-based generators to offer ‘green’ electricity to interested industrial or commercial customers operating against low or zero-carbon commitments.
The proposals are set out in a consultation paper issued recently by APSR on ‘Access Charging Methodology for Self-Supply or Direct Access’. The latter represent new mechanisms for the supply of electricity outside the scope of the single buyer model under which the market is currently regulated.
In the single buyer model, generators serve the market under long-term power (and water) purchase agreements with state-owned Oman Power and Water Procurement Co (OPWP), a member of Nama Group. Effective from January 1, 2022, this model was slightly tweaked following the introduction of the wholesale electricity (spot) market, which allows generators with expiring power purchase agreements to sell their output on the spot market to OPWP.
But with renewables set to play an increasingly important role in power generation going forward, the Authority is preparing guidelines to enable ‘bilateral’ and ‘wheeling’ arrangements between generators and large customers.
Bilateral pacts refer to arrangements agreed by a generator to supply energy directly to a large consumer outside OPWP’s remit as the single buyer. ‘Wheeling’ refers to arrangements agreed with Oman Electricity Transmission Company (OETC), the monopoly owner and operator of the country’s transmission network, to supply electricity from the generator to the customer.
APSR’s paper proposes a set of tariff mechanisms based on the type of use of the transmission network for bilaterals and wheeling pacts. One mechanism is for ‘Self Supply’, which applies to customers who use power without accessing the transmission system. “Specifically, this includes customers that use power which they generate (or “self-generate”) and access by generating on-site or private wire connection,” the regulator explained in its paper.
The other mechanism is Direct Access, which applies to customers who use power served directly by an off-site generator via the transmission system, without going through the spot market or a power purchase agreement with OPWP.
“Direct access generators may wish to wheel power onto the existing electricity transmission network to serve their customers. Direct access also provides an option for customers wishing to generate their own power off-site and wheel it to themselves via the transmission system rather than via private-wire,” the regulator noted.
“Against this backdrop, APSR tasked the Oman Electricity Transmission Company (OETC) with designing a system access (or “wheeling”) charge which allows customers to generate their own power off-site and wheel it to themselves using the transmission grid and also allows licensed production facilities to wheel power to entities other than OPWP using the transmission network,” APSR added.
In a further liberalisation of the country’s electricity sector, the Authority for Public Services Regulation (APSR) has unveiled proposals that would enable – for the first time -- large power consumers to secure their electricity requirements directly from generators, thereby bypassing the current single buyer – Oman Power and Water Procurement Company (OPWP).
The proposals, once finalised and approved, are expected to pave the way for the entry of renewables-based generators to offer ‘green’ electricity to interested industrial or commercial customers operating against low or zero-carbon commitments.
The proposals are set out in a consultation paper issued recently by APSR on ‘Access Charging Methodology for Self-Supply or Direct Access’. The latter represent new mechanisms for the supply of electricity outside the scope of the single buyer model under which the market is currently regulated.
In the single buyer model, generators serve the market under long-term power (and water) purchase agreements with state-owned Oman Power and Water Procurement Co (OPWP), a member of Nama Group. Effective from January 1, 2022, this model was slightly tweaked following the introduction of the wholesale electricity (spot) market, which allows generators with expiring power purchase agreements to sell their output on the spot market to OPWP.
But with renewables set to play an increasingly important role in power generation going forward, the Authority is preparing guidelines to enable ‘bilateral’ and ‘wheeling’ arrangements between generators and large customers.
Bilateral pacts refer to arrangements agreed by a generator to supply energy directly to a large consumer outside OPWP’s remit as the single buyer. ‘Wheeling’ refers to arrangements agreed with Oman Electricity Transmission Company (OETC), the monopoly owner and operator of the country’s transmission network, to supply electricity from the generator to the customer.
APSR’s paper proposes a set of tariff mechanisms based on the type of use of the transmission network for bilaterals and wheeling pacts. One mechanism is for ‘Self Supply’, which applies to customers who use power without accessing the transmission system. “Specifically, this includes customers that use power which they generate (or “self-generate”) and access by generating on-site or private wire connection,” the regulator explained in its paper.
The other mechanism is Direct Access, which applies to customers who use power served directly by an off-site generator via the transmission system, without going through the spot market or a power purchase agreement with OPWP.
“Direct access generators may wish to wheel power onto the existing electricity transmission network to serve their customers. Direct access also provides an option for customers wishing to generate their own power off-site and wheel it to themselves via the transmission system rather than via private-wire,” the regulator noted.
“Against this backdrop, APSR tasked the Oman Electricity Transmission Company (OETC) with designing a system access (or “wheeling”) charge which allows customers to generate their own power off-site and wheel it to themselves using the transmission grid and also allows licensed production facilities to wheel power to entities other than OPWP using the transmission network,” APSR added.