The Oman Electricity Market (OEM), a pioneering initiative that paves the ground for the future liberalisation of the country’s electricity sector, delivered a second year of operational success in 2023, according to Nama Power and Water Procurement Company (PWP).
Introduced for the first time in 2022 – a first in the Middle East - the Oman Electricity Market enables generators with expiring Power Purchase Agreements (PPAs) to compete for the opportunity to offer some or all of their uncontracted capacity through a short-term market run each day.
“The Market has performed well with steady growth in the local economy, with the market peak demand closing 3.3 per cent higher than 2022. Also, there is a significant increase in total Pool Demand in the market compared to 2022,” said Ahmed Salim al Abri, CEO – Nama PWP.
“In the operating year 2023 all the market participants have built better capabilities and experience to fulfill the operational requirements of the market,” Al Abri stated in a foreword to the Market’s 2023 Annual Report.
Nama PWP, as Sole Power Procurer is also the Market Operator of the Oman Electricity Market. Other participants are generators whose PPAs are coming to the end of their contracts. Oman Electricity Transmission Company (which operates the Load Dispatch Center) has a key role as well.
Under the specific rules of the Oman Electricity Market, the PWP purchases electricity from the registered generators through a short-term market run each day, with prices for each half hour set each day based on what generators have offered to sell. Generators holding P(W)PAs and connected to Main Interconnected System (MIS) are also required to submit offers to the Market.
In all, seven generators registered their capacity on the Oman Electricity Market during 2023. They are: Barka II, Barka III, Sohar II, Sohar III, Ibri I, Ibri II and Sur 1, which together registered a total of 7,882.83 MW of capacity. Energy generated through the Market totalled 36.37 terawatt-hours (TWh) of electricity, of which 4.3 per cent was solar PV-based renewable energy.
Al Abri also underlined the Oman Electricity Market’s contributions to, among other things, the enhancement of availability signals, dispatch efficiency, transparency, and the provision of more efficient operation incentives.
“The market continued to provide trust and confidence and to provide a base to support liberalisation journey of Oman’s electricity sector,” he noted. “Furthermore, the market can play a role into the efficient integration of renewables and demand side resources in future. The market also provides the generator with greater transparency in the treatment of expiring P(W)PAs.” Nama PWP, a member of Nama Group, also anticipates a number of beneficial impacts for the wider power sector. Besides supporting the future liberalisation of Oman’s electricity sector, Market Rules oblige generators to achieve the optimal reduction of consumption of fossil fuel for power generation in a bid to improve dispatch efficiency. Further, by capitalising on improved availability signals, forced outage rates will be reduced overall, particularly during critical peak periods, PWP added.
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