Roadmap for power trading with GCC states by year-end

Muscat: An action plan for enabling electricity trading between Oman and fellow members of the Gulf Cooperation Council (GCC) – a first for the Sultanate’s power sector – is expected to be in place before the end of this year, according to the Oman Power and Water Procurement Company (OPWP), which is overseeing this landmark initiative.

The Sultanate northern power grid – the Main Interconnected System (MIS) ­­­– is connected with the power system of the neighbouring Emirate of Abu Dhabi via a 220 kV link at Mahdha.  This key link provides access to the power systems of the five other GCC member states. Overseeing the interconnection between the member states is the GCC Interconnection Authority (GCCIA), of which Oman is a member.

“Energy trades or firm capacity purchases from neighboring power systems are important potential contingency resources,” said the state-owned OPWP, a member of The Nama Group (formerly The Electricity Holding Company).

“While no firm capacity transactions are currently in place, OPWP is finalizing arrangements with GCCIA to facilitate trade agreements with GCCIA Member States. We expect to develop a trading roadmap later in 2018,” the company stated in its recently published ‘7 Year Statement’ – detailing the outlook for power and water demand in the country over the 2018 – 2024 timeframe.

Significantly, OPWP has already conducted successful trial capacity exchanges with neighbouring United Arab Emirates, and now aims to develop a strategy for regular electricity trading transactions.

“These interconnections provide reliability benefits through the sharing of generation reserves, and potential for economic trading. Access conditions and trading agreements with UAE, GCCIA and Member States are expected to be finalized in 2018,” Oman’s apex power procurement agency said.

As a member of the GCCIA since 2014, the Sultanate has had access to the power systems of the other five GCC member states via the 220 kV interconnection with the UAE power system at Mahdha. The double circuit link supports reliable transfers of up to 400 MW, which can be doubled to 800 MW in the event of emergencies.

“The link has provided emergency reserves on a number of occasions, preventing power failures in the (North Oman grid) MIS,” OPWP said. “In 2016, AER approved OPWP’s recognition of the interconnect’s contribution to planning reserve requirements, based on its record of performance and the contractual obligations with the GCCIA to provide reserves support.”

As part of efforts to test power trading arrangements, as well as operational procedures between the two sides, OPWP undertook an energy exchange trial with Abu Dhabi Transco in 2016, for a net fuel savings at no cost. “Further trading opportunities with GCCIA neighbors are expected in coming years,” the power procurer noted.