A raft of measures adopted by Oman’s power and water sector with the goal of reducing its dependence on natural gas has translated into major savings for the industry, as well as the national economy.
According to a new report by Oman Power and Water Procurement Company (OPWP), the national buyer of electricity and water output from this sector, significant savings have resulted from its policy of mandating the use of increasingly high-tech Combined Cycle Generation Turbines (CCGT) in 2019. This new measure builds on OPWP’s longstanding policy of requiring developers to install progressively more efficient generation plants – a practice that began in 2005 when the sector was restructured and privatized.
Consequently, natural gas consumption per unit of electricity produced continues to plummet, says state-run OPWP – member of Nama Group. “Since 2005, through the introduction of progressively more efficient generation plants, OPWP has achieved a 46 per cent reduction in the gas required per unit of electricity production, from 374 standard cubic metres / megawatt-hour (Sm3/MWh) in 2005 to 202 Sm3/MWh in 2021,” the offtaker said
“In 2021 alone, improvements in gas utilisation (when compared against gas utilisation rates in 2005) suggest savings in excess of RO 300 million. This is driven by OPWP’s procurement of new state-of-the-art CCGT plants in 2019, and new water desalination plants that shift water production from energy-intensive multi-stage flash (MSF) technology to efficient reverse osmosis (RO) technology,” it further added.
Significantly, this downtrend in gas consumption by the sector is set to further accelerate as Oman ramps up its transition to renewable energy resources, chiefly solar and wind, in the coming years.
A series of solar and wind projects in the pipeline are projected to contribute about 11 per cent of total electricity production by 2025, which will more than double to around 24 per cent by 2028, according to OPWP. Within the Main Interconnected System (MIS) serving the northern half of Oman and the Dhofar Power System, covering Dhofar Governorate, the contributions of renewables are expected to pare natural gas requirements by around 3 per cent annually through 2028, notwithstanding a similar trend in annual electricity demand growth during this period.
“Average gas utilisation by the generation fleet (sm3 per MWh produced) is projected to improve by 20 per cent from 2022 to 2028. From 2022 onwards, the main improvements will be due to the introduction of solar and wind IPPs,” OPWP stated. Coupled with the interconnection of MIS with DPS in 2026, gas requirements for electricity generation will slump to around 142 Sm3/MWh by 2028 onward, or 62 per cent less than that required in 2005, it noted.
Around 2,840 MW of renewable-based capacity is planned for development over the next five years through 2028, up from 550 MW presently in operation. This is in line with Oman’s target of securing around 39 per cent of generation capacity from renewables by 2040.