A Request for Qualifications (RfQ) for Oman’s first utility scale solar Independent Power Project (IPP) will be issued here today, paving the way for the aggressive and accelerated adoption of renewables as a source of power generation in the Sultanate. The landmark project, which will be located in Wilayat of Ibri in Al Dhahirah Governorate, will offer 500 MW of generation capacity based on photovoltaic (PV) technology. Investment in the scheme is estimated at $500 million with a consortium of international and local investors expected to pitch in all of the estimated capex for this project.
Announcing the project, Eng Yaqoob Saif Hamood al Kiyumi, CEO of Oman Power and Water Procurement Company (OPWP), which is the sole procurer of new power and water capacity under the sector law, described the solar IPP scheme as a “milestone” in the nation’s foray into renewables that began five years with a major feasibility study. That study established the viability of renewables based electricity generation harnessing both solar and wind based resources, he said.
“Today, I am proud to announce that our first utility scale solar project will offer 500 MW of capacity, which will be one of the biggest in the region. This decision to start big underscores confidence in renewable energy development as well as the appetite for investment in such ventures in Oman,” he said.
As a PV based project, the Ibri IPP will come up on a sprawling 1,800 hectare site identified as ideal for large-scale solar utility schemes. Output from the plant, which is large enough to meet the power requirements of some 33,000 homes, will be evacuated via a link to the Main Interconnected System operated by Oman Electricity Transmission Company.
Giving details about the timeline for the implementation of the Solar PV IPP, Al Kiyumi said tender documents will be issued to prequalified bidders before the end of the first quarter 2018.
A formal contract award is expected to be announced in the third quarter 2018 with the Commercial Operation Date (COD) slated for early 2021. Development of the Solar PV IPP will be based on the successful IPP structure established in Oman, using a transparent competition process to award the contract to a highly qualified private sector project company delivering a world class technology solution, the CEO said.
The estimated project capex of $500 million will be borne entirely by the private sector, with the winning consortium securing an award for the financing, procurement, engineering, construction, operation and maintenance of the new power plant for a 15-year period initially.
Significantly, bidders will not be asked to match or beat a ‘benchmark’ price set by OPWP as was originally envisaged in the procurement of Oman’s first utility scale solar project. Eng Al Kiyumi explained: “Initially we thought we would introduce a benchmark price in the tender, but having reviewed all of the renewables-based developments in the region and around the world, we thought it best to leave it open. In any event, we expect the tariff to be well below the initially (envisaged) benchmark price.”
Additionally, the project will make a significant contribution to natural gas and carbon emissions savings, the CEO said. By harnessing solar energy for electricity generation, the plant will offset around 340,000 tonnes of carbon dioxide emissions annually. Gas saved as a result can be diverted to downstream petrochemical or other industrial investments, thereby contributing to job and business growth opportunities. The potential for local content development and capacity building will be keenly explored as well, he added.
Commenting on the project, Mohammed al Mahrouqi, Chairman of the Public Authority for Electricity and Water (Diam), said the unveiling of the Solar IPP underlined the government’s commitment to diversifying energy resources in order to drive sustainability on the economic and environmental fronts.
Hamdan Ali al Hinai, Chairman of OPWP, added: “This project will be the first in the chain of renewables projects that the company is planning to develop in the coming few years to support the sustainability approach of the country.”
Conrad Prabhu
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