New procurement plan to extend life of existing power projects

FLEXIBLE APPROACH: ACWA Power Barka, Al Kamil Power Co, Rusail Power Co and Sohar Power Co to be invited to participate in competitive process for around 1,936 MW of capacity required to be commercially operational in 2022 — also known as the ‘Power 2022’ initiative

Conrad Prabhu –

Four existing Independent Power Projects (IPPs) nearing the expiry of their contracts will be invited to participate in a competitive bid for power capacity under a new power procurement strategy due to be unveiled by Oman Power & Water Procurement Company (OPWP) — the nation’s sole procurer of new contracted electricity and related water capacity.
Brief insights into the new power procurement strategy published in recent weeks envisage a “flexible approach” in the way how new capacity is procured by OPWP. It will be piloted in the procurement of around 1,936 MW of capacity that will be required to be in place and fully operational by 2022 to meet burgeoning electricity demand across Oman’s Main Interconnected System (MIS), covering the northern half of the Sultanate.
Importantly, the initial rollout of the new procurement strategy envisions a role for four power projects that are close to falling out of contract with OPWP. As these plants still have several more years of operational shelf-life, there is opportunity to put these assets to operational use, albeit with some efficiency-related enhancements.
According to OPWP, the four power generators with expiring contracts are ACWA Power Barka SAOG, Al Kamil Power Co SAOG, Rusail Power Co SAOG and Sohar Power Co SAOG.
ACWA Power Barka owns and operates a 427 MW power plant as part of the Barka I IWPP project — the first privately developed scheme to come up on the populous Batinah stretch. The licence of the gas-fired Closed Cycle Gas Turbine (CCGT) based plant, initially due to expire in 2018, was extended by four years to December 31, 2021.
A similar extension was also granted to Al Kamil IPP, a 271 MW plant located in Sharqiyah South Governorate, and whose original licence expired this year. Likewise, Rusail Power Company, which operates 665 MW of electricity generation capacity, and Sohar Power Co, overseeing a 585 MW plant at Sohar Port, have agreements in place that expire in 2022.
Explaining its vision for inviting these four projects to participate in the procurement process for the required ‘Power 2022’ capacity, the procurer said: “On the basis of present demand forecasts, OPWP currently anticipates a need to contract for approximately 1,936 MW of generating capacity for 2022, though this will be subject to confirmation at a later stage. It is possible that this or a subsequently revised contract requirement could be met by granting new contracts to those existing generators with contracts that are due to expire, or it could be met by a mix of new plant and existing plant. It is however also possible that no requirement to contract for generating capacity for 2022 will ultimately arise,” OPWP explained.