A keenly anticipated Spot Market for the electricity sector — due to be introduced soon in the Sultanate — will open up opportunities for, among others, investors in the burgeoning renewable energy space to offer their surplus output at competitive prices, according to a top official of the Ministry of Energy and Minerals.
Salim bin Nasser al Aufi, Under-Secretary said the proposed platform is among a number of initiatives due to be unveiled by Oman’s energy sector authorities in support of efforts to further liberalise the electricity sector, as well as enhance energy efficiency.
Speaking at a key Energy Efficiency Conference organised last week by OQ, the global integrated energy group of the Sultanate, Al Aufi said the Spot Market, when eventually rolled out, will come as “good news” for generators of renewable energy.
Producers of electricity from renewable energy sources, such as solar wind, can offer to sell their uncontracted output via the Spot Market and thus optimise the return on their investments.
Large consumers, for their part, can keep a tab on spot market quotes and opt for suppliers offering the best tariffs, he explained.
The proposed Electricity Spot Market — the first of its kind in the Middle East — was initially planned to be brought into operation in 2020 — initially on a pilot basis and subsequently as a full-fledged commercial operation.
Its launch has been deferred primarily due to the protracted economic downturn, compounded more recently by the pandemic, which have dampened power demand growth in the Sultanate.
Oman Power and Water Procurement Company (OPWP), the single buyer of all power and water output in the Sultanate, has pledged to put in place an autonomous Market Operator that will operate and manage the Spot Market.
When operational, the Spot Market will enable power plants that are no longer covered by electricity supply contracts with OPWP, as well as renewable energy projects with uncommitted output, to compete for the opportunity to offer some or all of their capacity to the grid.
As the region’s first wholesale electricity spot market, the initiative will drive further efficiency improvements and provide a means for generation capacity that is not contracted to OPWP to sell power into the national grid, according to OPWP.
In other initiatives designed to drive competition and energy efficiency, the sector regulator — the Authority for Public Services Regulation (APSR) — is formulating guidelines authorising direct Power Purchase Agreements between generators and large consumers — an exercise dubbed as ‘bilaterals’. This direct route does away with the need for OPWP to serve as the traditional intermediary between generators and consumers, said Al Aufi in his keynote address.
CONRAD PRABHU
@conradprabhu
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