Renewables set for strong growth in 2017

871600By Conrad Prabhu — MUSCAT: Dec 18: Renewable energy development in the Sultanate is set to make strong headway in 2017 on the back of efforts by the Authority for Electricity Regulation Oman (AER) to prepare the groundwork for the implementation of a portfolio of large and small scale initiatives. An overview of the Sultanate’s strategy for harnessing renewable energy was presented by a top official of the Authority at the 5th Annual MENA Clean Energy Summit organised by the Clean Energy Business Council (CEBC) in Dubai recently.
Qais Saud al Zakwani (pictured), Executive President and Member, outlined groundbreaking initiatives by the Sultanate to enable the rollout of commercial and rural energy schemes in the Sultanate.
Of particular significance are efforts by the wholly state-owned Rural Areas Electricity Company (RAECO), a subsidiary of Nama Group, to press ahead with an ambitious plan for the development of a string of small-scale plants offering a potential aggregate generation capacity of around 26 megawatts (MW).
A five-year business plan prepared by RAECO and covering the 2017-2021 timeframe has identified 10 sites for the implementation of renewable energy projects, Al Zakwani said.  Plans are also on track for the tendering of two small-scale rural projects during the first quarter of 2017. Prospective locations are Al Khadra (2.2 MW plant) and Al Mazyunah (2.8 MW capacity).
Longstanding efforts to implement large-scale solar capacity will also move forward in 2017 with the planned release of competition document around the middle of the year. This is however conditional on a positive assessment of the benchmark price, said Al Zakwani, noting that the regulator is currently evaluating advisers to assist in the tendering process as well as establishing the benchmark price.
Already, two sites at Adam and Manah in Dakhiliyah Governorate have been identified as ideal locations for the establishment of large-scale solar capacity, provisionally sized at an aggregate of 200 MW. The competition process is proposed to be modelled on the lines of the existing Independent (Water) & Power Project template with 100 per cent foreign ownership offered.
Also making headway as part of Oman’s small-scale renewables strategy is an ambitious effort to spur the growth of solar rooftop capacity. Draft technical regulations governing solar rooftop electricity generation are currently under review, according to the Executive Director. Agency contracts will be based on the existing statutory framework, while potential incentives will be linked to the Bulk Supply Tariff. Consultations on the draft regulations and incentive mechanism for rooftop capacity are tentatively scheduled during January 2017, he said.
In his presentation, the Executive Director also highlighted “potential barriers” to the pursuit of renewable energy that would need to be suitably addressed. Notable is the discrepancy in the cost of fuel and investments relating to renewables versus the economic benefit. Another stumbling block is the absence of an overall national energy policy that affixes a quota for renewables based power generation. Subsidised tariffs and the lack of local financing for small-scale ventures are pitfalls as well.
For its part, the Authority for Electricity Regulation aims to work to, among other things, minimize the regulatory burden in order to support the deployment of renewable energy in the Sultanate, said Al Zakwani. In the absence of a clear policy, it will utilize the current regulatory framework to drive the growth of renewables, he said, stressing that the regulator will also ensure a fair and competitive process to support the growth of this nascent sector.