Oman plans new blueprint for effective functioning of power sector

Oman plans new blueprint for effective functioning of power sector

Saddled for the first time with excess electricity generation capacity in the face of a decline in demand growth, attributable to the protracted economic crunch as well as the pandemic, the Sultanate is moving to overhaul longstanding capacity planning and procurement policies to support the growth of a more stable sector.The proposed review is in response to impacts from the downturn that have disrupted, among other things, the planned delivery of a number of market liberalisation initiatives, including the launch of a much-anticipated Spot Market.The latter initiative — a first of its kind platform planned in the Middle East — will allow generators to compete for the opportunity to offer their surplus capacity to the grid. Summing up the dilemma currently confronting the sector, the Authority for Public Services Regulation (APSR) stated: “After decades of double-digit growth, Oman is currently experiencing a modest growth in the demand for electricity. This has created a situation of excess capacity and resulted in a conflict between capacity procurement and the intended development of the Spot Market.”Furthermore, as a result of dampening power demand growth, peak power demand as set out in contracting arrangements between the generator and Oman Power and Water Procurement Company