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Power & Water

At the top of Oman’s power and water totem pole is the Authority for Electricity Regulation, which operates under the state. The Oman Power and Water Procurement Company (OPWP) operates […]

At the top of Oman’s power and water totem pole is the Authority for Electricity Regulation, which operates under the state. The Oman Power and Water Procurement Company (OPWP) operates as the single buyer of all power and water projects. The government itself has been funding relevant projects. In 2012, it offered a $717 million subsidy to the country’s electricity sector. Approximately $477 million of the subsidy was directed to the Main Interconnected System (MIS) in northern Oman. In 2013, financial support to the MIS is expected to increase by 29%. New projects will bring Oman a host of international players, exposure to renewable technologies, and increased regional links.


Oman’s electricity sector is divided into two main systems: the MIS, servicing some 600,000 people, and the Salalah System, which services 60,000 people. The remainder of the country depends on rural systems.

Across all networks, the government is planning to float tenders for the commission of various independent power projects (IPPs) to add a total combined generation capacity of up to 2.5 GW by 2014.

This rise in IPPs is in direct response to current and future growth in electricity demand. OPWPs 7-Year Statement (2011-2017) reported an average MIS demand growth of approximately 13% from 2011 to 2012. Over the past decade, average electricity demand has grown by 7% to 9% each year. OPWP estimates average demand to rise from 1.9 GW (17 TWh) in 2011 to 3.5 GW (30 TWh) in 2017, which makes an average growth rate of approximately 9% each year. It is also estimated that peak demand will grow by 9% as well, from 3.5 GW to 6.4 GW. By 2019, 9 GW in capacity may be needed to power Oman.

Efforts to balance this growth are already well underway. Two IPPs, Sohar 2 and Barka 3, began their combined-cycle operations in April 2013. Sohar 2 is located in the Sohar Industrial Park and Barka 3 outside of Muscat. Together, the plants add a generation capacity of 1.5 GW, significantly boosting Oman’s previous capacity of 4.5 GW up to 6 GW.

In 2013, OPWP began looking for a place to build a 300-MW independent power plant in the rising industrial city of Duqm. Tenders were floated for an IPP at Raysut in Salalah for 2017 completion.

Meanwhile, OPWP has signed a contract to develop the largest greenfield power project in Oman at Sur. The Sur IPP will bring 2-GW capacity by 2014, with 433 MW already online in 2013. The $1.8-billion mega-project project will tie into the MIS as a consortium among the Qatar Electricity and Water Company, Japanese trade firm Marubeni, Japanese electric utilities provider Chubu Electric Power, and Bahwan engineering group Multitech.


Like Oman’s electricity demand, water demand is also on the rise. Oman’s daily water demand sat at some 700,000 cubic meters (24.7 mcf) per day in 2012. This figure has only been growing, especially in bigger cities, and Oman is responding with $3.1 billion worth of 16 power and water projects across the country. These are poised to not only lift water desalination capacity, but also boost wastewater treatment efforts and broaden conservation awareness. According to OPWP, water demand in the MIS is expected to rise at an average rate of 8% per year, from 163 mcm (5.8 bcf) to 278 mcm (9.8 bcf) from 2011 to 2017, respectively. With the exception of the Sur Zone, the Ghubrah, Barka, Sohar, and Duqm zones will require additional desalination capacity amidst growing demand and the phasing out of older plants. In 2012, a consortium was awarded the Al Ghubrah independent water project (IWP) in Muscat. The $378 million plant will produce 190,000 cubic meters (6.7 mcf) of water per day and is slated to begin operations in September 2014. In October 2013, 12 companies submitted bids for a 15-year license for a large-scale IWP in Qurayyat in Muscat. The water-only Qurayyat IWP will harness a capacity of some 209,000 cubic meters (7.4 mcf) per day, making it one of the largest green-field, water-only projects in Oman. November 2013 will then see the first commercial operation of Saudi Arabian ACWA Power Barka’s seawater reverse osmosis desalination expansion project. The plant will add another 45,460 cubic meters (1.6 mcf) to its capacity.


Also offering a boost in supply are wastewater initiatives. In July 2013, US-based technology company AECOM won a $1.5 million contract from Oman’s wastewater services firm Haya Water as part of its Water Reuse Project. Oman has a current treated wastewater output of approximately 80,000 cubic meters (2.8 mcf) per day and Haya’s project will raise this production level to 220,000 cubic meters (7.8 mcf) by 2018. AECOM is responsible for the design of phase two of the Al Ansab sewage treatment plant and the Azaiba central pump station in Muscat. Also part of Haya’s wastewater plant is a 280-kilometre pipeline network connecting Haya’s six major projects in Seeb, Bousher, Muscat, Muttrah, Amerat, and Quriyat. The network will reach 80% of the population by 2018. Additionally, some 50,000 cubic meters (1.8 mcf) per day of treated wastewater will be used to water public parks and trees along the Sultan Qaboos Road.


Oman’s level of power and water efficiency is only made stronger by the region. Ever since it connected to the GCC power grid in 2012, Oman has benefited from added electricity capacity and a drop in power generation costs. Oman’s power generation costs are at some $255/MWh, while those of other GCC nations can be much lower. Qatar’s is $88/MWh and the UAE’s is $105/MWh. If Oman imports from Qatar during power shortages, power generation costs can fall as low as $155/MWh. The same benefits will be awarded by a common water grid in the GCC. In 2013, the GCC began studies to find sites on the Arabian Sea and Gulf of Oman for desalination plants as part of a $10.5 billion GCC interconnected water system. Expecting a population increase in the region from the current 25.5 million to 65 million in 2045, the GCC hopes the water network will secure supply during emergencies, provide cost savings, and standardize water procedures across the region. The GCC aims to complete the grid by 2020.

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