The Business Year

The government is working with a variety of dynamic actors to achieve a diversity of output mechanisms, including solar.

Zoher Karachiwala

CEO, United Power Company

Oman has done an excellent job overall of anticipating demand, because the country’s power policy has always been highly advanced compared to other sectors in the country. The Oman Power and Water Procurement Company (OPWP) develops a new seven-year plan every year to help project demand and shape the industry’s developments. Oman has always been able to develop new projects to ensure that there is always capacity to spare. Of course, there may be certain lag times, because it takes a year and a half to set up a project and three or four years to complete it from scratch; however, OPWP has systems in place to ensure continuity of power generation on a medium- to long-term basis. As current demand growth has been projected less, a new independent power producer (IPP) is not expected to be commissioned before 2022. OPWP is also engaging existing generation plant operators for capacity commitments beyond their power purchase agreements (PPAs), which besides a fine-tuning process is also aimed at improving the efficiency of existing plants.

Navneet Kasbekar

CEO, Al Suwadi Power

As a gas-fired power station, gas supply is like our lifeblood—we require an excellent supply of high-quality gas. Thus far in Oman, the gas supply situation is phenomenally well managed. As for operational challenges, they come in various manners, one of which is logistics, because if the plant has an outage because of equipment failure, we have to either repair it immediately or place an order for a replacement. Getting the parts to do so requires efficient and timely port and customs clearance. The shifting of the primary port of import from Muscat to Sohar had initial teething issues, which are being redressed. Moreover, during Eid holidays, for example, the port is closed for an extended period, which creates a backlog. If the part being imported is critical, the daily operations are impacted, resulting in losses. For all of our challenges, we receive a great deal of engineering support from our parent company, Engie. If there is an issue that needs immediate attention, we can fly in Engie’s technical experts to resolve it.

Naif Al Awaaid

CEO, Naif Al Awaaid

Being publicly listed ensures we will maintain corporate governance, which gives us transparency. We are grateful and delighted by the response from such a wide range of investors in Oman as well as foreign investors interested in the sector. The success represents investor confidence in DGC’s strategic role in the utilities industry in Oman. Now, we must prove our worth. At present, public investors have the right to ask about the company’s performance, and we need to ensure we are publicizing all our financial sheets. It is also under the umbrella of the Capital Market Authority. These are the main benefits along with giving the company publicity to ensure its viability in the market. On the other hand, the added value from privatization for such companies is quicker decision-making that ensures high performance standards are maintained, while exposing them to international investors who can bring their expertise into the market. The government’s plans to introduce a spot market will also fit well with privatization, resulting in more dynamic companies.

Jürgen De Vyt

CEO, SMN Power Holding

The government is looking for a mix of fuels for new plants. The clean coal-fired power plant in Duqm under discussion represents a diversification of the fuel mix, but in the end coal also results in a considerable level of emissions. Oman is considering solar energy and plans to install 500MW of solar power per year. According to the Oman Power & Water Procurement Company’s (OPWP) seven-year plan, the first plant should come online by 2021. The country is also looking at concentrated solar power (CSP) as an alternative to gas and coal; CSP is an 80% solution for those periods when one cannot produce solar power at night. A typical type of CSP technology is where a central tower uses molten salt as an energy storage medium and parabolic captures the radiation and heats up the medium inside the tower. This thermal energy is then used to run a steam-cycle plant. Engie, one of our shareholders, is currently building a CSP plant in South Africa, while another plant was recently tendered in Abu Dhabi.

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