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Omani model – Regulation andPrivatisation of the Electricity and
Related Water Sector
Naif Al- AbriProjects Development Director15th Feb 2017
OPWP was established by the Law for Regulation and Privatisation of theElectricity and Related Water Sector, commonly referred to as the Sector Law.
The Sector Law issued by Royal Decree no. (78/2004) states the functions andduties of the sector companies.
The Transfer Scheme came into effect from 1 May 2005 Electricity Holding Company (EHC)
Transmission: Oman Electricity Transmission Company (OETC)
Distribution:
- Muscat Electricity Distribution Company (MEDC)
- Mazoon Electricity Distribution Company (MZEC)
- Majan Electricity Distribution Company (MJEC)
- Dhofar Power Company (DPC)
Rural Areas Electricity Company (RAEC)
Oman Power & Water Procurement Company (OPWP)
Authority for Electricity Regulation Oman (AER)
Introduction to OPWP and Sector Law
Functions and Duties of OPWP• Secure new capacity and output (of power) to enable it to comply with its duties under
the Sector Law and OPWP’s licence;
• Forecast and plan to meet reasonable demands for electricity;
• Meet the requirements for new capacity through financing, ownership and operation bylocal and foreign private sector investors;
• Procure through fair and transparent competition with no discrimination;
• Support fuel use and pricing policy;
• Procure on the basis on economic purchase; and
• Provide consultation and technical support to PAEW on its request in relation to futureforecasts in relation to potable water demand.
Main Integrated System(North Oman)
Dhofar System
OPWP’s Role – Areas / Systems
General Market Structure
EHC
AER
IWPP/IPP/IWPsDISCos
OETC
OPWP
PAEW/DGWShareholding
Regulation
WaterDepartment
(Client)
Distribution
GenerationTransmission
Current status (ownership structure)
0.01 %
99.99 %
Electricity System Structure
MIS
Dhofar System
Duqm
Muscat
Salalah
• There are 2 main systems in Oman, which are the MainInterconnected System (MIS) and the Dhofar Region System.
• Other standalone systems are the Duqm and Musandamsystems.
Musandam
Water System Structure
The water sector in Oman is divided into 5
geographic zones:
Interconnected Zone (MIS)
Sharqiyah Zone
Musandam Zone
Duqm Zone
Dhofar Zone
Musandam Zone
Salalah
Dhofar Zone
DuqmZone
SharqiyahZone
InterconnectedZone
Water Departments in Oman
OPWP receives annually water demand projection from water departments
Public Authority for Electricity and Water (PAEW) – Provides OPWP with the
potable water demand of :
1. MIS Zone
2. Sharqiyah Zone,
3. Musandam Zone and
4. Duqm Zone
Directorate General of Water (DGW) – Provides OPWP with potable water
demand of Dhofar Zone
Majis Industrial Services Company (MISC) – Provides OPWP with the process
water demand which is used by industry in the Sohar Industrial Port area.
Current Market Structure and Regulatory Framework
Oman Power & WaterProcurement Company SAOC
Muscat Electricity DistributionCompany SAOC
Majan Electricity Company SAOC
Mazoon Electricity CompanySAOC
PWP pays Production Facilities for•Capacity and Output in accordancewith terms of PPA/WPA/PWPA
United Power CompanySAOG
Al Rusail PowerCompany SAOC
Wadi Jizzi PowerCompany SAOC
Al Kamil PowerCompany SAOG
ACWA Barka SAOG
Al Ghubrah Power &Desalination Company
SAOC
Future Projects
Direction of payments
Discos pay PWP for•bulk purchases of electricity chargedat a cost reflective Bulk Supply Tariff(BST);•Electricity BST includes PWP’s costsof electricity procurement activities
Oman Electricity TransmissionCompany SAOC
Production Facilities & Otherspay OETC for•Connection to TransmissionSystem
Discos pay OETC for•Connection to OETC’s TransmissionSystem (Distribution business)•Use of OETC’s Transmission System(Supply business)
Water Departments
Water Departments pay PWP•for bulk purchases of desalinated watercharged at a cost reflective Bulk SupplyTariff (BST);•Water BST includes the PWP’s costs ofwater procurement activities
Sohar Power CompanySAOC
All intra sector transactions: (i) regulated & (ii) cost reflective (no direct subsidy)
Subsidy
Customers
SMN Barka PowerCompany SAOG
Al Suwaidi PowerCompany SAOC
Al Batinah PowerCompany SAOC
Dhofar Generation Co
SEMBCORP SAOC
Dhofar Power Company SAOC
Muscat Desal. SAOC
Phoenix SAOC
Sharqiyah Desalination
Ownership Structure of IWPP/IPP/IWPs - Sample
Public ShareholdingPrivate Investors
Al Kamil Power Co.Acwa Power Co.
United Power Co.Sohar Power Co.Rusail Power Co.
SMN Barka Power Co.
Al Batinah Power Co.Sembcorp Salalah Power & Water Co.
Al Suwadi Power Co.
Phoenix Power Co.Muscat City Desalination Co.
Qurayyat Desalination Co.
65 % 35 %
65 %
60 %65 %65 %65 %
65 %65 %
65 %
60 %100 %100 %
35 %40 %35 %35 %35 %35 %35 %35 %
40 %--
Sharqiyah Desalination Co.65 % 35 %
OPWP Core Departments
Planning andEconomics
ProjectDevelopment
ProjectImplementation
ClientsContracts andSpot Market
OPWP 7- year Statement
The 7-Year Statement provides a 7-year outlook on the demand of electricityand desalinated water supply. OPWP prepares the 7 year statement annually inaccordance with Condition 5 of its license.
Structure of the 7 year Statement Demand for Electricity
Power Generation Resources
Desalinated Water Requirements
Procurement Activities
Fuel Requirements
Electricity Capacity Growth
Water Capacity Growth
Project Development Stages
Prequalification (RfQ) Process
Release of RfQ
Clarifications byinterested
parties
Receipt andevaluation ofStatement ofQualifications
(SOQs)
Announcementof prequalified
bidders
Total Period (16 weeks)
Purchase ofDocument (2 weeks)
Clarificationsand Responses
RfQ Tender Period (6 weeks)
Evaluations, clarifications andapprovals from ITC & AER (10 weeks)
RfP Tendering Process
Release ofRfp toPrequalifiedbidders
Clarifications frombidders -1
OPWPresponse
Clarifications frombidders - 2
OPWPresponses
Receipt ofTechnicalQualifications (TQ)
OPWPresponsesand Re-issue ofDocuments
Bids receiptandevaluation
ProjectAward
Executionof ProjectAgreements
Total period (10 months)
RfP Tendering Period (5 months)
Evaluation, clarification, negotiationand Approvals by ITC & AER ( 5 months)
OPWPElectricity Holding Company
(EHC)
Ministry of Housing(MOH)
Ministry of Oil & Gas(MOG)
Public Authority forElectricity & Water
(PAEW) or DirectorateGeneral of Water (DGW)
Oman ElectricityTransmission Company
(OETC) and/orDistribution companies
WaterConnection
Agreement (WCA)
ElectricalConnection/Supply
Agreement(ECA)/(ESA)
Natural GasSales Agreement
(NGSA)
Power &/or WaterPurchase Agreement
(PPA/WPA/PWPA)
UsufructAgreements
(UA)
Project Company
Project FoundersAgreement(PFA)
Project Founders
Contractual Arrangement for a Project
List of Generators - PowerProject Name
Manah IPP
Project Company / Details
United Power Company SAOG
Salalah II IPP
Al Kamil IPP
Dhofar Generating Company SAOC- Expansion 1: Increase in power capacity
Al Kamil Power Company SAOG
Al Rusail IPP Al Rusail Power Company SAOC
Wadi Al Jizzi IPP Wadi Al Jizzi Power Company SAOC
Sohar II IPP Al Batinah Power Company SAOG
Barka III IPP Al Suwadi Power Company SAOG
Sur IPP IPP Phoenix Power Company SAOG
Musandam IPP Musandam Power Company SAOC
Ibri IPP Ad-Dhahirah Generating Company SAOC
Sohar III IPP Shinas Generating Company SAOC
Capacity
273 MW
273 MW+ 445 MW
281 MW
665 MW
245 MW
744 MW
741 MW
2000 MW
120 MW
1509 MW
1710 MW
List of Generators - Water
Project Name
Sur IWP
Project Company / Details
Sharqiyah Desalination Company SAOG- Expansion 1: increase in water capacity
Ghubrah IWP
Qurayyat IWP
Muscat City Desalination Company SAOC
Qurayyat Desalination Company SAOC
Barka IWP Barka Desalination Company SAOC
Sohar IWP Myah Gulf Oman Desalination Company SAOC
Capacity
17.6 MIGD+ 11.4 MIGD
42 MIGD
44 MIGD
61.8 MIGD
55 MIGD
ACWA Power Barka SAOG- Expansion 1: increase in water capacity- Expansion 2: increase in water capacity
List of Generators - Power & Water
Project Name
Barka I
Project Company / Details
GDPCo
Sohar I
Al Ghubrah Power and Water DesalinationCompany SAOC
Sohar Power Company SAOG
Barka II SMN Barka Power Company SAOC
Salalah I Sembcorp Salalah Power and WaterCompany SAOG
Capacity
427 MW / 22.5 MIGD+ 10 MIGD+ 10 MIGD
448 MW / 31 MIGD
585 MW / 33 MIGD
678 MW / 26.4 MIGD
445 MW / 15 MIGD
Projects under Implementation
Project Capacity (MW) Scheduled COD Project company
1 Salalah II IPP 445 1-Jan-18 Dhofar Generating CompanyS.A.O.C
2 Musandam IPP 120 18-Dec-16 Musandam Power Company
3 Ibri IPP 978 (EP)1,509
1 Apr 20181 Apr 2019
Ad-Dhahirah GeneratingCompany
4 Sohar 3 IPP 1,710 1-Jan-19 Shinas Generating Company
Power
Projects Under Implementation
Project Capacity (m3/d) Scheduled COD Project company
1 Barka IV IWP 281,000 1-Apr-18 Barka Desalination Company
2 Sohar IWP 250,000 1-Apr-18 Myah Gulf Oman DesalinationCompany SAOC
3 Temporary Water– Qurayyat 8,000 29-Jun-16 Muscat Water
4 Temporary Water– Aseelah 10,000 29-Jul-16 Muscat Water
5 Qurayyat IWP 200,000 31-May-17 Qurayyat Desalination Company
6 Sur IWPexpansion 48,189 15-Sep-16 Sharqiyah Desalination Company
Water
Projects under Development
Dhofar WindProject
Power 2021 Power 2022 Manah IPP(BOOT
Transfer)
Solar IPP
Capacity(MW)
50 800 –1000
2500 – 3000(including existing
contracts)
264 Excess of 200MW
Award Dec 2015 * Oct2017
Oct2018
before April2020
Aug 2018
SCOD May 2017* 1 Jan 2021 1 Jan 2022 1 Jan 2021 Apr 2020
Power
Projects under Development
SalalahIWP
SharqiyahIWP
Duqm IWP KhasabIWP
Water 2021(Ghubrah)
Water2022
(Shinas)Capacity(m3/d)
100,000 80,000 60,000 16,000 300,000 200,000
Award Feb 2017 Feb 2017 Q3 2017 Oct 2017 April 2018 April 2019
SCOD Dec 2019 May 2020 Q4 2019 Q1 2021 Q1 2021 Q1 2022
Water
Other ongoing Initiatives
• New Procurement Methodology to take into account expiringPPA/PWPAs – Implementation 2017
• Spot Market – To cater for expiring PPAs/PWPAs and also excesscapacity - Operational 2020
• Renewable energy and fuel diversification in support ofdeveloping the National Energy Strategy.
Questions & DiscussionFurther information available at: www.omanpwp.com
Thank You