The spot market trial run is expected to commence in early 2020. How will it operate?
The first part of the market trial will comprise some simple scripted scenarios to ensure that all parties can perform their roles successfully in each of the market processes. It will involve the market participants and generation companies, with OPWP acting as market purchaser and operator together with the transmission company and regulator. The scenarios will then be progressively built up, so that the final part of the market trial is a full “dress rehearsal" for the market, with all market processes carried out as they would be in a fully operational market, except that no payments will be due. Detailed planning for the market trial will take place late in 2019 and the Authority for Electricity Regulation and OPWP will oversee the market trials.
The spot market is expected to go live in late 2020. Who are you expecting to be the first generators to sell their electricity on the market?
Realistically, OPWP is not expecting the volume of power sales settled through the spot market to be initially high, as most generators will continue to be covered by their long-term power purchase agreements for some time. Auto-generators with spare capacity may choose to opt into the spot market. Some currently contracted generators will be reaching the end of their PPA terms shortly after the market starts, and selling on the spot market is one option for them. Finally, OPWP is developing new forms of PPA for future procurement that will allow a portion of the generation plant output to be sold under the contract and a portion under the spot market.
How are power generators expected to change once they are producing for the spot market?
The spot market is about short-term signals that reflect what is happening in the power system at the time, and we expect that generators' behaviour will react to these signals. So, when supply is tight, prices will be relatively higher and generators will have incentives to ensure they are available and able to generate in those periods. Experience elsewhere has shown that generators may find innovative ways to allow their plant to be operated more flexibly when they have the incentive to do so. Producing a stream of transparent spot market prices is important for helping generators identify opportunities to optimise their plant operation.
In terms of OPWP's role as market operator, how will you prevent bid rigging or collusion?
The power sector regulator, the Authority for Electricity Regulation (AER), will take the overall role in policing generators' market behaviour and is in the final stages of amending generation licences for the spot market. OPWP's Market Operator department will have a role in collecting and analysing the day-to-day market data for AER. Generator offers into the spot market are required to be cost reflective, and a code of bidding practice should be developed prior to market start.
OPWP recently invited bids for the consulting services on a WTE project. What is the plan for developing WTE projects as a viable power generation model in Oman?
With a view to better utilizing the solid waste generated within the Sultanate, OPWP in coordination with Bea'h has explored the development of a waste-to-energy project in Oman. We first conducted a techno-economic feasibility study for the project, which is now under review by AER for approval. The study examined the various technological options and recommended the most suitable technology. Based on this, the solid waste generation in Oman is sufficient for setting up a WTE project in excess of 100MW. Subject to government approval, the project should be commercial by 2Q2023.
What is OPWP's role in encouraging alternative energy projects?
The broader goal is to achieve 10% renewables by 2025, for which OPWP is committed to implementing 2,650MW of solar, wind, and WTE projects by 2024.