Muscat: Rural Areas Electricity Company (Raeco) is planning a gas-fired independent power project (IPP) with a generation capacity of 78 megawatt (MW) in the Musandam governorate of Oman, according to a seven-year outlook statement from the Oman Power and Water Procurement Company (OPWP).
“The current plan is to bring these units online once total demand (in Musandam) increases beyond 100 megawatt, which, as per Raeco’s demand forecast, is expected to be in 2019,” added the seven-year outlook.
A private developer, who wins the concession agreement through a competitive tender, will build the project for selling electricity to Raeco. The capital expenditure for the project is not known.
The peak annual growth in demand for electricity in the Musandam governorate in a low case scenario for another seven years is estimated at 7 per cent, up from 74 MW in 2016 to 116 MW in 2023, noted the seven-year outlook.
However, the high case scenario assumes higher demand for electricity from residential units, tourism projects and the fisheries sector. Peak demand is projected to grow by an average of 11 per cent per annum for the next seven years, from 74 MW in 2016 to 150 MW in 2023.
A newly established independent power project—the 123 MW capacity Musandam Power Company, will start power generation soon. The gas-fired power project will enable Raeco to reduce its reliance on diesel generators, yielding a substantial savings in fuel costs, said the seven-year outlook.
Musandam Power Company
Musandam Power Company is a joint venture between Oman Oil Company, the government’s investment arm in the energy-related sectors, holding a 70 per cent stake, and LG International, which owns the remaining 30 per cent stake.
Presently, Raeco owns six diesel-fired power stations, with a combined capacity of 88 MW distributed near load centres in the Musandam governorate. With the exception of three diesel generator units, with a total capacity of around 27 MW, the majority of units are nearly at the end of their technical life. As such, these units are expected to be decommissioned once the new IPP starts power generation.
Meanwhile, Marafiq, a joint venture establishment between the Takamul Investment Company and Semcorp Utilities, are currently in the process of developing a 300 MW power plant in Duqm. The Raeco system serving Duqm and its surrounding areas is currently supplied by the Duqm power station, a 66 MW diesel-fired power plant, which is also owned and operated by Raeco.