Oman is planning to have the first spot market for electricity in the region by 2020.
The move is expected to spur the growth of merchant generation capacity power producers that are not covered by Power Purchase Agreements (PPAs) with Oman Power and Water Procurement Company (OPWP), the sole buyer of electricity under the Sector Law, reported Oman Observer.
Oman will commence operational trials next year in the lead-up to the markets’ formal launch in 2020.
The spot market is expect to attract third party developers from the growing renewable energy industry in Oman.
“We expect the Spot Market to go live towards the end of 2020,” said Brian Wood, Director Planning & Economics, OPWP.
“Once the Spot Market is operational, there is a channel for an investor or generator to sell power into the market; they dont have to be on a contract with OPWP; they can develop their facilities and sell power to us at the price that is set by the market. The market establishes a price for every trading period, which is a half-hour.”
The Spot Market is expected to introduce competition for the first time in Oman’s electricity generation sector, reported Oman Observer.
It will open up access to available capacity that may not be readily accessible through the existing PPA procurement model, according to OPWP.
“We have a lot of generators under contract to us who will participate in the Spot Market, but their prices will be settled at the contracted rates,” said Wood.