MUSCAT: Oman Power and Water Procurement Company (OPWP), member of Nama Group, has announced that it has received approval from the Authority for Public Services Regulation (APSR) for the commencement of the market trial phase of the electricity spot market.
The market trial will enable OPWP to purchase the required energy on a daily basis through the offers received from generation companies. The received offers will determine the daily electricity purchase prices for every half an hour based on the energy offered for trading in the market. The electricity spot market will operate alongside the existing system of long-term Power Purchase Agreements (PPAs) between OPWP and generation companies.
The launch of the spot market will mark an important milestone for the Omani electricity sector. The market is expected to provide a competitive environment for trading of energy in order to reduce the cost of electricity procurement and avoid long term PPAs. The market will provide an opportunity for the electricity generation companies whose have expired PPAs with OPWP to compete and exploit its assets. It will also provide a platform for self-generators with the ability to sell surplus electricity production in the market.
The electricity spot market will involve all generation companies in the Main Interconnected System (MIS) network, with the possibility of expanding the scope to include other electricity networks later after the completion of the project to connect the MIS with the network of Dhofar Governorate.
The market trials will allow the participants to test IT systems, staff readiness and business processes, and to confirm that they all work together with the other participants in the spot market. The market trials are expected to be conducted for a period of between 4 to 6 months before the commencement of live operations of the spot market.