A new electricity spot market puts Oman at the forefront of market liberalization
The recent introduction of the first electricity spot market in the Middle East – in Oman – was made possible by industrial software giant GE Digital, the company said in a press release. The spot market is operated by Oman Power and Water Procurement Company (OPWP), which is the sole buyer of electricity and water in the Sultanate of Oman. It allows power and water producers, both those with ongoing contracts and those whose contracts have expired, to sell un-contracted output to the market at the best prices.
The result is a potentially lucrative source of revenue for these companies. This can be of particular benefit to solar and wind projects, since it can accelerate the return on investment. Spot market participants have access to a single unified portal through which they can participate in the daily operations that contract for supply for the next 24-hour period. Together with OPWP, GE Digital’s Grid Software business developed, commissioned, and configured the system’s digital infrastructure.
GE Digital said the system is flexible enough to accommodate OPWP’s market rules, changes to the rules, changes in the number of market participants, and real-time issues such as grid congestion and transmission capacity. Due to this flexibility, the system can also manage the expiration of existing power purchase agreements as OPWP pursues its roadmap towards a more liberalized electricity market.
The Advanced Market Management System (AMMS) of GE Digital, which includes scheduling, trading, and settlement components, is hosted in Muscat. Through its integration of Core Market operations, Modeling, and Analytics, the solution lets traders master energy trading. Companies that are connected to the country’s Main Interconnection System (MIS), which operates nearly everywhere, are currently eligible to participate in the market mechanism.
When an interconnection line linking the MIS with the Dhofar grid system in the country’s south is completed, generating companies in that system will also be able to participate. It is a time of disruption for the power and water industries in Oman. As the country begins to reap the benefits of this system, it will inspire other regional markets to accelerate their own liberalizations. This will cause the benefits to cascade throughout the region.