AFTAB H. KOLA
Muscat: In a bid to support the distribution of renewable energy technologies in rural areas, the Authority for Electricity Regulation (AER), Oman, has implemented new requirements to see that the Sultanate's valuable renewable energy resources are used efficiently and effectively.
Announcing the new policy requirements, John Cunneen, the authority's executive director observed, "These new requirements reaffirm the Authority's strong commitment to the utilisation of renewable energy in Oman. We believe the Sultanate will derive significant benefits from renewable energy technologies, provided these are implemented efficiently, economically and in accordance with prevailing laws and regulations.
These new requirements for electrification funding will accelerate the deployment of renewable energy technologies in rural areas and ensure projects are subject to competitive tendering." Cunneen added, "The Authority is grateful to Rural Areas Electricity Company (RAEC) for accepting the new requirements and understands RAEC is preparing documentation to ensure all future electrification funding requests will comply with the new requirements. In terms of process, the RAEC will first evaluate the need for new generating capacity in rural areas and complete an electrification pro forma request to submit to the Authority."
"RAEC will determine how much of the new capacity can be sourced from renewable technology after considering solar and wind resources in the area, the implications for security of supply arising from intermittency, and project economics. RAEC will confirm whether the renewable component will be procured on a PPA or EPC basis and forward its submission to the Authority for approval. The Authority will subject the submission to rigorous technical and economic evaluation and review the tender documentation prepared by RAEC, through which the project would be procured. If the Authority approves the project, RAEC would proceed to tender," he said.
He added, "The economic analysis will be applied to evaluations of renewable energy projects, as this removes a significant barrier to renewable energy deployment in Oman: namely fossil fuel subsidies. With the new arrangements now in place, the Authority has invited RAEC to submit electrification applications in accordance with the new requirements and we expect to receive the first applications shortly." Cunneen continued, "The Authority will not be inviting further proposals for pilot projects, as all future renewable energy projects in rural areas will be subject to competitive tendering in accordance with the tenders law and regulations.
Allowing RAEC flexibility in the means of procurement will have several advantages: projects procured on a PPA basis will facilitate knowledge transfers from technology providers to RAEC.
"Rural Areas Electricity Company can then apply its experience of renewable energy technologies directly through EPC projects that will, in turn, allow the company to consider the wider application of renewable technologies in very remote locations of the Sultanate, including places where no diesel generation is presently located. The Authority believes that providing some services to citizens is better than providing no services."