Oman launches first spot market for Electricity in Middle East

Muscat: In a landmark for the Middle East, the first spot market for electricity in the region has begun operating in Oman, helping the country in its efforts to lower the cost of electricity and water, increase the efficiency of power and water procurement, and support the energy transition.

While competitive electricity and water markets are common in the US, Europe, and parts of Asia, until now, they were not present in the Middles East.

Oman formally launched a spot market for electricity and water in January 2022. The sport market is operated by the Oman Power and Water Procurement Company (OPWP), the sole buyer of electricity and water in the Sultanate.

The spot market in Oman makes it possible for generating companies, including those with ongoing power and water purchase agreements, as well as those whose agreement have expired, to sell uncontracted output to the market at the most competitive prices. This creates new revenues opportunities for these companies, as particular benefit for solar and wind projects because it can help speed their return on investment.

Electricity and water producers access the spot market via a single unified portal, where they can participate in the daily market operations that contract for supply for the following 24-hours period.

The digital infrastructure enabling the system was developed, commissioned, and configured by GE Digital’s Grid Software business in collaboration with OPWP. The system in flexible enough to incorporate OPWP’s market rules, updates to the rules, changes in the number of market participants, and real-time issues such as grid congestion and transmission capacity.

This flexibility also means the system can manage the expiry of existing power purchase agreements, as OPWP pursues its roadmap toward an increasingly liberalized electricity market.