a Shown

at minimum of prospective range from 2600 MW to 2850 MW.

The capacity upgrade of the Abu Dhabi Interconnection to 400 MW is currently not committed, but is expected to
occur around the indicated period. At current capacity, the interconnection will transfer 400 MW but not on a
guaranteed basis until the upgrade is complete.
c The existing agreements for surplus generation have been recently renewed and will expire again at the end of
2015. The respective firms have indicated the possibility of further contract extension, although the indicated
capacities are illustrative as contract terms may be modified.
b

1.3

ADDITIONAL POWER GENERATION REQUIREMENTS

Statutory and Regulatory Requirements

OPWP is required by the Sector Law and its license to ensure the adequacy of generation resources to meet
future power demands. The Sector Law establishes OPWPs general responsibility to secure sufficient
generation resources to meet the aggregated demands of licensed electricity suppliers. Further to this, the
license issued to OPWP by the Authority for Electricity Regulation, Oman (AER) stipulates a specific generation
security standard for the MIS that OPWP must comply with.
The generation security standard stipulated by the AER sets a maximum duration of power outage for the
system, termed Loss-of-Load Hours (LOLH). OPWP must enter into agreements for enough contracted
capacity to ensure that expected demand does not exceed available contracted capacity for more than 24
hours in any year. This LOLH measure considers relevant uncertainties such as the reliability of generation
units. On a short-term basis, OPWP must demonstrate to the AER that such agreements are in place. On a
long-term basis, OPWP must demonstrate that it has credible plans to put such agreements in place (via the
procurement of new capacity or otherwise).
It is important to note that for purposes of the 24-hour LOLH standard, only contracted capacity is
considered. Other resources, such as the surplus generation of industries and reserve sharing arrangements
with interconnected systems, provide a degree of reserve margin and will generally contribute to reliability of
supply. However, they are not considered for purposes of meeting the 24-hour LOLH standard and are viewed
instead as providing security against contingencies.
2014 Capacity Requirement
OPWP and the AER determined that contracted capacity in 2014 is sufficient to secure the MIS to the 24-hour
LOLH standard. However, the prospect of a delay in commissioning of the Sur IPP until mid-summer led OPWP
to consider mitigation measures to assure adequate generation capacity, in consultation with the AER. OPWP
is looking into several mitigation options, and expects to have contracts in place by April 2014 to assure
adequate generation capacity for the summer.
Future Capacity Requirements
OPWP has estimated the requirement for contracted capacity in order to comply with the 24-hour LOLH
standard in each year during the 2014-2020 period. Figure 4 below shows the capacity requirement for each of
the three demand projections in comparison to available capacity.
Under the Expected Demand scenario, contracted capacity should exceed the sum of peak demand and the
margin required to meet the 24 LOLH standard (i.e., the capacity requirement). A deficit implies a need to
acquire additional resources. Non-firm contracted resources are not considered in assessing available capacity
to meet Expected Demand.
7-Year Statement (2014-2020)

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