Firms prepare wind IPP consultancy bids

31 March 2023

Consultancy companies are preparing to bid by 4 April for the financial and commercial consultancy role for Oman's first utility-scale wind independent power producer (IPP) project.

State offtaker Oman Power & Water Procurement Company (OPWP) is evaluating bids that were submitted last year for the technical and economic consultancy role for the project.

The consultancy package for the wind IPP projects consists of two stages. The initial stage entails undertaking feasibility studies, ­while the second stage covers the provision of technical consultancy services.

According to OPWP, the planned wind IPP projects align with Oman’s vision to diversify fuel sources for power generation.

MEED understands that bid evaluation is also under way for the financial consultancy package for the sultanate's third major solar IPP project, Ibri 3, which will have a design capacity of 500MW.

Earlier this month, OPWP awarded two separate contracts for the Manah 1 and 2 solar IPP projects in the sultanate.

A team comprising France's EDF and South Korea's Korea Western Power Company (Kowepo) won the first 500MW solar photovoltaic (PV) IPP contract while a team of Singapore's Sembcorp Industries (Sembcorp) and China-headquartered Jinko Power Technology won the second 500MW solar PV IPP contract.

The two 500MW solar plants are expected to be operational by 2025 and will be backed by a 20-year power purchase agreement (PPA) with OPWP.

Only renewables

In March last year, the sultanate’s electricity regulator said that Oman would no longer float any tenders other than for solar or wind power generation plants “at this time”.

“A decision has been taken that meeting any growth in electricity demand in the future is from renewable sources only,” said a local media report citing Authority for Public Services Regulation (APSR) chairman Mansoor al-Hinai.

“The future is all about renewables for Oman from this point forward,” Al-Hinai added.

Renewable energy, mainly derived from solar PV power plants, accounted for an estimated 6 per cent of Oman’s electricity production capacity as of last year, thanks to the completion of the 500MW Ibri 2 solar IPP.
Jennifer Aguinaldo
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    State offtaker Emirates Water & Electricity Company (Ewec) received the SOQs on 20 May, according to industry sources.

    Ewec issued the request for prequalifications for the contract on 2 May.

    Called Bess 1, the project will closely follow the model of Ewec's independent power project (IPP) programme, in which developers enter into a long-term energy storage agreement (ESA) with Ewec as the sole procurer.

    The first plant will be in Al Bihouth, approximately 45 kilometres (km) southwest of Abu Dhabi, and the second plant will be in Madinat Zayed, about 160km southwest of the city.  

    The facilities will be able to store and discharge 400MW of power for not less than one hour throughout the ESA term. The project also covers ancillary equipment, associated infrastructure and facilities.

    Each plant will have no less than 200 megawatt-hours of energy storage capacity.

    The project has attracted strong interest among developers, resulting in a highly competitive bidding process, one of the sources tells MEED.

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    The ESA will be for 15 years, commencing on the project's commercial operation date, which falls in the third quarter of 2026. 

    According to Ewec, the bess project will provide additional flexibility to the system and ancillary services such as frequency response and voltage regulation.

    "Bess technology will play a crucial role in Ewec's strategic plan to diversify its portfolio of energy projects with a focus on sustainability, in addition to increasing its total solar photovoltaic power generation capacity to 7.5GW," the firm said upon issuing the expression of interest to developers and developer consortiums in March.

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  • Riyadh reins in spending

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    On the surface, it feels like business as usual in Saudi Arabia as new projects continue to be launched.

    On 8 May, designs for another futuristic project at Neom’s Gulf of Aqaba were released with slick computer-generated imagery. Known as Jaumur (pictured), it includes the development of a mixed-use community featuring 1,200 residential units and two hotels offering 350 rooms. The most eye-catching part of the project is at the marina, which will have a 1.5-kilometre aerofoil that will rise above the yacht berths.

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    The reports of budget cuts have coincided with a drop in contract awards. According to MEED’s Gigaprojects Tracker, there has been a sharp decline in the value of contracts awarded by the five official gigaprojects this year. 

    In April, they awarded $166m of work, down from $271m in March and $509m in February. The total in January was $5.56bn, largely due to the $4.7bn contract awarded to the local Webuild for the construction of dams at the Trojena mountain resort in Neom.

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    The budget cuts are just part of the message, says the consultant. The delivery companies are being told to find external investment to deliver their projects, and there are already signs of this happening. The clearest came in late April, when Neom announced a $2.7bn revolving credit facility from nine local banks to cater to the project’s short-term financing requirements.

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