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Saturday, April 27, 2024 5:21 GMT
Building on a 2.82 % improvement in fuel utilization per unit of electricity last year, Oman Power and Water Procurement Company (OPWP), the sole off taker of electricity and desalinated water output, is targeting a further 2 % uptick in fuel efficiency in 2021 as well. While seemingly modest in percentage terms, these annual improvements in fuel utilization translate into several millions of Omani riyals (RO 1 = US$2.60) worth of gas savings in a sector that depends almost entirely on commercially valuable natural gas for electricity generation and water desalination. These savings, in turn, help bring down electricity production costs, as well as the hefty grant borne by the government to subsidize the sector. More importantly, the saved natural gas volumes can be channeled towards productive industries and other projects that can contribute to GDP growth, value creation and employment generation. Significantly, fuel efficiency has improved incrementally – year on year - since the unbundling and restructuring of the power sector in 2014, according to OPWP. Gas consumption per unit of power generation has fallen on average by 6.1 % in the Main Interconnected System (MIS), which covers much of the northern half of the Sultanate. In the Dhofar Power System (DPS), which covers Dhofar, the corresponding rate of improvement in gas utilization is 5.1 % since 2014. In volumetric terms, gas consumption by power and water desalination plants totaled around 6.37 Bcm in 2020, corresponding to 17.4 Mcm/d. It was less by about 2.82 % compared to 2019 figures, following a marginal 1 % decline in electricity production amid the pandemic and the accompanying economic downturn.Aiding the improvement in fuel efficiency last year were the relatively brand new Sohar III Independent Power Project (IPP) and Ibri IPP. In operation for the entirety of 2020, gas consumption by these modern plants was far less (per unit of electricity) than their older peers. In the Dhofar System, gas consumption amounted to about 710 Mcm (equivalent to 2.18 Mcm/d) in 2020, which was about 11 % lower than in 2019. Electricity production slumped by around 8 % last year amid the pandemic. “OPWP is planning to achieve around 2 % improvement in fuel utilization by end 2021,” said the state-owned offtaker, a member of Nama Group, in its newly released 2020 Annual Report. “Through the introduction of new more efficient power plants, OPWP has steadily improved system efficiency and the utilization of gas. Total gas consumption in the MIS in 2020 was about 6.4 Bcm, compared to about 6.6 Bcm in 2019, a decrease of 3 % gas consumption during this period." "Over the past seven years (2014 – 2020), the gas consumption in MIS and DPS has decreased at an average annual rate of 1.8 %. Thus, fuel utilization rate (Cubic Meters/MWh) has improved at an annual average rate of more than 6.0 % over the last seven years,” OPWP added.