Petroleum Development Oman (PDO) today (7 November) said its world-first solar photo voltaic Independent Power Producer (IPP) project marked a step change for renewable energy in the Sultanate.
PDO will buy electricity for its Interior operations from the installation at Amin in southern Oman at one of the lowest tariffs in the world. The Company said the rate showed the “huge potential” for the country to produce solar energy at commercially attractive prices.
PDO has awarded the contract to build and operate the plant to the Marubeni Consortium, consisting of Japanese company the Marubeni Corporation, the Oman Gas Company S.A.O.C, Bahwan Renewable Energy Company LLC and Modern Channels Services LLC.
The desert facility will be the first of its type in Oman and will also be the world’s first utility-scale solar project to have an oil and gas company as the sole wholesale buyer of electricity.
Construction will start in January 2019 and the site will span 4 km2, the size of 480 football pitches. The installation will consist of more than 335,000 solar PV panels, producing enough energy to power 15,000 homes.
The project will be structured as an IPP under the terms of the power purchase agreement for a period of 23 years from the scheduled commercial operation date, which is planned for May 2020. The consortium will build, own and operate the facility and then transfer it back to PDO.
The plant is expected to introduce an equivalent fuel saving of 70.5 million m3 of gas annually, resulting in a total saving of US$17 million a year through the use of solar power as an alternative to natural gas. It will also reduce overall carbon dioxide (CO2) emissions by around 137,121 tons annually, the equivalent of taking 23,000 large cars off the road.
Speaking at the formal contract award ceremony at Mina Al Fahal, PDO Managing Director Raoul Restucci said: “We are delighted to sign this contract which marks a significant step in our transition to a fully fledged energy company with a greater emphasis on renewables.
“The tender for the IPP was released in February this year and we received competitive bids from highly reputed developers in the renewable energy industry, testament to the credibility of PDO’s commitment to the renewable energy sector and the huge potential of this sustainable use of natural resources for power generation in Oman.
“The proposed tariff is one of the lowest in the history of solar IPPs worldwide so far and underlines the significant opportunity for Oman to produce low-cost energy using solar.
“The electrical power produced will feed into our transmission system and contribute to off-setting the use of natural gas for power generation and reduce greenhouse gas emissions.”
The project includes the design, procurement, construction, commissioning, financing and operation and maintenance of the solar photo voltaic plant with a 100 megawatt (MW) capacity and associated infrastructure.
Marubeni is one of Japan’s leading trading and investment houses and operates more than 50 power projects with a total generation capacity of more than 41 gigawatts (GW) worldwide, with a third of this in the Middle East region.
Toshihiro Maruo, Senior Officer of the Marubeni Corporation’s Power Business Division, said: “We are very excited to take a lead developer role in this amazing project. We have recently announced a new corporate strategy confirming our intention to double our current capacity of renewable energy so that it will make up at least 20% of our portfolio within the next five years. The Amin IPP project is our first success since the announcement of our new strategy and we are delighted to receive the award of this prestigious project.
“We believe that, with the experience of our Omani partners and Marubeni’s expertise of power projects around the world, we will make the project a great success and that it will support the further growth of PDO as our valued customer.”
PDO has already ventured into solar energy with the giant Miraah solar plant in Amal which it is developing with partners GlassPoint Solar to produce steam for thermal enhanced oil recovery
PDO is also installing thousands of solar panels in car parks at its Mina Al Fahal headquarters to power key offices and feed into the national grid during non-working hours.