MUSCAT: A competitive tender for the development of one of Oman’s largest thermal power generation projects has attracted a trio of bids, Nama Power and Water Procurement Company (PWP), the sole national procurer of power and water capacity, announced on Wednesday.

At the heart of the competitive process is a pair of combined cycle gas turbine (CCGT)-based Independent Power Projects (IPPs) planned for development at Al Misfah in Muscat Governorate and Duqm in Al Wusta Governorate. The larger of the two is Misfah IPP, with a capacity of 1,600 MW, while Duqm IPP is sized at 800 MW.

The three groups in contention for the single-tendered IPPs are:

(i) ACWA Power (a Saudi-headquartered global conventional and renewable power developer with a sizable presence in Oman);

(ii) A consortium led by Korea Western Power Co. Ltd. (a state-owned Korean power developer, already an equity partner in the newly launched 500 MW Manah-1 solar power project in Oman) and including Nebras Power QPSC (Qatar), Etihad Water and Electricity Company PJSC (EtihadWE) — wholly owned by the Emirates Investment Authority of the UAE — and Bahwan Infrastructure Services (Oman); and

(iii) A consortium headed by Shenzhen Energy Group (a Chinese majority state-owned integrated energy group) and including Oman National Engineering & Investment Co. (Oman).

According to Nama PWP, all three bidding groups have the requisite experience in financing, designing, constructing, and operating “high-efficiency thermal power assets.” Both IPPs, to be developed on a Build, Own, and Operate (BOO) basis, are key to enhancing energy security, supporting industrial growth, and achieving a diversified energy mix.

Ahmed bin Salim Al Abri, CEO of Nama PWP, commented: "The receipt of bids for the development and operation of the Misfah and Duqm power plants represents a key milestone in strengthening the Sultanate of Oman’s energy infrastructure to meet the growing demand for electricity. This project reflects PWP’s commitment to developing and enhancing the sustainability and reliability of the energy sector and supporting industrial growth, while leveraging the expertise of regional and international developers in operating high-efficiency thermal power assets capable of partially operating with green hydrogen. These projects will also contribute to enhancing the flexibility of the electricity grid and ensuring a reliable energy supply that aligns with the Sultanate of Oman’s future vision and aspirations in the energy sector and economic development."

Significantly, the pair of thermal-powered IPPs — the first in almost a decade amid Oman’s momentous pivot towards renewable energy resources — are key to ensuring grid stability as the transition gathers pace in the run-up to phased Net Zero targets.

The gas-based capacity is critical to addressing intermittency challenges associated with solar and wind energy development. Additionally, the new IPPs will help supplant older generation capacity that is not only less energy-efficient but also slated to fall out of contract in the coming years.

Misfah IPP and Duqm IPP are targeted for commercial operation by April 1, 2029, with early power slated one year ahead, on April 1, 2028.

In parallel with the procurement of these gas-based schemes, Nama PWP has also unveiled plans for the procurement of a major portfolio of solar- and wind-based IPPs designed to lift the contribution of renewables to around 40 per cent of total generation capacity by 2030. Investment inflows totaling around $5 billion are anticipated in this sector over this timeframe.

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