Oman Power and Water Procurement (OPWP), member of Nama Group, has announced that it received the approval of the Authority for Public Service Regulation (APSR) to start a trial-run of the Electricity Spot Market.

The market will enable the company to daily procure needed electricity through the quotations of electricity production companies, reported Oman News Agency (ONA).

Those quotations will determine the price of procuring electricity every half an hour, all day-long, depending on the available electricity for trading. The Electricity Spot Market will also offer long-term contracts to procure electricity and water.

The project is considered an advancement in the electricity sector in the Sultanate and a turning point because it will provide a competitive environment for trading electricity in order to reduce the cost of buying it from power plants. This is achieved by daily bartering and avoiding long term contracts with fixed capacities, which might be higher than the demand.

The Electricity Spot Market also aims to provide an opportunity for electricity generating companies that will have their power and water procurement contracts ending with OPWP by continuing to barter and utilize assets. It will offer a platform for individual generators of power to sell their surplus of electricity in the market.

Moreover, the Electricity Spot Market will work towards connecting electricity generating companies with the main electricity grid. It also allows the possibility of expanding coverage, so it will cover other electricity grids once the project of connecting the main grid with the Governorate of Dhofar is completed.

In addition, the trial-run will permit participating parties to test the efficiency of operations and the electronic system in joining hands to realize their commitment with the spot market guidelines. An emphasis will be laid on trial-running the practical and technical aspects of the market by using data and realistic operations. The trial phase is expected to run for approximately 4 to 6 months.