Demand Response for Achieving Oman's Energy Efficiency and Resource Conservation Efforts

Written By: Ahmed Muqaibal | Date: July 26th, 2021

With the increase in electricity prices and the encouragement to apply energy efficiency measures, the need for technology that can help Distribution Network Services Providers (DNSPs) deliver secure and sustainable electricity is becoming increasingly critical. Thus, DNSPs use demand-side management elements such as Demand Response (DR) to manage and facilitate a reliable power supply.

DR is one method of managing the consumption (and hence demand) of electricity on a grid-connected network. Specifically, demand-response involves reducing electricity consumption or actively changing the electricity consumption pattern in response to the grid conditions. There are many drivers for DR, such as environmental reasons that aim to reduce greenhouse gas (GHG) emissions. Other drivers include grid-stability such as the need to maintain the network reliability, thus avoiding the need for more costlier and time-consuming updates to the grid infrastructure itself.

DR is primarily used when electricity consumption (i.e. demand) is at its peak and where the grid (i.e. the electricity producers, transmission systems, and distribution networks) is under stress. DR can be applied at certain times of the day or specific events where there is congestion on the electricity network. The implementation of DR could be through an intelligent communication system where consumers receive a message regarding reducing the electricity load during a particular time or a smart meter that can perceive the grid peak demand and reduce energy consumption accordingly. The main incentive for consumers to be involved in DR is because they will have lower electricity rate or receive compensation when they reduce electricity consumption during peak demand or shift electricity consumption to different times (the period when the demand is lower).

DR is generally a price-based response, and there are several ways of applying it. The first one is the curtailment of discretionary loads such as excess lighting and entertainment. The second way is through load shifting for flexible loads such as changing operational / production schedules at a manufacturing plant. Thus, it has an advantage on both DNSPs and consumers.

In 2020, Oman Power and Water Procurement Company (OPWP) planned to implement significant developments in the Main Interconnected System (MIS), including a focus on DR. The electricity demand in MIS in 2021 has been expected to be around 4.3 GW with annual growth of 5% reaching 5.3 GW in 2025. With the implementation of DR, the capacity requirements can be reduced by 30 MW in 2021, and by 2025 the total capacity contribution from DR program is projected to be around 100 MW.

In 2025, the MIS can avoid the capacity requirement of 100 MW which is about the same size as Amin IPP solar power 100 MWp and double the capacity of Dhofar wind project 50 MWp. Thus, significant savings can be achieved in the long term without the need to invest in capital intensive and resource demanding energy projects. To validate this type of DR program potential and applicability in Oman, OPWP conducted a proof of concept trial in 2016 in which a primary supplier of desalinated water in Oman (Ghubrah II IWP in coordination with Oman’s PAW) was shut down for two hours (14:00 to 16:00), and that has resulted in a drop by 25 MW during peak demand and a total of 50 MWh of energy (where the electricity prices are highest). The significant savings provided from DR is vital for both DNSPs and consumers and indeed help to provide more secure and reliable electricity in the future. Furthermore, DR is considered one of the most effective methods to use energy and reduce network upgrading investment efficiently.

For the coming five years, the implementation of the DR is one necessary method OPWP has launched to reduce electricity capacity requirements. The fiscal incentives and savings for both DNSPs and consumers of DR programs are just the start of achieving more comprehensive demand-side management elements, including distributed generation, distributed storage, and energy efficiency. Although there are challenges to convince participants to be involved in DR projects, the significant price reduction in electricity bills, especially for commercial and industrial consumers, could be an excellent solution to apply them in the DR project.