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Study on Renewable Energy Resources, Oman - authority for ...

Study on Renewable Energy Resources, Oman - authority for ...

Renewable Energy Resources in Oman 7.6 Fixed Prices - Feed in Tariffs FIT are fixed and guaranteed prices for energy sales from renewable sources. The prices are fixed by legislation. This system is widespread in Europe. The extra cost of this mechanism - the difference between the feed-in-tariff and the market price - is borne by Government (taxpayers) or the electricity consumers. Currently FIT is used in Denmark, Austria, France, Greece, Spain, Luxembourg, Portugal and other countries. FIT is the preferred means of the EU Commission in its new plan to increase renewable energy consumption and reduce carbon emissions in the coming years. The precise mechanism depends, in some cases the FIT is a fixed premium over the current market price, and the total price obtained by the producers varies. In other cases it is the total price per kWh supplied that is fixed. Fig. 7.1 below shows some examples of the FIT for wind energy in EU countries. Fig. 7.1 Examples of Feed in Tariffs for Onshore Wind Plants Feed in Tariffs (2003) for Onshore Wind Plants (Baiza/kWh at 2003 Euro-Rial Exchange Rate) Austria (new plant) Denmark France Germany Greece Luxembourg (premium) netherlands Portugal Spain (fixed price) Spain (premium) 0 5 10 15 20 25 30 35 40 45 Baiza/kWh Source: Wind Energy – The Facts: Volume 5 Market Developments FIT optimal level defined as the level that will attract the production that is defined politically or from power system considerations. Due to technology changes this FIT is highly dynamic and needs to be monitored and adjusted continuously in order not to over subsidise or attract excessive production. FIT is simple as there are no Power Purchase Agreements to be concluded and no possibility of defaulting counterparts. There are however political risks for the investors by way of lowering or removing the FIT. Page 112 of 134 .

Renewable Energy Resources in Oman 7.6.1 Application in Oman Application of an FIT in Oman could be an option. The FIT should compensate the renewable energy generator for the additional cost he has. The tariff could be paid either directly to the producers or to the purchaser OPWP. It will require that the renewable energy production capacity established is given priority. Page 113 of 134 .

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