RenewableEnergyResources in Oman Table 6.3 Assumptions and calculation of short- and long term marginal costs, USD /MWh - (high gas price (2380 US c/Gcal) Gas turbine, 140 MW Combined Cycle, 400 MW HFO Steam, 300 MW Coal Steam, 1000 MW Fuel costs, US c/Gcal 2380 2380 2519 880 Short run marginal costs, USD/MWh 60.91 43.02 57.50 19.97 Long run marginal costs, USD/MWh (5.000 h) Long run marginal costs, USD/MWh (7.500 h) 72.84 53.83 82.33 51.59 68.86 50.22 74.05 41.05 The results are summarised in comparing the long run marginal cost of the two conventional gas technologies, and different gas prices, with conventional HFO and coal technology. Fig. 6.2 Long run marginal cost of generation with conventional gas technology and varying gas price. 80 70 60 USD per MWh 50 40 30 20 10 1.5 USD 3 USD 6 USD 0 Gas turbine (140MW) Combined Cycle GT (400MW) HFO Steam (300MW) Coal Steam (1000MW) Note: All technologies 7500 annual full load hours Page 96 of 134 .
RenewableEnergyResources in Oman Average Generation Cost in Oman The current average generation cost for MIS and Salalah can been found in Ref /20/, Oman Power and Water Procurement, annual Report 2006. Fig. 6.3 Average cost of generation in Oman by plant 2006 Baisa/kWh 9.1 11.5 13.3 10.6 14.0 16.1 10.0 11.6 14.7 12.1 Al Ghubra Al Rusail Wadi Al Jizzi Barka Al Kamil Manah Sohar MIS Dhofar Oman Figure 6.3 shows the average cost in 2006 by power plant. There are large variations between the plants with Manah and Dhofar as the most expensive and Al Ghubra and Barka having the lowest cost. The average for the country, excluding RAECO, is 0.031 USD/kWh. 50% of the average costs are fuel cost, and natural gas is currently supplied at the price of 1.5 USD/MMBtu to the power plants on long term contracts with duration of 15 years. 6.1.3 Diesel power plants Method and assumptions Power generation in RAECO' s are is mainly diesel based. The price of diesel is 146 Baiza/Litre, corresponding to 0.38 USD per Litre. Production cost of existing capacity The average generation costs in RAECO have been calculated by The Authority to 0.21 USD/kWh in 2006. The cost variation is large and the highest recorded costs were 0.67 USD/kWh and even higher at some locations with little production, as can be seen in Appendix 10. Because of the dispersed population in the rural areas the production cost per unit are significantly higher than those of the MIS and Salalah systems. The higher cost improves the competitive position of renewable energy, and in order to find suitable candidates a list of the cost at various plants is provided in Appendix 10. The data is based on informationfor Jan to June 2006 and full year 2006. Production cost of new diesel capacity The calculation of the production cost for a new diesel capacity has been based on the assumed that the capacity is 1 MW and the operation hours is 5000. Costs of generation in diesel plants are very dependent on the number of operating hour, due to the high fuel and other variable cost. Page 97 of 134 .