Asset assessment study in Oman

Objective is to determine the optimal mix of plants and improve performance by diversifying the plant mix and fuel selection.

The Rural Areas Electricity Company SAOC (RAEC) was formally created in 2005 as part of the Transfer Scheme implementation process of the new electricity market structure. The vision of RAEC is to "Provide cost effective electricity to all premises in rural areas in Oman". RAEC is primarily undertaking electricity generation, water desalination and electricity distribution activities in its authorized areas.

RAECO expressed that there are savings to be achieved by replacing old, inefficient units with modern ones that operate more efficiently, or interlinking areas and closing sites. Moreover, there may be further savings possible by diversifying the fuel portfolio with the introduction of feedstock other than diesel fuel. Options include renewables such as solar and wind power. Therefore, RAECO has requested DNV to make an assessment study, assessing the power generation and desalination assets.

Project description
RAECO has requested DNV to make an assessment study, assessing the power generation and desalination assets. The overall objective of the project is that RAECO needs to undertake a major review and detailed assessment of its existing power generation and water production plants to determine the optimal mix of plants, and the extent to which savings can be achieved and overall performance improved by diversifying the plant mix and fuel selection.

Options need to be identified and potential savings estimated to determine if alternative supply options are technically and economically feasible.

Another objective of the project is to look ahead. RAECO wants to make sure that it can deliver Power and water, now and in the future. In this respect, the study will also look at the development of the demand and determine what needs to be done in order to meet future demand (time span 2011-2020).

Services provided by DNV

  • A good insight in the current operating qualities of the assets, in terms of service life, maintenance and operation
  • Compare current operating practices with world wide standards and recommendations for improvements
  • Evaluate current contracts for operations and maintenance with external contractors
  • Based on population growth, make a strategic plan for all production sites in terms of investment required and number and quality of production assets
  • Implementation plan for the suggested investments, including alternative energy resources
  • Identification of the main risks for RAECO in its current assets and in its strategic investment plan
  • Evaluate the requirements and costs for an asset management system for its assets
  • Set of recommendations for future contracts in order to have better contractor performance
  • recommendations to bring the current organization more in line with world wide adapted asset management organization principles in order to get a more disciplined execution of O&M
  • recommendations for operational practices regarding operations, maintenance and site-security
  • Risk ranking of all assets where suspect components were individually highlighted based on their risk profile. The risk profile was based on the results of the visual inspections combined with the analysis of the O&M-records

For the strategic plan and its implementation DNV undertook the following activities:

  • Study the demand curves per site and predict demand for the coming ten years
  • Translate the demand in requirements for production capacity, while keeping certain constraints in mind (e.g. n-1 principle). The capacity was then translated in required OpEx and CapEx for the coming ten years, and a plan was made to schedule the investments in time. As an alternative the options for renewable energy were compared with this plan
  • In order to assess RAECO's largest risks a risk matrix was made for RAECO, based on turnover and governmental requirements in terms of customer minutes lost and other. Using this risk matrix, the 10 most significant risks for RAECO were established. This not only included the asset risks but also market risks and safety risks.
  • Consequences of an asset management system in terms of added value, required efforts for implementation and implementation budget were presented.