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Abstract

This discussion paper is part of a KAPSARC research project initiated to develop insights that can facilitate the creation of a well-functioning integrated electricity market comprising the member states of the Gulf Cooperation Council (GCC). The project identifies and examines the key issues affecting electricity market integration within the GCC and the wider Middle East and North Africa (MENA) region and suggests the enablers needed to facilitate market integration.

This report focuses on Oman’s electricity sector, the liberalization of which started in 2004. The country’s power reforms are now poised to move to the next level, with the aim of creating a more competitive electricity industry in the Sultanate.

Key features of Oman’s electricity market, challenges, and opportunities for market integration identified in the paper include:

  • Nearly one quarter of Oman’s domestic natural gas production is used to power electricity generation and water desalination plants.
  • The government’s National Energy Strategy 2040 seeks to ensure the country’s long-term energy sustainability, in part through targeting that at least 10% of electricity output comes from renewables by 2025.
  • The private sector now owns 100% of generation capacity in Oman’s main interconnected system (MIS), and efforts have started to privatize other transmission and distribution firms.
  • Regulatory oversight through a financially and administratively independent regulator with an adequate mandate, the Authority for Electricity Regulation, has played a key role in improving the sector’s performance and has created confidence among new industry players. In future, Oman’s gas network may be included in the regulator’s remit.
  • Oman intends to implement a new arrangement for the future procurement of electricity through the spot market by 2020.

Authors

Shahid Hasan

Shahid Hasan

Research Fellow Prior to joining KAPSARC, Shahid was an associate director at TERI, an independent research institution working in the areas of…

Expertise

  • Energy policies/regulations
  • markets and transitions

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Turki Alaqeel

Turki Alaqeel

Senior Research Associate Turki is a Senior Research Associate at KAPSARC. He worked in several government and multinational firms in Saudi Arabia and…

Expertise

  • energy transitions
  • electricity markets regulations and policy
  • Smart Grid
  • digitalization and innovation
  • power system modeling
  • renewable energy policy
  • and energy efficiency

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Electricity Sector Reforms in Abu Dhabi and Oman: What Have We Learned?

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Temperature Trends Across Cities in Saudi Arabia

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Yagyavalk Bhatt

Yagyavalk Bhatt

Research Associate Yagyavalk is a senior research analyst who has worked on developing the KAPSARC Renewable Energy Policy Atlas and the KAPSARC…

Expertise

  • Energy market
  • renewable energy transition and climate finance

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Abdullah Al-Badi

Abdullah Al-Badi

Professor, Sultan Qaboos University (SQU) College of Engineering Abdullah is currently a professor at Sultan Qaboos University (SQU) College of Engineering in Muscat, Oman. He has published over…

Mohammed Al-Badi

Mohammed Al-Badi

Associate Professor and Head of the Electrical and Computer Engineering Department at Sultan Qaboos University Mohammed is Associate Professor and Head of the Electrical and Computer Engineering Department at Sultan Qaboos University (SQU), Muscat, Oman.…

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