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.May 29, 2019
Turki is a Senior Research Associate at KAPSARC. He worked in several government and multinational firms in Saudi Arabia and the United States in policy-related research, and economic and market analysis. His professional experience includes ABB, Woodward, Colorado Concept Coatings, and the Advanced Power Engineering Laboratory. Alaqeel holds a PhD in Electrical Engineering , Master’s Degree in Business Administration from Colorado State University, and Graduate Certificates in Power and Energy, and Finance. Dr. Alaqeel is a Senior Member of IEEE, and a founding member of the Saudi Association for Energy Economics. He is also a Certified Modular Advanced Control (MACH2) Engineer for Flexible AC Transmission Systems, and Qualified Railway Signaling Systems Engineer. Alaqeel is member of several technical committees in Saudi Arabia, GCC and internationally including Saudi Arabia Smart Grid Conference, cigre GCC-power trade and regulation, and “Climate and Environment” task force in Japan Think 20 (T20).