Question

In the electrical sector in Oman, what are the strategies the industry takes or will take to improve on its performance?

Answer 1

Sol:

Electrical sector in Oman

• Oman electricity sector liberalization process was started with the introduction of law to regulate and privatize the electricity in 2004. The changes that expected in existing Sector Law and also electricity market design are aimed at deepening the initiatives and creating more competitive electricity industry.
• Since 2000 oman’s electricity sector has needed significant investment in new generation capacity to support the country's economy and its electricity needs. Liberalization of the electricity sector introduces in 2004 and it placed significant emphasis on private sector participation in electricity production.
• The success of liberalization process is widely attributed two major factors that is clearer and comprehensive reform legislation and effective regulatory over sight through independent electricity regulator.

Strategies the industry takes to improve on its performance

• The industry in Oman is going through a transitional period in anticipation of major restructuring and renewal plans in electricity sectors. While large scale retail competition in electricity sector is not feasible changes in technology like introduction of cost reflective tariffs (CRT) are making distributed provision more cost effective.

• The important significant development in electricity sector is the planned introduction of a spot market to allow generators without long term contract to sell power on a half hourly basis at a market clearing price.

• Projected for launch in 2020 - 2021 the outcome is to increase sector competition. If Oman moves forward with developing the commercial mechanisms to make additional capacity available outside of the power the market will stands to benefit from gains in competition and efficiency.