Electricity in Oman is primarily generated at thermal power plants (TPPs) that operate on natural gas. The country is also actively investing in alternative energy sources, including solar and wind energy. Several ongoing projects focus on building solar power plants and wind farms to diversify energy sources and reduce dependence on oil and gas.
In 2023, Oman’s primary energy consumption is estimated to be around 1.41 quadrillion British Thermal Units (BTU). Despite ongoing efforts to diversify the energy mix, such as through solar photovoltaic (PV) projects, natural gas and oil remain the dominant sources of energy. Fossil fuels continue to account for most of the country’s energy consumption, reinforcing Oman’s energy independence. Oman is also a major exporter of crude oil and natural gas, primarily to Asian markets.
According to the 2022 World Energy Statistical Review, Oman’s primary energy consumption in 2021 was 1.50 exajoules. Natural gas accounted for 71%, followed by oil at 28%, and coal at0.7%. While the demand for electricity in the domestic market has grown steadily, production consistently exceeds demand. The surplus electricity is exported to other Gulf countries.
The Oman Power and Water Procurement Company (OPWP), a member of the Nama Group, is tasked with ensuring adequate electricity and water production at the lowest possible prices to meet the country’s growing demand. As the sole purchaser of electricity and water from Independent Power Producers (IPP) and Independent Water and Power Producers (IWPP) in Oman, OPWP plays a key role in the country’s energy market.
Nama Holding and Its Role
Formerly known as the Electricity Holding Company, Nama Holding was established in Oman on October 19, 2002. It operates as a joint-stock company, with the Oman Investment Authority—a state-owned enterprise—serving as its primary shareholder. Nama Holding owns stakes in ten companies involved in electricity and water procurement, production, transmission, supply, and distribution. It holds 99.99% of the government’s shares in eight electricity sector subsidiaries and 98.10% of the Dhofar Power Company.
The group also oversees the Nama Institute for Competency Development (NICD), focusing on workforce training and skill enhancement. These ten subsidiaries operate across the country, ensuring electricity and water needs are met nationwide.
At this stage, the extent of international company involvement in Oman’s energy market could not be determined.
Energy Structure of Oman
Generation Systems
Oman’s electricity and water sector consists of three independent market segments:
- Main Integrated System (MIS): Serves northern Oman.
- Rural Areas Electricity Company (RAEC): A vertically integrated utility that handles electricity generation, water desalination, and distribution in rural areas.
- Dhofar Power System (DPS): Operates in the Dhofar region.
The RAEC manages generation, transmission, and supply operations, providing essential services to consumers in rural areas. Below are the regulated operations for the MIS and Dhofar systems.
Structure of subsidy flows in the energy sector of the Sultanate of Oman
Subsidy Flows and Renewable Projects
Oman is expanding its renewable energy portfolio. The Amin Solar Power Plant near the Nimr region, with a total capacity of 105 MW, began operations in 2020. The Ibri-2 Independent Power Producer (IPP) project started in 2022. Additionally, the Dhofar Wind Farm (Harweel Wind Farm), located in Dhofar province, operates with a capacity of 50 MW.
Transmission and Distribution Systems
The Oman Power and Water Procurement Company (OPWP) is responsible for securing electricity and water at competitive prices to meet growing demand. As a member of the Nama Group, OPWP serves as the sole purchaser of electricity and water from IPP/IWPP projects across Oman.
Nama Holding holds stakes in companies involved in all stages of the electricity and water supply chain, ensuring efficient production, transmission, and distribution. These companies manage operations nationwide to meet Oman’s energy needs effectively.
Key Players in Oman’s Energy Market
- Oman Electricity Transmission Company (OETC):
A state-owned enterprise responsible for managing Oman’s high-voltage transmission networks, ensuring stable power supply across the country. - Oman Power and Water Procurement Company (OPWP):
Oversees the procurement and distribution of electricity and water through long-term contracts with producers, ensuring uninterrupted supply.
EPC Companies in Oman
Several engineering, procurement, and construction (EPC) companies operate in Oman, playing a crucial role in energy and infrastructure development.
- Galfar Engineering & Contracting SAOG:
One of Oman’s largest engineering firms, involved in various infrastructure and energy projects. - Larsen & Toubro (Oman) LLC:
The Omani division of the Indian engineering giant, offering services across multiple sectors, including energy. - Al Hassan Engineering Co. SAOG:
Specializes in engineering and construction across the oil, gas, and energy sectors. - Consolidated Contractors Company (CCC):
An international construction firm active in Oman, focusing on civil and engineering projects.
For the previous articles in the Series see Saudi Arabia, UAE and Qatar
Special thanks to the team at Assettracing.com for their valuable input in research capacities, advice, and support with resources in preparing these articles.
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