Energy Sustainable Future

Oman focuses on grid expansion to support renewables

The Middle Eastern country Oman, located on the south-eastern coast of the Arabian peninsula with a population of around 5.1 million, is predominantly dependent on gas-fired power generation to meet its energy needs. However, to reduce its carbon footprint, the country is now looking to reduce its dependence on fossil fuel and add renewable energy-based capacity to diversify its power generation. Moreover, Oman’s electricity demand is expected to increase at a compound annual growth rate (CAGR) of 5 per cent over the next four to five years and reach 10,453 MW by 2023-24, largely due to rapid population growth and an expanding economy.

Oman Power and Water Procurement (OPWP), which is the single buyer of power and water from all independent power producer (IPP)/independent water and power plant (IWPP) projects, has formulated a renewable energy development plan for 2019-25 as part of its mandate to undertake long-term generation planning. Under this, a target has been set to produce 16 per cent of the country’s electricity through renewables-based sources by 2025, further increasing its share to about 30 per cent by 2030.

To fully reap the benefits of the upcoming renewable energy capacity, the country’s high voltage grid developer, Oman Electricity Transmission Company (OETC) plans to invest around OMR 477 million by 2023, to establish a robust grid network. The investment in grid expansion will also be directed towards minimising grid congestion, interconnecting isolated regions, meeting increased power demand, and connecting new power plants to the grid. Focus will also be laid on transforming the grid to accommodate 400 kV voltages in the existing transmission system in northern Oman, which currently operates at only 220 kV and 132 kV.

Privatisation programme

In 2017, the country initiated a programme to privatise its power sector. Under the plan, five power sector utilities of Nama Holding – transmission utility OETC and four distribution companies, namely, the Muscat Electricity Distribution Company (MEDC), Majan Electricity Distribution Company, Mazoon Electricity Distribution Company and Dhofar Power Company – are to be privatised.

Nama Holding, formerly known as the Electricity Holding Group, has shares in nine state-owned companies involved in power generation, transmission, distribution and supply, and is wholly owned by the Ministry of Finance. Nama also owns 99.99 per cent share in the OPWP.

The aim of the privatisation is to attract foreign direct investment (FDI), utilise international technical skills and technology, improve customer services, increase resource utilisation efficiency, and reduce the unit cost of electricity supply.

By 2019, Oman became the first country in the Middle East to privatise its power transmission utility OETC, by selling its 49 per cent stake worth $1 billion to the Chinese transmission and distribution operator, State Grid Corporation of China.

For the MEDC, the privatisation process is expected to be undertaken during the second quarter of 2020. Around 14 non-binding bids have been submitted for the distribution company. The privatisation drive for the remaining distribution utilities is also expected to take place in 2020.

Power sector overview

Oman’s power system is segregated into three isolated systems – the main interconnected system (MIS), which covers the northern half of the country; the Dhofar power system, which covers the southern Dhofar region; and the rural power system.

It is estimated that by the end of 2019, Oman had an installed generation capacity of 11,544 MW, having grown at a CAGR of 10 per cent from 2015 to 2019. Of the total installed capacity, 90 per cent is under the MIS, while the remaining 10 per cent is under the Dhofar power system. Although the majority of the existing generation capacity is gas based, renewables-based capacity is now being gradually added to the generation mix.

During 2019, the 1,509 MW Ibri and the 1,710 MW Sohar III IPP gas-fired power plants were commissioned in the MIS. In addition, a 50 MW wind farm was commissioned in the Dhofar region during the year.

As per Global Transmission estimates, by the end of 2019, Oman’s transmission network comprised 7,396 circuit km (ckt km)of line length up from 7,210 ckt km in 2018 at the 132 kV, 220 kV and 400 kV voltage levels, representing an annual growth rate of 3 per cent. More than 90 per cent of the total transmission network is under the MIS region.

Around 60 per cent (4,407 ckt km) of the existing line length is at 132 kV, 23 per cent (1,703 ckt km) at 220 kV and 17 per cent (1,287 ckt km) at the 400 kV level. The country’s transformer capacity at 132 kV and above level increased from 27,696 MVA in 2015 to 53,297 MVA in 2019, representing a CAGR of 18 per cent during the period. It has been estimated that there were around 96 high voltage grid stations as of end 2019.

Some of the major projects commissioned during 2019 were the 400/132 kV Qabel and Saih Al Makarim and the 132/33 kV Samad and Sinaw grid stations; and the 132/33 kV Samad-Sinaw and the 400 kV Sohar III IPP-Sohar Free Zone lines.

In addition to the domestic transmission network, Oman’s grid is interconnected with the transmission system of the UAE via a 220 kV line from the Mahadah (Al Wasit) grid station to Al Foah. Through this interconnection, Oman is also connected to its neighbouring countries via the Gulf Connecting Countries Interconnecting Authority’s grid interconnection system, which facilitates the transmission of power among the six connected countries – Kuwait, Saudi Arabia, Qatar, Bahrain, the UAE and Oman. The connection between Oman and the UAE was established in 2011.

Upcoming plans and investment

Under the OPWP’s renewable energy development plan, the country will focus on increasing the share of renewables-based sources, mainly from solar, wind and waste-to-energy (WtE). The OPWP has set a target of generating 16 per cent of the total power from renewables-based sources by 2025, which will further increase to 30 per cent by 2030. To achieve this, the OPWP will competitively tender renewable energy-based projects to be developed by private sector entities.

As per the renewable energy plan, around 3 GW will be added by 2025, of which around 85 per cent (2.6 GW) will be solar based, 10 per cent (300 MW) wind based and 5 per cent (160 MW) WtE based. Some of the key projects planned are the 500 MW Ibri II and the 1,000 MW Manah solar PV IPP power plants, the 200 MW Duqm wind power plant, and the 160 MW BarkaWtE plant. In addition, the 700 MW Misfah IPP combined cycle power plant is planned to be commissioned by 2022.

To this end, future transmission investments in Oman are largely directed towards developing grid infrastructure to evacuate power from the planned renewable generation plants, meeting future load growth, expanding transmission network capacity in order to maintain and improve the reliability of the existing grid network, reducing interruptions, and benchmarking its transmission network performance to international standards.

A sum of OMR 477 million has been earmarked by the OETC as capital expenditure for 2019-23. The majority of this investment will be utilised for the addition of around 800 km of high voltage transmission lines, 12-15 grid stations and 8,200 MVA of transformer capacity. Of this, OMR 216 million will be invested in establishing infrastructure for evacuating power for generation plants, OMR 245 million for meeting load growth, OMR 10 million for non-load-related projects and OMR 5.6 million for the establishment of common assets.

One of the major upcoming projects is the Nort-South Oman Interconnector Project, which aims to connect the country’s north and south electricity grids. Phase I of the project, which is valued at OMR 100 million, includes the establishment of the 400/132/33 kV Duqm grid station, the 400/132 kV Nahada, Barik and Suwayhat grid stations, the 400/33 kV Mahout grid station, and around 380 km of 400 kV overhead lines (OHLs) interconnecting the grid stations connecting Duqm to Izki via Mahout. The project aims to meet the power demand of Tanweer and Duqm, and to make provision for transmission access to areas with potential renewable energy development. Several engineering, procurement and construction tenders for the same were invited during the first month of 2020.

Tenders for other key projects are also expected to be launched in 2020. These include tenders for the 400/132 kV Jefnen grid station, the 220/132 kV Misfah grid station, the 220/132 kV Airport Heights grid station, the 132/33 kV WtEBarka IPP grid station, the 400/132 kV Rustaq grid station, the 400 kV Manahgrid station and the 132/33 kV Saih Al Kairat grid station, and the 240 km long 400 kV and 100 km long 132 kV OHLs.

Moreover, the utility is taking initiatives to digitalise its grid network. In 2019, Swedish-Swiss ABB was awarded a contract for installing a high-reliability grid communications technology solution for protecting the OETC’s critical digital electrical infrastructure. The utility has also engaged Belgian OTN Systems to construct an XTran telecommunication backbone for its grid network. Under this, a new 10G network based on multiprotocol label switching-transport profile (MPLS-TP) will be constructed for more than 30 substations, as well as the load despatchcentre and the backup centre.


The privatisation move is expected to benefit Oman’s power sector by creating a competitive electricity industry in the coming years. The country is also looking to move towards an energy sustainable future with the development of renewables-based capacity. In line with this, plans have been laid out to undertake requisite investments that ensure the creation of an efficient and strong interconnected grid network.


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