Oman power demand set to grow after unprecedented slump

MODEST UPTICK: Demand growth to average 4 per cent annually over the 2021-2027 timeframe

The Sultanate’s power sector authorities anticipate a modest, but steady, uptick in electricity demand over the next several years after last year’s historic dip in consumption stemming from effects of the global economic downturn, compounded by the coronavirus pandemic.

The Authority for Public Services Regulation (APSR), citing the latest 7-Year Outlook Statement of Oman Power and Water Procurement Company (OPWP), revealed that electricity demand in the Sultanate is projected to grow by an average of 4 per cent annually over the next seven years, encompassing the 2021-2027 timeframe.

This compares with a 2.3-per cent decline in demand during 2020, reversing for the first time a robust year-on-year uptick in consumption since 2005, when the sector was restructured and overhauled.

The regulator noted in its newly published 2020 Annual Report that peak demand in the Main Interconnected System (the main grid covering much of northern half of Oman) is projected to rise 4 per cent annually in the ‘expected case’ to reach 8,371 MW in 2027.

In the ‘low case’ scenario, however, annual growth is projected at around 2 per cent to achieve peak demand of 7,133 MW at the end of the timeframe.

In the ‘high case’ scenario, peak demand is estimated at 9,609 MW amid annual growth of 6 per cent during this timeframe.

Growth trends are similar in the Dhofar System, which covers much of Dhofar Governorate.

In the ‘expected case’ scenario, peak demand is expected to grow 4 per cent annually to reach 707 MW in 2027.

Corresponding figures for the ‘low case’ and ‘high case’ scenarios are 2 per cent (602 MW) and 6 per cent (811 MW) respectively. A key driver for the ‘high case’ projection is a strong uptrend in industrialisation, according to the report.

In contrast, total electricity supply fell 2.3 per cent to 32,990 gigawatthours (GWH) in 2020, down from 33,756 GWH a year earlier.

The Authority attributed the decline to a pandemic-linked reduction in power production resulting from a series of lockdown decisions during the year.

Net generation in the MIS grid was lower by 1.3 per cent in 2020, further slumping by 7.6 per cent in the Dhofar System.

However, the Rural Areas Electricity Company (Tanweer) reported a 7.9-per cent growth in net output during the year.

The Authority is “currently undertaking a detailed assessment of the planning and procurement practices of the electricity as a whole with the objective of more effective capacity utilisation and planning, moving forward”, it added.

The regulator noted in its newly published 2020 Annual Report that peak demand in the Main Interconnected System is projected to rise 4pc annually in the ‘expected case’ to reach 8,371 MW in 2027