Power losses reduction saves millions of riyals for sector

MAJOR GAINS: Electricity losses in the nation’s two main grids fell to 8.4 per cent in 2017, down from 8.8 per cent a year earlier

The Sultanate’s distribution and supply companies have notched up further gains in reducing the amount of electricity lost due to various technical and non-technical factors — improvements that translate into millions of Omani riyals in savings to the sector, as well as the economy.

Electricity losses in the nation’s two main grids — the Main Interconnected System (MIS) covering the northern half of the Sultanate, and Dhofar Power System (DPS) serving much of Dhofar Governorate — fell to 8.4 per cent in 2017, down from 8.8 per cent a year earlier.

“Distribution Losses reduced to 8.3 per cent in MIS (down from 8.7 per cent in 2016) due to metering and distribution network enhancements and better management practices.

DPS distribution losses marginally reduced to 9.70 per cent in 2017 (down from 9.98 per cent in 2016),” said Nama Group — the holding company of state-owned power generation, procurement, transmission, distribution and supply entities, in its 2017 Annual Report. Transmission and distribution losses are inherent in any electricity network and mainly occur because of power dissipation in system components such as transmission lines, power transformers, measurement systems, and so on. There are also losses that are non-technical in nature and may occur as a result of metering breakdowns, unmetered energy, and so on, according to experts.

In the Sultanate, system losses — as they commonly referred to — have been steadily declining since 2004 when the electricity sector was restructured and substantially privatised.

Prior to this transition, technical losses accounted for as much as a quarter of electricity supplied to the MIS, for example.

However, following a path-breaking reduction strategy driven by the Authority for Electricity Regulation Oman (AER), transmission and distribution losses have been on the decline over the past 14 years — a downtrend attributed primarily to an incentive-based price control mechanism implemented at the direction of the regulator.

Importantly, all four grid-connected distribution and supply companies of Nama Group posted heartening reductions in electricity losses in 2017. Muscat Electricity Distribution Company (MEDC) posted the best score with losses pared to 6.92 per cent (down from 7.49 per cent in 2016). Mazoon Electricity Company (MZEC) came next with 9.08 per cent (down from 9.26 per cent in 2016), followed by Majan Electricity Co (MJEC) with 9.3 per cent (down from 9.9 per cent in 2016). Also posting a relatively good score was Dhofar Power Company with 9.7 per cent (down from 9.98 per cent in 2016).

Losses reductions are of considerable economic value in terms of achieved and future cost savings, according to the sector regulator.

The cumulative value of loss reductions over the past 14 years since 2004, if assessed against a peak loss of 24.6 per cent recorded that year, runs into hundreds of millions of Omani riyals, not including investment savings in generation and network infrastructure, which would significantly increase the value of losses reduction benefits.