Oman issues new policy to liberalise electricity market, boost renewal energy

Muscat : The policy also aims to promote renewable energy in power generation, and regulate self-generation and direct sale operations.It aligns with Oman’s broader vision to foster sustainable development and attract investment in clean energy, while balancing the interests of both investors and consumers.
The self-generation policy aims to regulate the process of electricity self-generation from renewable sources to meet consumer needs, with the obligation to obtain specific licenses from the Authority for Public Services Regulation (APSR).

Small-scale projects that fall below a certain production threshold will be exempt from direct coordination with the Ministry, streamlining their implementation. An annual cap on self-generated electricity will be established in coordination with the APSR to ensure harmony between self-generation efforts and national grid requirements.

Under the policy, self-generators are also permitted to own and operate energy storage equipment if deemed economically viable, enhancing flexibility in renewable energy consumption. Consumers opting for self-generation must inform the relevant authorities of their plans to ensure alignment with national energy strategies.
The direct sale policy governs the sale of electricity produced from renewable energy directly by certified production companies to qualified consumers, without the need to return to the Oman Power and Water Procurement Company.

Operations will comply with regulations issued by the APSR, with an annual limit on the amount eligible for direct sale in coordination with other authorities. Consumers engaging in direct sales will pay a special tariff for electricity transmission, designed to maintain grid stability and prevent undue burdens on other users.

The electricity transmission aspect of the policy allows for the transfer of electricity produced for direct sale through the national grid owned by licensed transmission and distribution companies, adhering to regulatory controls set by the APSR. The policy also ensures the consistency of energy production with the annual goals for renewable energy expansion, as outlined by the relevant authorities.

His Excellency Mohsen bin Hamad Al Hadhrami, Undersecretary of the Ministry of Energy and Minerals, emphasised that the new policy is a vital step in advancing Oman’s energy sector. He explained that the policy provides a comprehensive regulatory framework for the implementation of self-generation projects and direct sales, boosting energy infrastructure while fostering a competitive and sustainable investment environment.

He further highlighted the policy’s alignment with Oman’s broader energy goals, particularly the target to generate 90 percent – 100 percent of the country’s electricity from renewable sources by 2050.
The policy supports the enhancement of energy efficiency, diversification of energy sources, and a reduction in carbon emissions, all of which contribute to achieving Oman’s net neutrality objectives by mid-century.