Oman's electricity consumption is expected to witness a consistent increase in the coming years, as outlined in the recently released report "Electricity 2024: Analysis and forecast to 2026” by the International Energy Agency. The report, which offers insights into Oman's energy landscape, highlights the country's aims to diversify its energy mix and reduce reliance on traditional fossil fuels.

One of the key findings of the report is that Oman's electricity consumption grew by an estimated 2.5% in 2023. This growth trend is projected to continue with an anticipated annual growth rate of around 3% for the next three years. As a result, Oman is taking strategic steps towards enhancing its power generation infrastructure and embracing renewable energy sources.

Currently, Oman's electricity generation is primarily reliant on natural gas, which accounts for 93% of the country's energy mix. However, with increasing concerns about energy security and sustainability, Oman has set ambitious targets to expand its renewable energy capacity.

The report highlights the upcoming implementation of two solar photovoltaic power plants, Manah I and II, with a combined capacity of 1,000 MW. These plants, scheduled to commence operations in 2025, will significantly bolster Oman's renewable energy output, nearly tripling the existing capacity from renewables.

Furthermore, to facilitate the development of new production capacities and improve transmission infrastructure, Oman has initiated the Rabt project. This project, which costs RO 183 million and was launched on December 14, 2023, aims to connect the north and south standalone grids of the country.

A key milestone in this endeavour was accomplished in August 2023, with the commissioning of the Suwayhat grid station, a critical $49 million infrastructure project undertaken by the Oman Electricity Transmission Company (OETC) which owns and operates the country’s transmission system. Meanwhile, Duqm and Mahout grid stations were completed and energised in Oct 2023 with total investments of more than $99 million.

Additionally, a competitive tender has been launched for a 132/33 kV grid station on Masirah Island, which will be linked to the mainland through a subsea cable, thereby reducing the island's dependence on diesel-fired power generation.

While transitioning towards a more sustainable energy future, Oman acknowledges the importance of uplifting the existing subsidy framework. In response to the energy crisis, the Omani government has already increased electricity subsidies by 15% in 2022 and 2023.

However, comprehensive reforms are underway, aiming to gradually raise utility tariffs, ultimately leading to the elimination of subsidies by 2025. These reforms are expected to ensure a more efficient allocation of resources and encourage responsible energy consumption.