MUSCAT: Oman’s electricity market is set for a major transformation following the introduction of a new regulatory framework allowing renewable energy producers to sell electricity directly to eligible consumers, ending the sector’s long-standing reliance on a single-buyer model for renewable power transactions.
According to legal experts, the Authority for Public Services Regulation’s (APSR) Decision No. 54/2026 represents a significant milestone in the liberalisation of Oman’s electricity sector and is expected to create new opportunities for renewable energy developers, industrial users and investors.
Issued on April 20, 2026, the Regulatory Framework for Direct Sale permits “Qualified Sellers” of renewable energy to supply electricity directly to “Qualified Subscribers” under approved conditions, creating a new bilateral market outside the traditional procurement structure managed by Nama Power and Water Procurement Company (PWP).
Legal specialists at prominent Omani legal services firm Al Busaidy, Mansoor Jamal & Co (AMJ) explain that ever since the enactment of the Sector Law under Royal Decree 78/2004, PWP has held the exclusive right to purchase electricity generation capacity and output in Oman. The single-buyer model was designed to ensure supply security, coordinate procurement and support the orderly development of the electricity sector.
However, as Oman’s renewable energy industry has matured and the government has accelerated its sustainability and private sector participation objectives under Oman Vision 2040, regulators have introduced greater flexibility to encourage direct investment in clean energy projects.
Under the new framework, renewable energy projects will be classified according to capacity and developer eligibility. Projects exceeding 50 MW per subscriber will initially be reserved for the National Champion Company under government-approved guidelines, while smaller projects ranging from above 25 MW to 50 MW, and projects between 0.25 MW and 25 MW, can be developed by qualified sellers subject to location and licensing requirements.
Projects below 0.25 MW will be reserved for implementation by small and medium enterprises holding a Riyada certificate, opening opportunities for local businesses to participate in distributed renewable energy development.
Qualified sellers must obtain the necessary electricity generation licences, be locally registered and ensure that electricity production comes from renewable sources. Projects above 25 MW will also require approval from the Ministry of Energy and Minerals.
The framework introduces an annual quota system for direct sale capacity, with APSR coordinating with government entities, utilities and industry stakeholders to determine the permitted share based on national energy policies, grid capacity and technical considerations.
One of the most significant changes is the commercial flexibility provided to market participants. Qualified sellers and subscribers will be able to negotiate electricity prices directly without regulatory price controls, allowing agreements to be structured according to commercial requirements.
The framework also establishes technical safeguards to protect grid stability. The Oman Electricity Transmission Company (OETC) will conduct grid impact studies for direct sale projects, while developers and subscribers will bear connection and technical upgrade costs where required. Metering and energy wheeling arrangements will be managed by transmission and distribution licensees.
In cases where renewable generators cannot meet contracted supply levels, licensed suppliers will provide backup electricity under approved tariffs, ensuring continuity of supply for consumers.
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