Electricity demand growth set to decline in Oman

Oman’s power authorities have pared their expectations of electricity demand growth over the next seven years spanning the 2020 – 2026 timeframe, citing in part the economic downturn sparked by low oil prices and the pandemic.

In the Main Interconnected System (MIS), which covers the northern half of the Sultanate and accounts for 90 per cent of total electricity consumption, peak demand is projected to grow at an annual rate of four per cent to reach 8,490 megawatts (MW) in 2026.  This compares with a power demand averaging 5 per cent announced last year for the 2019-2025 timeframe.

The latest projection is based on the ‘expected case’ – a scenario that represents the average of ‘low case’ and ‘high case’ estimations provided annually by Oman Power and Water Procurement Company (OPWP) as part of its planning of procurements of new electricity generation and water desalination capacity required to meet demand growth.

In the low-case scenario, OPWP projects annual growth of two per cent over the 2020 – 2026 timeframe, resulting in peak demand of 7,080 MW in 2026.  In comparison, demand growth under the low-case scenario was projected at three per cent last year.

Underscoring the same downtrend in demand, the high-case scenario projects annual growth of 7 per cent in power demand to reach peak demand of 10,220 MW in 2026.  Last year, the comparative rate under the high-case scenario was 8 per cent.

A similar dip in demand growth is also evident in the Dhofar Power System (DPS), which serves Salalah and the adjoining areas.  In the expected-case, peak demand is expected to grow at 5 per cent annually to reach 793 MW in 2025.  Compare that with a 6 per cent growth rate announced a year ago.

The low-case scenario for Dhofar projects an annual growth of 4 per cent over the 2020 – 2026 timeframe versus 5 per cent announced last year for the 2019 – 2025 period. In the high-case scenario, peak demand driven by rapid industrialisation is projected to grow 8 per cent to reach 938 MW by 2026, versus 9 per cent announced a year ago.

Commenting on the expected slump in electricity demand going forward, the Authority for Electricity Regulation (AER) said: “It is anticipated that 2020 will witness the first overall negative growth in supply since the restructuring of the electricity sector in 2005, a sharp fall from the decade after restructuring which saw consistent double-digit annual growth rates in supply. Supply growth in 2020 is expected to decrease by 1.1 per cent from 2019 outturn, mainly driven by the impact of the outbreak of the COVID-19 pandemic and the resulting downturn in the general economy.”