Record gain in Oman’s power distribution losses reduction

Electricity distribution losses occurring across the Main Interconnected System (MIS), the grid serving much of the northern half of the Sultanate, fell to their lowest in the sector’s history — a testament to longstanding efforts by the nation’s electricity authorities to reduce losses that cost the industry several millions of Omani riyals every year.

Distribution losses decreased to 8.7 per cent in 2016, down from 9.5 per cent a year earlier, tracking a largely downward trend that began more than a decade ago at the outset of the sector’s restructuring and privatisation in 2005. At their peak, distribution losses accounted for nearly a quarter of all electricity supply in the North Oman grid, registering a high of 24.6 per cent in 2004.

Driving these improvements in electricity loss reductions are a combination of incentives, and conversely some penalties as well, aimed at encouraging the sector’s transmission and distribution companies to achieve incremental reductions in transmission and distribution losses, according to officials at Nama Group, the holding company grouping all the state-owned generation, procurement, transmission, supply and distribution entities.

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, say experts.

While the MIS posted significant gains in electricity loss reductions last year, areas served by the Dhofar Power System (DPS) covering much of Dhofar Governorate, and the Rural Areas Electricity Company (RAECO), covering areas lying outside the nation’s two main grids, however registered a growth in distribution losses last year.

RAECO, a subsidiary of Nama Group, recorded distribution losses of 14.8 per cent last year, up from a low of 10.7 per cent posted in 2015. Electricity losses in the Dhofar Power System rose slightly to 10 per cent in 2016, up from 9.7 per cent a year earlier.

According to the Authority for Electricity Regulation Oman, loss reductions are of considerable economic value in terms of achieved and future cost savings. The significant loss reductions achieved since the sector’s restructuring in 2005 reflect the application of a clear incentive-based price control mechanism and the constructive responses of transmission, distribution and supply licensees.

Conrad Prabhu