Oman Energy Situation

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Country Name
Capital Maskat
Official Languages(s) Arabic
Government Monarchy
Head of State Sultan Qabus bin Said bin Taimur Al Said
Total Area 309,500 km²
Population 3,154,134 (July 2013 est.)
Rural Population -
GDP (Nominal) US$ 69.97 billion (2011)
GDP Per Capita US$ 23,133 (2011)
Currency Omani Rial
Time Zone GST (UTC+4)
Electricity Generation 19.81 TWh (2011)
Access to Electricity 98.0 %
Wind energy (installed capacity) - MW (year)
Solar Energy (installed capacity) - MW (year)

Overview

Economically, Oman depends on oil resources. Due to a decline of oil resources, the country increasingly seeks to diversify, industrialize and privatize the economy. Oman's export products are petroleum, reexports, fish, metals and textiles. In 2012, the country's main export partners were China (31.9%), Japan (12.9%), United Arab Emirates (10.1%), South Korea (10%), Thailand (4.4%) and Singapore (4.4%). Oman imports mainly machinery and transport equipment, manufactured goods, food, livestock and lubricants. In 2012, products are primarily imported by the United Arab Emirates (23.6%), Japan (12.6%), India (8.5%), China (6.4%) and the US (6.1%).[1]



Energy Supply

Energy Production

In 2011, Oman has produced a total amount of 73,508 ktoe of energy, which is about 3,078 PJ or 854,898 GWh. Its sole energy sources are crude oil (65%) and gas (35%). Oman has no other energy sources, such as coal, nuclear power, heat, or renewable energy. The following table provides an overview of Oman's energy production in 2011.[2] Between 2005 and 2012 the supply of electricity has been increased by 11.4 TWh (+120%) and could respond to the fast growing demand of electricity.[3]


Table 1: Total Energy Production of Oman (2011)[2]:

Energy Source in ktoe in PJ in %
Coal and Peat 0 0 0
Crude Oil 47,406 1,985 65
Oil Products 0 0 0
Gas 26,102 1,093 35
Hydro 0 0 0
Geothermal, Solar etc. 0 0 0
Biofuel and waste 0 0 0
Electricity 0 0 0
Heat 0 0 0
Total 73,508 3,078


The installed capacity has been increased from 2007 to 2011 by 42% to 4,861 MW. In 2012, two power stations were finished, one in Salalah (445 MW) and the other in Rusail (665 MW). With the involvement of KfW and Siemens, the two power stations Sohar 2 and Barka 3 (both 744 MW) went on stream in April 2013. Further power stations are under construction and tender processes for 2 other station are under way.[4]



Energy Supply

The total primary energy supply in Oman was 25,276 ktoe in 2011, which is consistent with 1,058 PJ or 293,959 GWh (see table 2). Unlike the national energy production, gas accounts for the largest amount of primary energy supply in Oman (18,040 ktoe), followed by crude oil (9,927 ktoe). Oman is a fossil fuel exporting country. In 2011, the country was exporting 39,481 ktoe of crude oil, 2,152 ktoe of oil products and 9,797 ktoe of natural gas.[2]


Table 2: Total Primary Energy Supply of Oman (2011)[2]:

Energy source in ktoe in PJ
Coal and Peat 0 0
Oil 9,927 416
Oil Product -2,690 -113
Gas 18,040 455
Nuclear 0 0
Hydro 0 0
Geothermal, solar, etc. 0 0
Biofuel and waste 0 0
Electricity 0 0
Heat 0 0
Total 25,276 1,058



Energy Consumption

Oman's total final consumption (TFC) has steadily been increased in recent years. While in 2000 the energy consumption accounted for 588 ktoe (6,833 GWh),[5] energy consumption has added up to 1,591 ktoe (18,512 GWh) by 2011. Comparing various sectors with each other, the residential sector consumes the most energy, namly 49%, followed by the sector of commercial and public services (34%) and the industry (14%).[6] The excect figures are outlined in the following table.


Table 3: Oman's TFC of Energy (2011)[6]:

Sector

Consumption in ktoe

Consumption in GWh

in %

Industry

222

2,583

14

Transport

0

0

0

Residential

779

9,060

49

Commercial and Public Services

549

6,380

34

Other non-specified

40

489

2.6

TFC

1,592

18,512





Energy Sources

According to the data of the International Energy Agency mentioned above, Oman has not installed any noteworthy capacities based on renewable energy. Solar energy is only used for water heating systems for tanks located on the roofs of private houses. Additionally, solar energy is used by the oil production industry. On the one hand it is used to power small equipment which is located in remote areas. On the other hand, solar energy is important for the steam production to extract oil from oil fields in the desert.[7]

In the wake of a renewable energy study of the Authority for Electricity Regulation, the Authority and the Rural Areas Electricity Company SAOC (RAECO) sought to initiative pilot project which could not be implemented yet. The Authority is aware of two major barriers. First, there are no policy framework or policy instruments which support the deployment of renewable energy project. Second, Oman subsidizes fossil fuel which renders electricity based on renewable energy more expensive.[3]



Hydropower

Producing electricity by wave energy is possible along the Arabian See coast. But in comparison to other locations in the world and compared to solar and wind energy resources, the energy density and hence the potential is relatively low.[7]


Solar Energy

Oman has one of the highest solar densities in the world. Solar energy has even the potential to provide sufficient electricity to meet all of Oman’s national electricity demand. So far, solar energy is only used on private roofs to heat up water and in the oil production industry.[7]

The study on renewable energy in Oman has evaluated the solar insolation which varies from 4.5 to 6.1 kWh/m² per day. This corresponds to 1,640 to 2,200 kWh per year. Due to the fact that Oman’s solar insolation is characterized by a significant variance between the minimum and maximum values, a backup system has to be installed for those days with little solar insolation. Oman has the highest solar insolation during the summer period, when the electricity demand is also high. A possible surplus that is generated during the summer period might be exported since a seasonal storage is not available. While the regions in the deserts have the highest solar potential, coast areas in the southern part of Oman have a lower solar irradiation.[7]


Biomass

Biogas

There is only limited potential for biogas electricity production in Oman since the available waste water, agriculture waste and animal dung is used mostly a fertilizers. Animal waste is additionally spread over large areas which makes the collection of sufficient quantities difficult and expensive.[7]

Water waste systems are operated in Muscat and Salalah by the Oman Wastewater Services and Salalah Wastewater Services Company. Both countries have the exclusive concession rights to build and operate waste water systems. Several sewer networks and treatment plant are at work throughout the country and are run by the Ministry of Regional Municipalities and Water Resources.[7]


Wind Energy

Oman has significant wind energy potentials in coastal areas in the South and in the mountains situated north of Salalah. The highest wind speeds have been identified in the Dhofar Mountain Chain which is north of Salalah. The North and Western parts of Oman are the low wind speed areas. During the summer time, which is the peak period of electricity demand in Oman, the highest wind energy speeds were observed.[7]

Regarding the installation of wind turbine capacity in Oman, the technical future potential will be at least 750 MW. A technical limitation for the installation is the availability of open land without obstacles for erection of the turbines. The best locations for installing a total capacity of 750 MW would be in the mountains north of Salalah and in the coastal region of Sur. In total, an area of 100 km² is required consisting of 375 turbines with a capacity of 2 MW each.[7]


Geothermal Energy

Fossil Fuels

Key Problems of the Energy Sector

Renewable energy projects face four major barriers: (1) Cost competitiveniss and cost structure, (2) Intermittency, (3) Scale and (4) the legal Framework.[7]


Policy Framework, Laws and Regulations

General Energy Policy, Energy Strategy

Due to the high dependency on domestic gas and diesel, the Authority for Electricity Regulation (see for a description chapter “Institutional Set-up in the Energy Sector”) seeks to diversify the electric generation process. Besides importing gas, the Authority
for Electricity Regulation remains committed to include renewable energy resources into the country’s energy system. Still, Oman lacks a policy framework, policy instruments and fuel subsidies which prevent the deployment of renewable energy.[3]




Important Laws and Regulations

Specific Strategies

(Biomass, Renewable Energies, Rural Electrification, Energy Access Strategy, Poverty Reduction Strategy etc.)




Institutional Set-up in the Energy Sector

The Authority for Electricity Regulation is responsible for the regulations of the electricity and the water sector. It was established in 2004 based on a Royal Degree (78/2004) and according to article 19 of the Law for the Regulation and Privatization of the Electricity and Related Water Sector. The Authority's duty is to secure the provision of electricity and water services in Oman.[8]

The Rural Areas Electricity Company SAOC (RAECO) is an Omani company which provides electricity to customers all over the Sultanate of Oman. It was established in 2005 according to the electricity sector & related water privatization law pursuant to the royal degree No 78/2004. The company is responsible for electricity generation, transmission, distribution & supply and desalination activities under a license issued by Authority for Electricity Regulation.[9] The Royal Degree 79/2004 also issued an electrification funding to provide electricity in remote areas. According to the World Bank, access to electricity amount to 98.0 %.[10]


Activities of Donors and Implementing Agencies

Further Information

References

  1. The World Factbook: Oman, last updated on August 22, 2013, https://www.cia.gov/library/publications/the-world-factbook/geos/mu.html.
  2. 2.0 2.1 2.2 2.3 International Energy Agency (IEA), Oman: Balances for 2011, http://www.iea.org/statistics/statisticssearch/report/?country=OMAN&product=balances&year=2011
  3. 3.0 3.1 3.2 Authority for Electricity Generation, Annual Report 2012,fckLRhttp://www.aer-oman.org/images/aer320.pdf
  4. Germany Trade & Invest (GTAI), MENA-Region im Fokus 2013 - Oman, http://www.gtai.de/GTAI/Navigation/DE/Trade/maerkte,did=830350.html
  5. International Energy Agency (IEA), Oman: Electricity and Heat for 2000, http://www.iea.org/statistics/statisticssearch/report/?country=OMAN&product=electricityandheat&year=2000
  6. 6.0 6.1 International Energy Agency (IEA), Oman: Electricity and Heat for 2011, http://www.iea.org/statistics/statisticssearch/report/?&country=OMAN&year=2011&product=ElectricityandHeat
  7. 7.0 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 Authority for Electricity Regulation Oman, Study on Renewable Energy Resources, Oman, Final Report, May 2008, http://www.aer-oman.org/pdf/studyreport.pdf
  8. Authority for Electricity Regulation, About the Authority, http://www.aer-oman.org/index.php?option=com_content&view=article&id=67&Itemid=88
  9. Rural Areas Electricity Company SAOC (RAECO), About us, http://www.reefiah.com/aboutus.html
  10. World Bank, Data, Access to Electricity, http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS/countries