All existing generation companies in Oman have been competitively tendered and are 100% private except Rural Area Electricity Company, which is a government company concerned with generating electricity in areas not connected to the Main Interconnected System (MIS) or the Dhofar Power System (DPS). The Authority ensures that these competitions are conducted in a fair and transparent manner. In MIS and DPS, NPWP will pay the generation and desalination companies for the purchase of capacity and generation in accordance with the conditions stipulated in the power / water / water purchase agreements. The generation and desalination companies are also paying Oman Electricity Transmission Company for its network connection.
The Oman Electricity Transmission Company SAOC (OETC) is the monopoly provider of transmission services in the MIS and Dhofar Systems. OETC owns and operates the 400 kV, 220 kV and 132 kV interconnected transmission systems, and as system operator is responsible for the central dispatch of generating and desalination facilities connected to the MIS and Dhofar Systems.
After electricity is produced at the various power plants it has to reach the customers that use the electricity. High voltage transmission lines carry electricity long distances to a substation. The power lines go into substations near businesses, factories and homes. Here transformers change the very high voltage electricity back into lower voltage electricity. The distribution system is the last stage in the electricity production, as the distribution system reduces the voltage and then transfer electricity to customers. There are two companies licensed to distribute electricity in the Sultanate of Oman, which are Nama Electricity Distribution Company and Dhofar Integrated Services Company. The two companies pay the Oman Electricity Transmission Company to connect and use the transmission network.
Nama Supply Company is responsible for the electricity supply, billing, and fee collection activities in the Main Interconnected Network, while Dhofar Integrated Services Company is responsible for electricity supply, billing, and fee collection activities in the Dhofar Network. The supply companies also pay electricity transmission and distribution fees, and they also pay to Nama Power and Water Procurement Company for bulk electricity purchases through the Bulk Supply Tariff.
In accordance with Article No. (77) of the Electricity and Related Water Sector Regulation and Privatization Law, Nama Energy and Water Procurement Company determines the need for new electricity generation capacity during the calendar year and the next seven years, taking into account contracts for importing or exporting electricity. Thus, the company publishes the seven-year statement on the website, and the statement includes forecasts for demand for electricity, available production capacities from gas generation plants, and future plans to purchase capacities from renewable energy sources.
The company has an obligation to purchase economically, which means that it must purchase new capacity in an economical way, usually through a competition. The Authority for Public Services Regulatory ensures that these competitions are conducted fairly and transparently.