Annual Report 2019 6 Annual Report 2019 7 GLOSSARY of TERMS
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The Late His Majesty Sultan Qaboos bin Said المغفور لـه حضـرة صـاحب الجـﻻلـة السلطان قابوس بن سعيد - ّطيب ّالله ثراه- السلطان هيثم بن طارق المعظم 3 Social Studies txt.indd 3 5/7/20 9:07 AM His Majesty Sultan Haitham Bin Tariq المغفور لـه حضـرة صـاحب الجـﻻلـة السلطان قابوس بن سعيد - ّطيب ّالله ثراه- السلطان هيثم بن طارق المعظم 3 Social Studies txt.indd 3 5/7/20 9:07 AM Annual Report 2019 6 Annual Report 2019 7 GLOSSARY OF TERMS 8 Annual Report 2019 BOO Build Own and Operate Bulk Supply Tariff (BST) Tariffs charged by PWP and RAEC for bulk supplies of electricity and water, where such tariffs are calculated each year and approved by the Authority; DPC The Dhofar Power Company SAOC DPS Dhofar Power System connecting the systems of DPC and OETC in Dhofar region EPC Engineering, Procurement and Construction ERWS Electricity and Related Water Sector GCCIA Gulf Cooperation Council Interconnection Authority I(W)PP and IPP Independent Power and Water Project Main Interconnected System or The interconnected systems of OETC, and the Muscat, MIS Majan and Mazoon Discos Majan or MJEC The Majan Electricity Company SAOC Mazoon or MZEC The Mazoon Electricity Company SAOC MAR Maximum Allowed Revenue MHEW The Ministry of Housing, Electricity and Water OETC The Oman Electricity Transmission Company SAOC Omanisation The policy for the employment of Omani nationals as issued from time to time by the Government of Oman Permitted Tariff Tariffs Customers are obliged to pay in consideration for Supply of electricity or for Connection to a Distribution System or a Transmission System, which tariff shall be determined in the manner stipulated in Article (9) of the Sector Law PAW The Public Authority for Water PWP The Oman Power and Water Procurement Company SAOC RAEC The Rural Areas Electricity Company SAOC OMR Omani Rial ROP Royal Oman Police SCRC Schedule Charge Restriction Condition Sector Law The law for the regulation and privatization of the electricity and related water sector promulgated by Royal Decree 2004/78 as amended by Royal Decree 2009/59 and 47/2013 Related Water Desalinated water in the Sultanate of Oman which is combined or co-located with the electricity sector and which is subject to regulation The Authority The Authority for Electricity Regulation, Oman, being the authority established pursuant to Article (19) of the Sector Law as amended Annual Report 2019 9 CONTENT 10 Annual Report 2019 CHAIRMAN’S FOREWORD 12 Electricity and Water Sector Market Structure 14 Electricity & Water Sector Activity and Statistics 16 System Losses 26 System Peak Demands: MIS and Dhofar Power System in 2018 and 2019 27 Electricity Demand Forecasts 28 Approved Projects and Capital Expenditure: 2019 28 EWS Employment & Omanisation: 2018 and 2019 30 Electricity Subsidy 32 Electricity Tariffs 39 Electricity & Related Water Sector Issues in 2019 44 Regulatory Focus 1# Energy Efficiency 47 Regulatory Focus # 2 The Impacts of CRT on large customers 50 ARTICLE (29) REPORTING Further Market Liberalisation 55 REGULATION 56 Customer Affairs Directorate 60 Economics Affairs 62 Directorate of Technical Regulation 63 Directorate of Legal & Regulatory Affairs 65 Annex A: Audited Financial Statements 68 Annex B: Authorised Entities 94 Annex C: Electricity & Water Sector Statistics 100 Annex D: Electricity Subsidy Calculations 139 Annex E: 2020 Forward Work Programme 147 Annual Report 2019 11 CHAIRMAN’S FOREWORD On behalf of the Authority, it is with great pleasure that I present our Annual Report for 2019. The electricity and water sector sustained its growth and development since the restructuring. The main highlights of 2019 were as follows: • The number of electricity customer intensity is an important driver accounts in the Sultanate increased of electricity demand that has by 58,122 or 4.8% from 1,219,156 in implications for costs and subsidy. 2018 to 1,277,278 in 2019. Residential If the 1,277,278 registered accounts customers accounted for 66.0% in 2019 had the same average of the increase in accounts. Since intensity as in 2005, electricity supply the 2005 market restructuring the in 2019 would have been 32%, or number of electricity accounts has 10.9 TWh lower with corresponding increased 747,027 or 141%. reductions in costs and subsidy; • Sector gas use increased by 9.8% • Electricity Supply in 2019 reached in 2019 while gross electricity and 33.8 TWh, 0.7% higher than in 2018 water production increased by and 255% higher than in 2005. 1.3% and 8.2%, respectively due to efficient use of gas. • The Authority’s measure of • The actual data of the supplied units electricity Intensity (MWh per and units included in the electricity account) reached 26.5 in 2019, networks in the Sultanate in 2019 lower than 2018 by 3.8% and 47.8% - which represent approximately higher than in 2005. Increasing (90%) of the total supply to the Annual Report 2019 12 Sultanate - indicated in MIS losses, • The electricity sector benefited from reaching (8.4%) while the Dhofar Power 565.4 million Rial Omani of support from losses were (10.6%) in 2019, compared the Ministry of Finance in 2018: 418.0 to (9.3%) in 2018. RAEC losses reached million Rial Omani of MIS subsidy, 104.4 (11.7%) in 2018 to (15.1%) in 2019. million Rial Omani of Dhofar Power System subsidy and 43.0 million Rial • In 2019 Direct employment was Omani of RAEC subsidy. 12% higher than in 2018. Indirect employment in 2019 (9,901) was 31% • Electricity licensees approved 355 higher than the previous year. Omani electricity related projects in 2019 with nationals accounted for 93% of Direct a total value of OMR 132.6 million, these employment in 2019 and for 45% of projects will support the provision of Indirect employment, contributing to a electricity services in all of the Sultanate’s sector Omanisation rate of 55%. regions; and • The Authority received 91 new customer • The cost of regulating the electricity and complaints and resolved 80 outstanding related water sector in 2019 was around customer complaints. OMR 3.8 per Customer account, less than 1.58 baiza per kWh Supplied and • In 2019, Mohammed Al Tobi, Regulatory less than 0.25% of total electricity and Engineer, completed an MSc in Energy around water sector turnover, metrics and Sustainability with Electrical Power we believe compare favourably to in Engineering from Southampton international benchmarks of regulatory University- UK. The Authority extends to costs. Mohamed the warmest congratulations for this achievement. Members would particularly like to acknowledge with thanks the hard work of Authority staff who contributed to and are responsible for the activities and work described in this report. Saleh bin Hamood Al Rashdi Chairman of Authority for Electricity Regulation, Oman Annual Report 2019 13 ELECTRICITY AND WATER SECTOR MARKET STRUCTURE Main Interconnected System SMN Barka Sohar ACWA 26 MIGD 33 MIGD 30 MIGD Oman Electricity 677 netMW 585 netMW 427 netMW Muscat Transmission Company SAOC Electricity Distribution Company Musca DC Transmission Supply:11,507 GWh 42 MIGD Al Sharqia Accounts: 406,274 29 MIGD Al Sawadi Al Batinah 741 netMW 741 netMW Mazoon Majan Electricity Company Electricity Company Supply: 8,798 GWh Phoenix AD Dahirah Accounts: 447,428 Supply: 9,314 GWh Generation Accounts: 250,800 2000 netMW 1,509 netMW Procurement Distribution and Supply Oman Power & Water Shinas Qurayyat DC Procurement 254 netMW 271 netMW 61.8 MIGD 665 netMW 1,710 netMW 44 netMW UPC Al Kamil Barka Al Rusail Rural Systems Rural Areas Electicity Company SAOC 69.4 MIGD Rural Areas Rural Areas 274 netMW Electicity Company SAOC Electicity Company SAOC Transmission Supply:1,102 GWh Accounts: 41,586 Bahwan ﻣﺴﻨﺪم Astonfield (ﺳﻠﻄﻨﺔ ﻋﻤﺎن) Musandam 717 netMW (Sultanate of Oman) ﻣﺪﺣﺎء (ﺳﻠﻄﻨﺔ ﻋﻤﺎن) Madha (Sultanate of Oman) Generation ﺷﻤﺎل اﻟﺒﺎﻃﻨﺔ Al Batinah اﻟﺒﺮﻳﻤﻲ Al Buraymi North ﺟﻨﻮب اﻟﺒﺎﻃﻨﺔ ﻣﺴﻘـﻂ Al Batinah South Muscat Distribution and Supply اﻟﻈﺎﻫﺮة Adh Dhahirah ﺷﻤﺎل اﻟﺸﺮﻗﻴــﺔ Ash Sharqiyyah ﺟﻨﻮب اﻟﺸﺮﻗﻴــﺔ North Ash Sharqiyyah اﻟﺪاﺧﻠﻴــﺔ South Dhofar Power System Adh Dakhliyyah Sembcorp Salalah 15MIGD Oman Electricity Dhofar 445 netMW Transmission Company SAOC Power Company ﻣﺼﻴﺮة Masirah Transmission Supply:3,076 GWh Accounts: 121,190 اﻟﻮﺳﻄﻰ Al Wusta Dhofar 717 ﺷﺮﻛﺔ ﻛﻬﺮﺑﺎء اﻟﻤﻨﺎﻃﻖ اﻟﺮﻳﻔﻴﺔ ش.م.ع.م ﻇﻔــﺎر Dhofar Rural Areas Electricity Company SAOC ﺷﺮﻛﺔ ﻛﻬﺮﺑﺎء ﻣﺰون ش.م.ع.م Mazoon Electricity Company SAOC Generation ﺷﺮﻛﺔ ﻛﻬﺮﺑﺎء ﻣﺠﺎن ش.م.ع.م ﺟﺰر اﻟﺤﻼﻧﻴﺎت Juzur Al Hallaniyyat Majan Electricity Company SAOC ﺷﺮﻛﺔ ﻣﺴﻘﻂ ﻟﺘﻮزﻳﻊ اﻟﻜﻬﺮﺑﺎء ش.م.ع.م Muscat Electricity Distribution Company SAOC Procurement ﺷﺮﻛﺔ ﻇﻔﺎر ﻟﻠﻄﺎﻗﺔ ش.م.ع.م Dhofar Power Company SAOC Distribution and Supply Oman Power & Water Procurement Annual Report 2019 14 Main Interconnected System SMN Barka Sohar ACWA 26 MIGD 33 MIGD 30 MIGD Oman Electricity 677 netMW 585 netMW 427 netMW Muscat Transmission Company SAOC Electricity Distribution Company Musca DC Transmission Supply:11,507 GWh 42 MIGD Al Sharqia Accounts: 406,274 29 MIGD Al Sawadi Al Batinah 741 netMW 741 netMW Mazoon Majan Electricity Company Electricity Company Supply: 8,798 GWh Phoenix AD Dahirah Accounts: 447,428 Supply: 9,314 GWh Generation Accounts: 250,800 2000 netMW 1,509 netMW Procurement Distribution and Supply Oman Power & Water Shinas Qurayyat DC Procurement 254 netMW 271 netMW 61.8 MIGD 665 netMW 1,710 netMW 44 netMW UPC Al Kamil Barka Al Rusail Rural Systems Rural Areas Electicity Company SAOC 69.4 MIGD Rural Areas Rural Areas 274 netMW Electicity Company SAOC Electicity Company SAOC Transmission Supply:1,102 GWh Accounts: 41,586 Bahwan ﻣﺴﻨﺪم