Omar Al Wahaibi, CEO, Nama Group: Interview

Interview: Omar Al Wahaibi

What needs to be done to reduce energy loss and improve efficient consumption?

OMAR AL WAHAIBI: Oman’s sole procurer of electricity, Oman Power and Water Procurement Company (OPWP), a member of Nama Group, ensures that the most efficient and suitable generation technology is utilised. This is encouraged and supported by the provisions of the Law for the Regulation and Privatisation of the Electricity and Related Water Sector 2004 (Sector Law), which mandates that OPWP must procure energy on the most economic basis. Combined-cycle gas turbines certainly play a prominent role in the sultanate’s current generation capacity and will continue to do so.

Energy efficiency is a far-reaching concept that involves the collaboration of many players, including the government, regulators, manufacturers and society, in order to be implemented. Increasing energy efficiency requires strategic fuel utilisation for electricity generation, adequate transmission and distribution, and economical consumption from customers. It calls for the specification of imported electrical equipment, guidelines for operating this equipment and building codes for insulations.

It also necessitates the introduction of renewables and electricity tariffs that promote the desired efficiency in consumption. Given the wide range of factors necessary for improving efficiency, I would say that the sultanate is at the beginning of the road, and that it has a long way to go in this field. There is momentum, and we hope that government policy in the future will enable the sector to pursue energy-efficiency objectives faster.

Distribution companies have achieved major improvements in energy loss minimisation over the past decade. In addition, the Authority for Electricity Regulation (AER) is incentivising companies to take action to reduce the electricity losses even further. These companies have prepared plans and initiatives. Currently, automatic metre reading (AMR) is applied to high-value customers whose consumption is above 150 MWh, and who are subject to the cost-reflective tariffs. AMR supports the reduction of electricity losses from these customers by obtaining accurate metre readings and detecting any issues in electrical connections that might increase electricity losses.

The implementation of AMR enables distribution companies to obtain the metre reading of these high-value customers multiple times throughout the day, and can thus apply cost-reflective tariffs (CRT). CRTs are designed to promote the efficient use of electricity by incentivising customers to avoid consumption at peak times. With CRTs and the use of AMR, consumers will be able to monitor their consumption regularly and choose to manage it more efficiently. As a result, customers may eventually contribute to reducing peak consumption.

How satisfied are you with the pace of privatisation in the power sector and the growth of supply competition in the market?

AL WAHAIBI: In view of the present global situation, the listing and private placement of shares of the Muscat Electricity Distribution Company (MEDC) have been suspended. We are contemplating the MEDC’s privatisation through alternative modes of strategic partnership. Nama Group will facilitate the privatisation of MEDC and of other eligible subsidiary companies in the electricity sector in a timely manner. A consortium of advisors will be appointed to advise Nama Group on this privatisation initiative.

Supply competition is being guided by the AER, which believes that the Omani market is ready for it. The AER will initiate the consultation and preparatory work required by the Sector Law prior to submitting proposals to government, and it intends to publish its position on the readiness of the market with regard to the introduction of supply competition .