How does MEDC work with power generation companies to prepare for increased electricity demand?
Different parts of the industry play different roles in terms of accommodating growth and demand. In our context, we have a three-year business planning cycle based on new customers and demand information. We analyze demand trends both segmentally and holistically before determining our investment plans, which are also reflected in the annual three-year execution plans. Thus far, we are continuing our capital investment program, which in 2017 was close to USD127 million and aimed at accommodating growth in our customer base and demands to enhance the reliability of our supply.
What strategies are in place to manage peak demand?
MEDC will continue investing in the distribution systems in order to better manage peak demand. In addition to prudent investments, peak demand will be managed from a regulatory standpoint through a reform in the tariff structure whose new cost-reflective tariffs provide an incentive to consume electricity during non-peak hours by increasing the electricity tariff during peak demand times. There are also new mandates in terms of the efficiency of air conditioners entering the country and certain labeling requirements that mandate only highly efficient devices. These reforms started in 2017 and will gain momentum going forward. It will not only help manage the network, but also the seasonal impact.
What other challenges do Muscat and Oman pose for electricity distribution, and what strategies do you have to overcome them?
A challenge that we are constantly working to address is properly catering to customer expectations, especially since those regarding payment services and how they interact with service providers like MEDC are always changing. We are working on being more dynamic in order to better meet customers' needs. For example, we have launched electronic systems for various customer services, ranging from payment, call handling, and outage management systems, and MEDC has plans to increase the utilization of these services within current and upcoming years. From an operational standpoint, reaching peak optimization of the existing infrastructure is an ongoing challenge, though we have invested extensive resources in automated systems and better human resources to improve management. Another challenge is Oman's geography and climate. On the Indian Ocean side of the Arabian peninsula, cyclones have posed a continuous threat. We have experienced three cyclones since 2007, and each impacted our infrastructure in different areas. In terms of capability, organizationally, and structurally, we have already moved in terms of contingency plans to ensure greater resilience and move forward in the restoration processes. The results of this planning were evident during the Mekunu cyclone, when the entire country mobilized and every sector helped in a short period of time. Cybersecurity risks to infrastructure have emerged more recently and also become a great threat for our industry. We are working to strengthen our management framework and technical controls following a number of vulnerability assessments.
What technologies can make the distribution system more effective?
We are working to implement the smart grid as we speak. This involves many different technologies, including the Internet of Things, artificial intelligence, and blockchain. These technologies use new solutions on the existing infrastructure to make the grid more efficient. In the last few years, MEDC has invested in smart metering as one of the first building blocks to improve the system. This is mandatory for customers using cost-reflective tariffs, which are commercial or government consumers. We started with high-value customers and are now in the process of taking it even further to the second segment of customers, those who can potentially move to the cost-reflective tariff. The realm of smart metering is evolving, and we will learn as we roll out how to get the best of this information to the benefit of customers and MEDC.