SD38.96 MILLION INVESTED IN 2017

Oman 2019 | GREEN ECONOMY | VIP INTERVIEW

TBY talks to Abdullah Bin Said Al Badri, CEO of Muscat Electricity Distribution Company (MEDC), on power generation, peak demand, and goals for the coming year.

How does MEDC work with power generation companies to prepare for increased electricity demand?

There are different parts of the industry that play different roles in terms of accommodating growth and demand. In our context, we have a three-year business planning cycle based on the information received from distribution companies, and we analyze the trends in demands, segmentally and holistically. That drives our investment plans, also reflected in annual three-year execution plans. Thus far, within the context of MEDC, we are continuing our capital investment program, which in 2017 was close to USD38.96 million that we invested to accommodate the growth in customer base and demands to enhance the reliability of supply of our system.

What strategies are in place to manage peak demand?

Continuing only to invest in the capacity of generation, transmission, and distribution systems is not a sustainable model, and policymakers and the industry have realized this. There was a reform in the tariff structure that will have a direct impact on the behavior of major customers. The new cost-reflective tariffs provide an incentive to consume electricity during non-peak hours. There are also new mandates in terms of the efficiency of the air conditioners that come into the country, and certain labeling requirements that mandate only high 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?

Optimization of the existing infrastructure is the focus right now within our context. The other challenge is Oman's geography. On the Indian Ocean side of the Arabian Peninsula, we see a trend of cyclones that continues to increase; we have experienced three cyclones since 2017, and each impacted our infrastructure in different regions. 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 also become important for the industry. We need to strengthen our systems to prevent cyberattacks.There are major reviews every three to four years, and we raise the bar every time in terms of customer service and security of supply.

What technologies can make the distribution system more effective?

In the last few years, MEDC has invested in systems such as a smart metering as one of the primary building blocks to improve the system. Smart metering 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 us. We have an integrated system that looks at the demand side and sees what is required on the supply side. We have also invested in geographic information systems and supervisory control and data acquisition (SCADA) and now have better control over our assets. There is automated reading infrastructure and all the components of the smart grid, and we can learn from the big data that we have available for the first time. We want to get the best out of those systems and build information to help us make better use of information to improve customer relations and manage our infrastructure.

What are MEDC's objectives over the next 12 months?

MEDC is here to serve customers, so they are our biggest priority in our objectives in terms of reliability of supply, connectivity for new customers, and making it easy for customers to pay their bills or contact us through electronic means. We also need to maximize the benefits to our shareholders; we have capital investments in the range of USD103.9 million to cater for growth in highly developing areas around Muscat. We have partnerships with our contractors to make sure we are effective. We will also continue our investments in upstream, in substations to ensure reliability and security standards compliance as per our license. The health and safety program to improve this culture within the organization is also of highest importance to MEDC.