POWER PLAY

Oman 2020 | SUSTAINABILITY | INTERVIEW

With new technologies and opportunities in renewable energy on the horizon, Nama Group has put in place initiatives to further promote decentralization and electrification.

Omar Al Wahaibi

What stage is Oman currently at in terms of the power industry's privatization, and what will be the main implications of these efforts?
As mandated by the government, Nama Holding has launched a partial privatization program, divided into five milestones, for Nama Group's electricity transmission, distribution, and supply companies by way of equity divestment to international strategic partners. We announced the sale of up to 49% of its shares in Oman Electricity Transmission Company (OETC) and the sale of up to 70% of its shares in its distribution and supply companies respectively: Muscat Electricity Distribution Company (MEDC), Majan Electricity Company, Mazoon Electricity Company, and Dhofar Power Company. For OETC and MEDC, this was done in October 2018. In December 2018, 23 companies expressed their interest in participating in OETC and MEDC privatizations, either individually or in consortia. As such, we appointed a consortium of advisors, led by Lazard Freres and London Economics, assisted by five other expert consulting firms, for this privatization program.

What does the increase in smart meter penetration mean for Oman's broader power sector, and what will be the major impact on the commercial, industrial, and government accounts?
Nama Group launched an automatic meter reading system (via the telecommunication network) for high-value and cost-reflective tariff (CRT) customers to record their readings on an hourly basis. This technology improved reading quality and tracking consumption per hour, helping costumers understand their consumption patterns, and enabled the implementation of the CRT. The project has been implemented successfully to completion and enables the reading of 50% of electricity consumption in the country via automatic means and on an hourly basis. The number of customers in this category represent only 1% customer penetration.

How do you project the progress in energy storage solutions and the efficiency of solar panels to impact the power sector in Oman, and what opportunities are there for the private sector to engage with?
The level of solar power density in Oman is considered among the highest in the world and can potentially meet the ever-growing demand for electricity in the country. Despite the abundance of solar energy, the storage mechanism is still not affordable. Nevertheless, if the storage technology evolved quickly on both the technical and economic fronts, and prices begin to fall, this will result in a radical shift in the overall power generation sector reducing dependency on conventional power plants. For this reason, a number of SMEs have shown great interest in the solar energy, as there are currently 15 qualified companies whose main business activity is rooftop solar panel installation. Tanweer's 11-site hybrid project includes storage system as a main component in the design, which was floated at the end of 2019, and we expect to reduce the electricity generation cost.

How do you expect IoT and the advent of Industry 4.0 to innovate the utilities market in Oman and the region, and what will be the major regulatory challenges with the technological disruption?
Studies show that new emerging technologies will significantly affect the current electricity market environment, structure, and requirements. These trends are most notably electrification, decentralization, and digitalization. As for electrification, emerging technology themes such as power-to-mobility have a substantial power requirement and might require capacity upgrades. With regard to decentralization, the increasing feasibility of decentralized energy solution will be prompted by the falling costs of energy storage systems and renewable energy system, coupled with flexible demand management models that reduce peak loads. Finally, digital networks including digital grids, smart meters, smart cities, sensors, and control systems will have a broader impact on the technological revolution.

What are Nama Group's strategic priorities for 2020 with regards to water and wastewater restructuring?
We continue to work closely with the Public Authority for Water to restructure the water sector, spearheading the execution of the 20-month long detailed design and implementation phase, which was initiated in April 2018 and is moving forward as planned.