Oman
With a cumulative score of 1.75, Oman ranks number 21 among emerging markets and number 48 in the global ranking.
- Emerging markets
- Middle East & Africa
2.09 / 5
Power score
0.93 / 5
Transport score
Buildings score
Only 56 markets (28 emerging markets) are scored on the Buildings sector. See the full list on the methodology page.
Low-carbon strategy
Net-zero goal and strategy
Oman does not have a net zero goal or strategy as of September 2021 due to its high dependence on oil and LNG.
The country is reportedly considering taking on a zero emissions target by 2050, but no formal legislation or plan has been made yet.
Nationally Determined Contributions (NDC)
Oman aims to slow greenhouse gas emissions growth and reduce them by 7% in 2030, compared to the business-as-usual scenario where emissions are predicted at about 125 MtCO2e. The country intends to reduce 4% of these emissions based on national efforts, and eliminate the balance 3% via grants and financing in addition to capacity building, institutional strengthening and access to appropriate technologies.
Fossil fuel phase-out policy
The country has no policy to phase out fossil fuels due to its high dependence on oil and LNG, but has a plan to taper down imports of LNG from Qatar.
Power
Power policy
Oman has two different plans to transition to cleaner and more sustainable energy. The first one is a target of 16% electricity generation by 2025 and 30% by 2030. The second one is from the strategic document “Oman 2040 Vision”, which targets 20% renewable energy consumption by 2030 and 35-39% by 2040. Over 3,200MW of projects have been auctioned as of October 2022, including solar, wind and battery storage. In addition, financial incentives such as the government-led subsidy for rooftop solar for residential customers and support for foreign investment can spur renewable energy uptake in the country.
Power policies
Power prices and costs
Similar to other countries in the region, Oman’s electricity prices are highly subsidized for residents. Prices paid by consumers were static from the early 1990s until 2017 and only covered about 54% of production costs. In 2017, the country introduced a cost-reflective tariff that removed subsidies for customers whose yearly use exceeds 150MWh (effectively commercial customers). After two steady years, the electricity price increased in 2021.
Oman has completely removed power and water subsidies for the biggest consumers including non-residential consumers such as industrial, tourism, commercial and government entities in January 2021. Starting from April 2021, Oman also introduced value-added tax (VAT) on power, which added 5% to the previous power price for Oman citizens except from those who own two accounts or less of residential category. In January 2022, the Oman Power and Water Procurement Company (OPWP) launched the region’s first spot market for the wholesale trading of electricity, allowing captive generators with excess capacity to be able to capacity through the spot market. This made investments in projects with significant renewable electricity generation facilities (such as the recently announced green hydrogen projects) more attractive.
Power market
In Oman’s power market, generation is open to private participation, but the companies are mostly state-run. A small amount of generation and some distribution is handled by private companies in rural regions. Oman has recently passed laws to expand privatization of these sectors. Generation companies include Wadi Jizzi Power and Al Ghubra Power.
Oman's power transmission is monopolized by Oman Electricity Transmission Company (OETC). In 2019, Oman sold 49% of OETC's stake worth $1 billion to Chinese transmission and distribution operator, State Grid Corporation of China (SGCC). The transparency on the grid extension plan may be improved with the introduction of other stakeholders. The power distribution companies are state-owned and retain a monopoly over all distribution.
Specific regulations apply to small-scale distributed solar projects in Oman, built under SAHIM 1 and SAHIM 2. Authority for Public Services Regulation (APSR) launched SAHIM in 2017. SAHIM 1, the first phase of SAHIM, provided for large households and businesses to install small-scale grid-connected PV solar systems at their own cost.
Installed Capacity (in MW)
Electricity Generation (in GWh)
Utility privatisation
Which segments of the power sector are open to private participation?
Wholesale power market
Does the country have a wholesale power market?
Doing business and barriers
Oman has a relatively stable and open business environment. In terms of the power sector, it has allowed 100% foreign ownership of companies and properties, and has begun privatizing its electricity companies. However, OPWP typically includes minimum In-Country Value (“ICV”)/local content requirements in its PPAs. A comprehensive renewable energy regulatory framework could help better integrate renewables. The main historical challenges include high costs of renewable energy compared with the relatively low cost of gas-fueled facilities and low competition among developers.
Currency of PPAs
Are PPAs (eg. corporate PPAs and all other types) signed in or indexed to U.S. Dollars or Euro?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Fossil fuel price distortions - Subsidies
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?
Fossil fuel price distortions - Taxes
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes or carbon prices?
Transport
EV market
The passenger EV market has yet to materialize in Oman, but it has mandates for EV charging infrastructure.
EV policy
The country has yet to implement regulations on EV development and deployment, but it has mandated EV charging points at all new fuel stations from December 2019 onwards.
Transport policies
Fuel economy standards
Does the country have a fuel economy standard in place?
Buildings
Buildings market
The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.
Energy efficiency policy
Does the country have a national energy efficiency plan?
Energy efficiency policy
Are there minimum energy performance standards for buildings?
Energy efficiency incentives
Is there access to loans or grants for energy efficiency measures (i.e. Wall or loft insulation or double glazing)?
Buildings policy
There are no specific laws.
Buildings policies
Additional insights
from BNEF
Explore more detailed information on global commodity markets and the disruptive technologies driving the transition to a low-carbon economy.
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