Oman Power Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

Oman Power Market Trends and Insights

Accelerating Utility-Scale Solar PV Build-Out

Oman commissioned the 1 GW Manah I and II plants in January 2025, more than doubling installed renewable capacity and proving investor appetite for large projects at tariffs near USD 0.023 kWh. A Masdar-led consortium closed a PPA for the 500 MW Ibri III solar-plus-storage project in May 2024, setting the country’s first utility-scale hybrid precedent. Nama PWP issued the 280 MW Al Kamil RfP in December 2024, confirming a visible pipeline through 2027. Compliance with IEC 61215 and IEC 61730 boosts lender confidence, and falling module prices widen project margins. Together, these factors position solar to deliver more than 30% of incremental generation by decade-end.

North–South 400 kV Interconnection Unlocking Renewables Corridors

Phase 1 of the 670 km North-South backbone entered service in 2024, stitching the MIS and Dhofar grids into a single synchronous area. Phase 2, a further 502 km, will reach Dhofar by 2027 and enable surplus midday solar from inland governorates to satisfy southern evening peaks. OETC is spending USD 2.2 billion on 41 transmission projects, including the USD 186 million Masirah Island link that replaces diesel generation.^{[1]Oman Electricity Transmission Company, “Annual Report 2024,” oetc.om} The corridor lays the electrical groundwork for a future Oman-UAE 400 kV tie, improving reserve sharing and boosting export prospects.

Green-Hydrogen Anchored Mega-Projects Driving New Electricity Demand

Hydrogen Oman allocated land in 2024 for schemes targeting 1.38 Mt yr of green hydrogen, with BP’s Hyport Duqm alone requiring 1.3 GW of renewable capacity in its first phase. POSCO and ENGIE plan a 5 GW wind-and-solar complex to feed ammonia export volumes, while EDF-J-POWER-Yamna pursues a 178 kt yr project. These ventures could triple industrial electricity demand and spur 8-10 GW of new capacity by 2030, supporting the Oman power market through long-term offtake contracts.

Rapid Data-Center & Bitcoin-Mining Load Additions

Oman Data Park intends to double its capacity from 10 MW to 20 MW within 5-10 years to serve AI workloads. Datamount’s Tier III Al Bandar facility and Omantel’s Salalah hub collectively draw 50-60 MW today and may exceed 100 MW by 2027. Cheap industrial tariffs averaged USD 0.04 kWh in 2024, attracting Bitcoin-mining inquiries, although APSR’s subsidy reforms could tighten margins.^{[2]Authority for Public Services Regulation, “Decision 2024/43,” apsr.gov.om} These digital loads diversify offtake profiles and flatten system load curves.

Limited Private-Equity Exits Due to Single-Buyer Model

Nama PWP’s single-buyer structure locks most capacity into 20-25-year PPAs, leaving less than 5% of generation to spot trading in 2024 and constraining secondary-market liquidity.^{[3]Oman Electricity Market Operator, “Market Rules v4.1,” oemo.om} ACWA Power renewed its Barka 1 IWPP rather than divest because investor demand was thin.^{[4]ACWA Power, “Barka 1 IWPP PPA Extension Press Release,” acwapower.com} Funds chasing 5-7-year horizons find the Oman power market mismatched, lowering fresh equity inflows and slowing project recycle.

Prolonged Electricity-Tariff Subsidies Delaying Cost-Reflective Pricing

Electricity subsidies totaled OMR 400 million in 2024 despite APSR Decision 2024/43, which only lifted tariffs for non-residential users above 100 MWh per year. Residential customers still pay roughly USD 0.04 kWh against a supply cost of USD 0.07 kWh. Such under-recovery lengthens paybacks for rooftop solar and distorts investment signals, curbing distributed generation momentum.

Segment Analysis

By Power Source: Renewables Gain Speed but Gas Dominates

Thermal assets, fueled largely by regulated-price natural gas, delivered 93.8% of generation in 2024, equating to the largest Oman power market share among power sources. Gas-fired plants will retain grid-stability duty through at least 2029 as the 2.4 GW Misfah-Duqm CCGT portfolio reaches COD. Even so, renewables are adding capacity faster than any other segment. Utility-scale solar alone contributed 1.855 TWh in 2024 and will exceed 6 TWh once Manah operates for a full year. Wind’s 1 GW pipeline is slated for 2027, and green-hydrogen projects could catalyze 8-10 GW of captive renewables by 2030. The Oman power market size attributable to renewables is expected to expand at a 32.6% CAGR, lifting its slice toward 20% of total output by decade-end.

Nuclear, hydro, geothermal, biomass, and tidal remain negligible because Oman lacks suitable water bodies and high-grade geothermal reservoirs. Small diesel sets persist only on islands and remote oilfields, awaiting grid extensions such as the Masirah subsea cable. As LCOEs for solar plus storage keep falling, investors weigh hybrid bids with 4-hour batteries to monetize reserve and black-start services under OEMO’s ancillary-market rules.

Note: Segment shares of all individual segments available upon report purchase

By End User: Industrial Demand Accelerates

Utilities held 55.1% of delivered electricity in 2024, reflecting the single-buyer dispatch model run by OEMO. Yet commercial and industrial offtake is the growth engine, advancing at 13.8% CAGR through 2030 as green-hydrogen electrolyzers, metals decarbonization pilots, and hyperscale data centers ramp. Oman Data Park, Datamount, and Omantel may together exceed 100 MW by 2027, while Hyport Duqm will draw 1.3 GW of renewable capacity for hydrogen in its first phase. Sahim’s sluggish rooftop-solar roll-out keeps residential growth modest, but smart meters nudge behavior and cut waste. The Oman power market size within industrial parks is therefore set to double, tightening reserve margins and reinforcing the need for flexible peaking assets.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Peak demand on the Main Interconnected System reached 6,628 MW in 2024 and is forecast to hit 8,350 MW by 2029, reflecting Muscat's commercial expansion and inland solar farms coming online. Dhofar's separate grid recorded 612 MW of peak load and should grow 5% year to 837 MW by 2029 on tourism and logistics investments around Salalah. Phase 1 of the North-South interconnection unites the two systems, letting excess northern solar cover southern evening peaks, while Phase 2's 502 km stretch, due in 2027, completes the backbone.

Interior governorates such as Ad Dakhiliyah and Al Wusta host the Manah and Ibri clusters, cementing their role as renewable export hubs. Duqm Special Economic Zone, halfway down the coast, blends an 800 MW CCGT plant with BP's Hyport Duqm renewables, forming Oman's first dual-fuel industrial power cluster. Coastal belts at Jaalan Bani Bu Ali, Mahoot, and Ras Madrakah offer class-III wind regimes and are booked for the 1 GW IPP shortlist.

Cross-border trade is advancing: a 528 km 400 kV Oman-UAE direct link scheduled for 2026 will permit off-peak solar exports and baseload imports during peak windows. Meanwhile, OETC broke ground on the USD 186 million Masirah Island project in February 2025, replacing diesel sets and trimming 80,000 t CO₂ each year. Together, these geographic shifts diversify load centers and elevate the resilience of the Oman power market.