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Electricity tariffs based on long-run marginal costs for central grid system of Oman

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  • Malik, Arif S.
  • Al-Zubeidi, Salem

Abstract

The electricity tariffs in Oman are subsidized and are based on a cost accounting approach and do not reflect the true cost incurred in generating, transmitting and distributing a kilowatt-hour of electricity at the consumer end. This paper presents the electricity tariff based on the estimation of long-run marginal cost at generation, 33kV, and 415 voltage level for Ministry of Housing, Electricity & Water (MHEW) interconnected power system of Oman. The result shows that at the generation level a marginal kW costs US$ 75per year and a marginal kWh costs 2.07¢/kWh. These costs increase as we move downstream from generation to consumer end. The average cost of electricity at the consumer end connected at 415V is 6.52¢/kWh or 25.17Bz/kWh.

Suggested Citation

  • Malik, Arif S. & Al-Zubeidi, Salem, 2006. "Electricity tariffs based on long-run marginal costs for central grid system of Oman," Energy, Elsevier, vol. 31(12), pages 1703-1714.
    • Handle: RePEc:eee:energy:v:31:y:2006:i:12:p:1703-1714
    DOI: 10.1016/j.energy.2005.11.010
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    References listed on IDEAS

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    1. Porat, Yigal & Irith, Rotlevi & Turvey, Ralph, 1997. "Long-run marginal electricity generation costs in Israel," Energy Policy, Elsevier, vol. 25(4), pages 401-411, March.
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    2. Nakawiro, Thanawat & Bhattacharyya, Subhes C. & Limmeechokchai, Bundit, 2008. "Electricity capacity expansion in Thailand: An analysis of gas dependence and fuel import reliance," Energy, Elsevier, vol. 33(5), pages 712-723.
    3. Kwag, Kyuhyeong & Shin, Hansol & Oh, Hyobin & Yun, Sangmin & Kim, Tae Hyun & Hwang, Pyeong-Ik & Kim, Wook, 2023. "Bilevel programming approach for the quantitative analysis of renewable portfolio standards considering the electricity market," Energy, Elsevier, vol. 263(PD).
    4. Zekri, Slim, 2008. "Using economic incentives and regulations to reduce seawater intrusion in the Batinah coastal area of Oman," Agricultural Water Management, Elsevier, vol. 95(3), pages 243-252, March.
    5. Peeter Pikk & Marko Viiding, 2013. "The dangers of marginal cost based electricity pricing," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 13(1), pages 49-62, July.
    6. Wang, Chen & Zhou, Kaile & Yang, Shanlin, 2017. "A review of residential tiered electricity pricing in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 533-543.
    7. Huang, Shih-Chieh & Lo, Shang-Lien & Lin, Yen-Ching, 2013. "Application of a fuzzy cognitive map based on a structural equation model for the identification of limitations to the development of wind power," Energy Policy, Elsevier, vol. 63(C), pages 851-861.
    8. Emodi, Nnaemeka Vincent & Chaiechi, Taha & Alam Beg, A.B.M. Rabiul, 2019. "Are emission reduction policies effective under climate change conditions? A backcasting and exploratory scenario approach using the LEAP-OSeMOSYS Model," Applied Energy, Elsevier, vol. 236(C), pages 1183-1217.
    9. Zohreh Salimian & Marjan Kordbacheh & Mehdi Sadeghi Shahdani & Vahab Mokarizadeh, 2012. "Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short-Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model," International Journal of Energy Economics and Policy, Econjournals, vol. 2(4), pages 250-262.
    10. Al-Badi, A.H. & Malik, A. & Gastli, A., 2009. "Assessment of renewable energy resources potential in Oman and identification of barrier to their significant utilization," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(9), pages 2734-2739, December.
    11. Kalampalikas, Nikolaos G. & Pilavachi, Petros A., 2010. "A model for the development of a power production system in Greece, Part I: Where RES do not meet EU targets," Energy Policy, Elsevier, vol. 38(11), pages 6499-6513, November.
    12. Nakawiro, Thanawat & Bhattacharyya, Subhes C. & Limmeechokchai, Bundit, 2008. "Expanding electricity capacity in Thailand to meet the twin challenges of supply security and environmental protection," Energy Policy, Elsevier, vol. 36(6), pages 2265-2278, June.
    13. Al-Badi, A. & Malik, A. & Al-Areimi, K. & Al-Mamari, A., 2009. "Power sector of Oman--Today and tomorrow," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(8), pages 2192-2196, October.
    14. Nikolaidis, Alexandros I. & Charalambous, Charalambos A., 2017. "Hidden financial implications of the net energy metering practice in an isolated power system: Critical review and policy insights," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 706-717.
    15. Amann, Juergen & Cantore, Nicola & Calí, Massimiliano & Todorov, Valentin & Cheng, Charles Fang Chin, 2021. "Switching it up: The effect of energy price reforms in Oman," World Development, Elsevier, vol. 142(C).
    16. Al-Badi, A.H. & Malik, A. & Gastli, A., 2011. "Sustainable energy usage in Oman—Opportunities and barriers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(8), pages 3780-3788.

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