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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.
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    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. 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.
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    9. 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).
    10. 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.
    11. 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.
    12. 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.
    13. 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.
    14. 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.
    15. 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.
    16. 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.

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