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

• Published in: Energy (Oxford) Vol. 31; no. 12; pp. 1703 - 1714
• Main Authors: Malik, Arif S., Al-Zubeidi, Salem
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 01-09-2006; Elsevier Science
• Subjects: Applied sciences; Economic data; Electric energy; Electricity tariffs; Energy; Energy economics; Exact sciences and technology; General, economic and professional studies; Long-run marginal cost; Methodology. Modelling; Power planning; Asia; Oman; Long-run marginal cost; Electricity tariffs; Power planning; Electricity; Cost analysis; Marginal cost; Long term; Tariff
• ISSN: 0360-5442
• DOI: 10.1016/j.energy.2005.11.010

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, 33
kV, 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$ 75
per 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 415
V is 6.52
¢/kWh or 25.17
Bz/kWh.