Oman Power Demand Set to Grow 7.2% Annually Through 2031: What This Means for Energy Investments and Business Opportunities
MUSCAT, FEB 23 — The Sultanate of Oman is poised for significant electricity demand growth between 2025 and 2031, driven by sustained economic expansion and the development of large-scale industrial and commercial projects, according to the state electricity procurer, Nama Power and Water Procurement Company.
Within the Main Interconnected System (MIS), which covers northern and central Oman excluding the Musandam Governorate, peak electricity demand is expected to grow at an average annual rate of 7.2%. Demand is projected to rise from 7,503 MW in 2024 to 12,198 MW by 2031. Meanwhile, the Dhofar Power System (DPS) is forecasted to experience even faster growth at 9.1% annually, with peak demand increasing from 801 MW in 2024 to 1,469 MW by 2031.
Nama Power and Water Procurement Company attributes this sharp demand increase to robust GDP growth, extensive infrastructure projects, and the planned integration of large-scale initiatives across priority sectors aligned with Oman’s national economic diversification agenda.
To meet this rising demand, Oman’s power infrastructure will see substantial expansion through 2031, focusing on a balanced energy mix. The procurement strategy prioritizes utility-scale renewable energy, energy storage, and high-efficiency thermal generation in line with Oman Vision 2040, aiming to ensure capacity adequacy, fuel efficiency, and energy security in the long term.
Aligned with the nation’s energy transition and net-zero commitments, new clean energy projects are set to support the target of generating 30% of electricity from renewable sources by 2030. Current project pipelines indicate this target is achievable, if not surpassable, as solar and wind energy projects accelerate.
By 2030, renewable energy is expected to constitute 30% of electricity generation, with wind contributing 6.75% and solar photovoltaic (PV) 16.16%. Gas-fired plants will account for 53.46%. By 2031, solar’s share is projected to rise to 23.26%, pushing total renewable generation to 39%, while gas-fired generation will decrease to 48.52%.
Installed renewable capacity is forecasted to reach 9,087 MW by 2030 and 12,182 MW by 2031, reflecting rapid deployment across solar, wind, and waste-to-energy (WTE) projects. Key projects in the pipeline include Ibri III Solar (500 MW), JBB Wind (105 MW), Duqm II Wind (300 MW), Mahout Wind (800 MW), Al Kamil Solar (400 MW), Marsa Solar (280 MW), Dhofar II Wind (132 MW), Sadah Wind (120 MW), Sinaw Solar (400 MW), a 1,000 MW Solar Independent Power Project (IPP) planned for 2029, Shaleem Wind (100 MW), Al Jazir Wind (100 MW), and Duqm III Wind (300 MW).
Additional capacity growth is expected in 2030–2031 through six large Solar PV IPPs, each with a capacity of 1,000 MW, alongside the 95 MW Barka Waste-to-Energy project, diversifying the renewable energy portfolio beyond solar and wind. These investments are critical to the sharp increase in installed renewable capacity.
A crucial enabler of the energy transition is the 400 kV North–South Interconnect, which links northern and central Oman, including Al Duqm and Al Wusta Governorate. By the fourth quarter of 2026, this interconnection is expected to extend to the Dhofar Power System, forming a unified national grid that will facilitate power sharing and enhance system resilience.
Special Analysis by Omanet | Navigate Oman’s Market
Oman’s electricity demand is set to surge with a 7.2%-9.1% annual growth driven by economic diversification and industrial expansion, presenting significant opportunities for renewable energy investments and infrastructure development. Smart investors and entrepreneurs should focus on utility-scale solar, wind, and innovative energy storage projects, aligning with Oman Vision 2040’s push towards a clean energy future sourcing nearly 40% renewables by 2031, while also monitoring the evolving national grid integration for enhanced energy security and scalability. This transition marks a strategic pivot toward sustainable growth, balancing risk in fossil fuel dependency with expanding green energy portfolios.
