Oman is pursuing an ambitious energy transition to achieve net-zero emissions by 2050, while ensuring energy security, competitiveness and growth in the low-carbon economy. Diversification of energy resources and increasing the contribution of renewable energy generation to the grid are considered pillars of Oman’s Vision 2040 and the target of decarbonisation by 2050. By 2030, it aims to source 30 per cent of its electricity generation from renewables, primarily solar and wind. Besides diversifying its economy away from hydrocarbons, it aims to become a global exporter of green hydrogen. To reach these targets, Oman plans significant investments in renewable energy projects, grid modernisation, energy-efficiency initiatives, carbon-capture technologies and other sustainable measures, reshaping its economic and environmental landscape by mid-century.
In the medium term, the country is projected to post high economic growth rates of around 3 per cent in 2025 and about 4 per cent between 2026-30, compared to less than 2 per cent in 2023 and 2024, driven by the diversification initiatives and reforms under Vision 2040. This, in turn, will drive up electricity demand. Over the next five years, Oman’s electricity peak demand in the Main Interconnected System (MIS) (which covers the majority of Oman) is expected to grow at an annual CAGR of 4.48 per cent to reach 11,162 MW by 2029. To meet this growing demand as well as its transition targets, the country plans to add a total of 7,874 MW of new generation capacity between 2025 and 2029, with renewable energy accounting for approximately 68 per cent of this expansion.
To support this growth, Oman Electricity Transmission Company (OETC), which is jointly owned by the Oman government (51 per cent stake) and State Grid International Development Limited (49 per cent stake), a subsidiary of China’s state-owned State Grid Corporation of China, in its latest Five-Year Annual Transmission Capability Statement (2025-29), has planned 51 major transmission projects to increase system capacity, connect new renewable and conventional generation projects, expand supply to rural areas, and improve grid reliability. OETC’s strategic plan focuses on developing the 400 kV network as the national backbone to enable efficient power evacuation from centralised plants and future renewable energy projects, as well as initiatives to maintain high levels of grid reliability as the share of renewable energy increases in the energy mix.
To build a robust interconnected national grid, OETC has been developing its flagship North–South Interconnection (RABT) project, which aims to link the northern MIS with the Dhofar system in the south. The first phase of the project connecting MIS to Duqm was completed in 2023. Phase II of the project, which will further extend the grid till Dhofar, is expected to be completed by the end of 2026. It will add hundreds of km of 400 kV overhead lines (OHLs) and new grid stations, forming the Oman national grid and dramatically improving grid flexibility. This enhanced connectivity will be crucial, as will enable large-scale renewable energy generated in resource-rich but remote regions such as Al Wusta and Dhofar to be reliably dispatched to the rest of the country.
In addition to developing the national grid, major projects to connect rural areas such as Masirah, Khuwaimah, Al Mazyunah, Al Jazir, Uwayfiyah, Shaleem and Shuwaymiyyah to the transmission network will be completed during this period. These vital interconnections will improve energy efficiency by replacing existing diesel-based generation with more reliable and cost-effective power sources.
To enhance grid reliability and performance, OETC plans to deploy reactors and compensators at strategic locations to mitigate short-circuit issues. Further, it is working towards introducing ancillary services, to provide key grid support functions such as frequency control, voltage control, system stability and black-start capability. The government-established Ancillary Services Working Group conducted several studies and recommended the Ancillary Services Strategy and Roadmap covering the short, medium and long term.
In addition to enhancing domestic grid resilience, Oman is strengthening its links within the Gulf Cooperation Council (GCC) regional network. A new 528-km, 400 kV interconnector will connect OETC’s Ibri IPP substation with a GCC Interconnection Authority (GCCIA) substation in Abu Dhabi, United Arab Emirates (UAE) by 2026, boosting regional energy trade and reliability, and opening up more opportunities for renewable energy trading.
In the long-term, Oman’s transition will significantly impact the power grid, requiring additional investments and comprehensive planning. OETC has already started tapping alternative sustainable financing sources. In a landmark move, in October 2025, OETC issued its first OMR288.5 million five-year Green Sukuk (Islamic green bond), making it the country’s first company to issue green bonds. The issue was oversubscribed by 2.8 times, indicating investor confidence in OETC’s strategy to build a sustainable grid, integrating renewables and improving transmission efficiency.
To enhance planning, OETC is currently updating the electricity transmission master plan for 2025-40 to ensure a resilient, reliable and efficient grid that can adapt to future energy needs. The updated plan will cover load forecasting, renewable and green hydrogen integration, transmission expansion, ancillary services, economic and environmental assessments, and potential cross-border interconnections.
Existing power infrastructure
Oman’s installed electricity generation capacity has reached 11,813 MW as of March 2025, increasing modestly from 11,092 MW in March 2021, mainly due to the planned retirement of old oil and gas-based units in line with its low-carbon strategy. While thermal power has remained the dominant source, contributing 10,204 MW or 86.4 per cent of total capacity, renewable capacity has recorded a remarkable growth from just 50 MW in 2021 to over 1,600 GW by 2025. The acceleration began with the 560 MW Ibri Solar IPP, MIS’s first major renewable project, commissioned in 2021 and connected via the 220 kV network. Then, the inauguration of the 1,000 MW Manah Solar I and II plants, the country’s largest solar complex, in January 2025 further boosted renewable capacity and marked a major step in Oman’s clean energy push.
Oman’s transmission network comprises three main systems – the Main Interconnected Transmission System (MITS), the Dhofar Transmission System (DTS) and the Musandam Transmission System (MTS). The Dhofar system was transferred to OETC in January 2014 while the transmission assets of Rural Areas Electricity Company (Tanweer) in Musandam and Haima were transferred to OETC in September 2022. By 2024, the total transmission network reached 10,013 circuit (ckt) km, up from 7,776 ckt km in 2020, representing an approximate 6.52 CAGR. This expansion was driven largely by expansion at the 400 kV level, with total line length more than doubling over the period, from 1,320 ckt km to 2,919 ckt km. This was largely driven by the RABT Phase 1 project comprising 660 km of 400 kV overhead lines (OHLs) and five main grid stations in Nuhaida, Barik, Suwayhat, Duqm and Mahut. Overall, the 132 kV level remained the dominant voltage, accounting for 5,191 ckt km or 51.8 per cent of the total network in 2024. The 220 kV network, which serves as a key intermediate transmission backbone, showed modest fluctuations but ultimately increased to 1,903 ckt km in 2024, reflecting targeted upgrades and system optimisation efforts.
During the 2020-24 period, the number of substations increased from 95 to 116, reflecting ongoing reinforcement of grid nodes to support new generation projects and load growth across both urban and industrial centres.
OETC’s MITS is interconnected with the GCC regional grid through the UAE (Transco Abu Dhabi) at Mahadha (Al Wasit) grid station via a 220 kV system. The regional grid links the electricity systems of the six GCC countries – Oman, UAE, Qatar, Bahrain, Saudi Arabia and Kuwait.
Future plans
Generation
Oman’s electricity demand is projected to rise steadily in the medium term, driven by ongoing economic activity, expansion of industrial loads and new infrastructure developments.
To meet this demand, OETC’s latest Five-Year Annual Transmission Capability Statement (2025-29) projects an addition of 7,874 MW of new capacity up to 2029, with contracted or under tendering solar (2 GW) and wind (1.46 GW) contributing 44 per cent. Conventional generation addition remains part of the near-term strategy, with plans to add 2.4 GW of combined cycle gas turbine (CCGT) power plants, primarily to provide firm capacity that can balance increasing shares of variable renewables. An 80 MW capacity from diesel engines is also expected to be added to support peaking and backup needs in select areas. Another 1,934 MW of future capacity (mostly renewable energy) is proposed to be added in 2028 (434 MW) and 2029 (1,500 MW), but the details of this are not available, as it is yet to be tendered. Accounting for this would take the share of renewables in the planned capacity addition to over two-thirds.
The state-owned Nama Power and Water Procurement (PWP), the country’s single buyer of power and water for all IPPs and independent water and power plants, is actively undertaking the tendering process for several power projects, including the planned CCGT projects (2.4 GW Misfah and Duqm), the Barka waste-to-energy project (up to 100 MW) and Al Kamil solar IPP (280 MW) in addition to about 1 GW of wind IPPs at Duqm, Sadah, Mahout and Jaalan Bani Bu Ali. It recently signed two power contracts for the 500 MW Ibri-III solar IPP (which includes 100 MWh of battery storage) and 125 MW Dhofar-II wind IPP.
Transmission
During the period 2025-29, OETC has planned the addition of 2,165 km of lines, 21,800 MVA of transformer capacity and 20 grid stations across the three voltages it operates. The highest additions are envisaged at the 400 kV level. Under OETC’s strategy for grid expansion, the 400 kV system will function as the backbone, the 220 kV network as the main transmission system and the 132 kV network as the sub-transmission layer. OETC’s ongoing plans involve huge investments. OETC’s latest five-year capex plan (2024-28) amounts to OMR836 million, with OMR350 million allocated for 2024-25 and OMR486 million for 2026-28.
One of OETC’s key ongoing projects is RABT Phase 2, which extends Oman’s 400 kV network from Duqm Industrial to Shaleem and further to Dhofar, supported by two major new substations. The scope includes the two major 400 kV OHLs, a 290 km link from Duqm Industrial to Shaleem grid stations and a 260 km link from Shaleem to Dhofar stations. The project also involves installation of eight units of 400 kV gas-insulated switchgear (GIS) each at the Shaleem and Dhofar stations, along with two units of 132 kV GIS and 2×500 MVA, 400/132 kV transformers at Dhofar. Reactive power support will be provided through multiple shunt reactors: at Shaleem, 2×85 MVAr for the Shaleem–Duqm line, 2×25 MVAr for the Shaleem–Dhofar line and a 70 MVAr busbar reactor; and at Dhofar, 2×35 MVAr for the Dhofar–Shaleem line plus a 50 MVAr busbar reactor. This project is expected to be completed in 2026. Once the RABT project is fully operational, Oman expects to retire 14 diesel-fired power plants, saving over 175 million litres of diesel annually and cutting CO₂ emissions by 474,000 tonnes per year.
The way forward
Oman’s power sector is evolving rapidly, marked by substantial renewable energy deployment, large-scale transmission upgrades and a clear strategic vision underpinned by Vision 2040. The country’s forthcoming solar and wind projects, combined with the extensive grid reinforcements planned by OETC, including the landmark RABT interconnector, will enable Oman to integrate GWs of new clean capacity, strengthen nationwide system reliability, unlock resource-rich regions and meet growing demand across industrial and urban centres. The country’s efforts are further supported by innovative financing tools and regional interconnection projects that expand cross-border trading potential. Together, these initiatives signal a decisive shift toward cleaner energy, reduced carbon intensity and long-term energy security, reinforcing Oman’s emergence as a regional leader in renewable integration and grid modernisation.