The Authority for Electricity Regulation Oman (AER) is preparing the groundwork to enable the growth of Energy Services Companies (ESCOs) to help support the government’s energy efficiency goals. The move is part of a slate of initiatives planned by the Authority for development and implementation during this calendar year. Key priorities and objectives on the agenda, also known as the ‘Forward Work Programme for 2018’, were outlined at a press briefing by the Authority.
ESCOs specialise in the development, design, construction and finance of projects that help customers save energy and reduce energy costs, while making their operations energy efficient. Through energy-efficiency retrofits and renewables-based initiatives, ESCOs help their customers slash overall energy consumption. ESCOs get remunerated based on performance targets achieved in reducing energy costs — a business model that is driving the growth of such companies in markets that place the accent on energy efficiency.
Explaining the strategy for the establishment of an ESCOs market in the Sultanate, the Omani power sector regulator said: “The Authority undertook a number of government building audits in 2017. In 2018, the Authority intends to build on the work undertaken in 2017 with the objective of establishing local Energy Services Companies to support the government’s energy efficiency objectives. This includes assessing best sectors in the country to target and ensure reasonable demand, and raise the capabilities of local SMEs to undertake the work of ESCOs.” Speaking at the briefing, AER Executive Director Qais al Zakwani said the goal behind the establishment of an ESCOs market stems from its mandate to promote energy efficiency in the Sultanate — a responsibility it was conferred upon in 2015.
As a first step, the Authority began to gather relevant data in order to provide the “empirical basis” for formulating policies and guidelines necessary to support national energy efficiency efforts.
Such policies would need to take into account, for instance, energy usage in residential premises, what its building codes are, energy efficiency of appliances used on the premises, behavioural aspects of power consumption by users, and so on.
“We did an audit of a couple of government buildings in 2017, which gave us insights on how these buildings were built and the behavioural aspects of users in those buildings. We had assigned this task to a national energy auditor,” Al Zakwani said.
“In 2018, our idea is to train and develop local energy auditors as energy services companies,” the Executive Director further added. “This year, we will work with the SME Authority to enable a number of energy audit companies who will then be able to go out and provide their services to residential, commercial, and government customers.”