LAUSR

Abstract Electrical energy consumption if reduced during peak hours can result in the deferment of generation, transmission and distribution capacity addition. The postponement of capacity addition, or “avoided cost” is of promising value to electric utilities who can redirect financial resources for other purposes due to these offset costs. The reduction in energy consumption is achievable through smart grid implementation. Therefore, the utilities need to investigate whether upgrading their grid system to make it smarter is economically justifiable or not. Electricity companies have used the smart grid maturity model to assess their rating/ranking in different domains. The paper provides a framework for establishing future strategies and work plans as they pertain to smart grid implementations. The objective of this paper is to evaluate the demand-side management (DSM), energy efficiency measures and distributed generation benefits of smart grid in Oman. The developed scenarios include grid enhancement, customer contribution to the grid and both of these options simultaneously. The scenarios are analyzed for peak reduction and their benefits are calculated in terms of avoided cost of generation, transmission, distribution, and environmental costs.