$1.5bn GCC power grid on track for early 2009

Mar 18, 2008 - Gulf-times.com - Doha Time

ABU DHABI: The Gulf Co-operation Council Interconnection Authority, or GCCIA, yesterday said four Arab Gulf states will be connected for the first time through a $1.5bn common electricity grid from early 2009, saving countries as much as $3bn in electricity investments over 20 years.

The GCC Interconnection grid, which will link the power networks of the six GCC states, is 60% complete and will be operational in the first quarter of 2009, Ahmed Ali Ebrahim, GCCIA director for system operation and maintenance said here.

“By the year end we will start commissioning of the interconnection. We will start operation by early 2009,” Ebrahim said on the sidelines of the Middle East Power and Water 2008 conference. The first phase of the project will see the interconnection of four GCC states – Kuwait, Bahrain, Qatar and Saudi Arabia – with Oman and the UAE to follow in 2010 under phases two and three.

The project is aimed at helping Gulf states meet soaring power requirements amid an economic boom that has seen billions of petrodollars flow into industrial, tourism and real estate projects, in turn driving up electricity needs.

“The basic reason for building the grid is that it will save $3bn in investments in installed generation capacity in the next 20 years,” Ebrahim said at the conference, organised by the London-based Middle East Economic Digest.

The system will also allow the transfer of electricity between countries at times of different peak demand needs. “Countries will need to keep less reserves,” Ebrahim said.

In the longer term, the grid could serve as a launch pad for energy trading between GCC states, he added. The grid, which was first considered in 1982, should also help lower electricity prices and may subsequently reduce government subsidies as a result of better efficiency in the regional power sector.

“The price of the electricity unit overall should go down because of the possibility of energy trading and savings from efficient investments,” Ebrahim said.

The grid’s fibre optic cables may also have another use, such as telecommunications, said Hassan al-Assad, the GCCIA’s head of corporate affairs.

The authority may lease the capacity to one or more telco providers to generate additional returns for the GCCIA, al-Assad said. - Zawya Dow Jones