Common GCC Power Grid To Save $ Billions

Dubai, UAE - January 9, 2008: Six Gulf Arab states linking their electricity networks in a single grid will save billions of dollars in the next 20 years and ensure security of supplies in case of any disruptions, according to a Gulf electricity official.

The UAE and neighbouring Oman have completed integrating their own network and the remaining of the two phases of the landmark project are expected to be completed by 2010, said the official from the Gulf Cooperation Council (GCC) Interconnection Authority (GCCIA), which is overseeing the project.

Hassan Al-Asaad, senior official of the Corporate Affairs Division in the Dammam-based GCCIA, expected some phases to be ready ahead of schedule and said the joint GCC electricity network would bring many benefits to the six countries, including improved supply security and economic, environment and technological advantages.

In an interview with Emirates Business newspaper, he noted that the network, which is currently under construction, would be responsible for interlinking the power systems of all the GCC states.

“By 2028 it is expected that the GCC Grid will save billions by sharing generation reserves between the linked GCC countries thus allowing the reduction of the reserves by 50% of an isolated system, and thus avoiding the cost of constructing generation plants to meet growing population demands,” he said.

“The first phase is expected to be completed by 1st quarter 2009. The second phase which consisted of integrating the independent power systems in UAE and Oman and connecting the two countries is already complete. The 3rd phase which will connect phase 1 with phase 2 is expected to be completed in 2010.

Al-Asaad said the total cost of the project, which could pave the way for a bigger project linking the GCC and other Arab nations, is estimated at $1.2 billion.

GCC heads of state approved the common grid plan at their summit in Kuwait in 1997 and it was launched nearly four years later. GCCIA officials expect the project to result in a 50 per cent reduction in operational reserve and slash costs of power projects in the region in the long term.

The first phase includes the interconnection of Kuwait, Saudi Arabia, Bahrain and Qatar, which is known as the GCC North Grid. The second phase will include the introduction of independent systems in the UAE and Oman, dubbed the South Grid, which the GCCIA is not involved in.

The third phase includes the interconnection of the South and North Grid, which completes the interconnection of all six GCC countries.

According to GCCIA, each member state would be able to import up to the value of its interconnection size, which for Bahrain is 600 megawatts per day.

For the UAE it is 900 MW, for Saudi Arabia 1,200 MW, for Oman 400MW, for Qatar 750 MW and for Kuwait 1,200.MW.

“Associated with the development of power interconnection are several benefits whether they are economical, environmental and technological. The economic benefits of interconnections have historically been providing improved security of power supply and better economic efficiency,” Asaad said.

“The security of power supply is considered to be the main purpose of constructing power interconnection between countries by sharing generation reserves and installed capacity in order to reduce additional investments in electricity generation infrastructure and related projects.” Demand for electricity in the GCC, which controls over 40 per cent of the world’s oil, has grown by at least 10 per cent over the past decade and is expected to pick up in the coming years because of a steady growth in many sector, mainly the industrial sector. This has prompted the six members to embark on mega projects to ensure their power supplies in the long term.

Besides the common power grid, GCC states are expected to invest more than $45 billion into projects to expand their current electricity generation capacity.

Figures by the UK?s Benoil Services Ltd showed the UAE would invest nearly eight billion dollars to boost capacity by 7,000 megawatts while Kuwait could pump around $3.6 billion in the additional production of 5,000 megawatts.

Saudi Arabia, by far the largest GCC member, is projected to channel around $30 billion in the financing of projects to increase the productive capacity of existing power plants and setting up of new power projects, thus boosting the total energy output by roughly 20,000 megawatts.

Qatar will spend around $3 billion on raising power production by 2,500 megawatts. While Bahrain and Oman are expected to invest $1 billion and $800 million dollars respectively, according to Benoil.

“Investments could rise to $100 billion in the long term as member countries need to keep abreast of growing demand,” it said in a recent report.

Six Gulf Arab States Linking Their Electricity Networks In A Single Grid Will Save Billions Of Dollars In The Next 20 Years And Ensure Security Of Supplies In Case Of Any Disruptions According To A Gulf Electricity Official.