Common GCC Power Grid To Save $ Billions
Jan 9, 2008 - Middle East Business
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.
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
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
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,”
“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
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
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
“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.