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24 April 2024

GCC will invite bids for single electricity grid

By Nadim Kawach



Gulf states will invite bids for the final phase of a project that links their electricity stations in a single grid following the completion of the first two stages, a Saudi official said yesterday.

The UAE and neighbouring Oman have already completed their own electricity grid, while the second phase involving four other members is nearly finished, said Abdullah Al Shehri, deputy governor for organisational affairs at Saudi Arabia’s Electricity and Co-generation Regulatory Authority.

“The third stage is expected to be launched this year and could be completed by the end of the year,” he told Emirates Business at a water and power conference in Abu Dhabi yesterday.

“The third phase is awaiting a tender… I believe the GCC countries will invite bids for this project this year… once it is completed, I expect the whole network to be operational by the end of 2009 or in 2010.”

Shehri put the cost of the project at more than $1 billion (Dh3.67bn) but said it would pay off in financial, economic and conservation terms.

“For example, a GCC country that suffers a sudden disruption of its electricity supply could receive supply from another member… another plus point is that a member country with surplus supply could lease part of it to another member facing a shortage,” he said.

“The project will also save money because single grid means member states will construct fewer power stations in the future.”

Shehri said the project was needed because of the rapid growth in power consumption in the GCC as a result of the economic expansion and high population growth.

He estimated electricity growth in the GCC at between eight per cent to 10 per cent annually, one of the highest rates in the world.

“This is a vital and strategic project,” he said. “In the future, the grid could be expanded to be linked with other Arab networks and could be even extended to Europe and other regions.”

The project was launched nearly six years after it was approved by the GCC heads of state a few years earlier.

The Dammam-based GCC Interconnection Authority  (GCCIA) is overseeing the project, which officials expect to result in a 50 per cent reduction in operational reserve and reduce costs of power projects in the region in the long term.

The first phase includes interconnection of Kuwait, Saudi Arabia, Bahrain and Qatar, which is known as the GCC North Grid. The second phase includes 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. Supplies will be shared proportionately by the six members.

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.

The UAE owns 15.4 of the project, while 31.6 per cent is controlled by Saudi Arabia, 26.7 per cent by Kuwait, 11.7 per cent by Qatar, nine per cent by Bahrain and 5.6 per cent by Oman. In a recent statement, the GCC secretariat said the grid would cut power cost requirements by reducing the level of reserves needed in each member.

“It will provide countries and/or regions an alternative source for operating reserves and support during emergencies (blackouts or unforeseen contingencies).

It can provide diversity to the available sources of energy supply by increasing system reliability through the import of different energy sources… it will also upgrade the economic efficiency of power systems and improve the security of power supplies,” the statement said.