Gulf Interconnection Authority invests $3.5 billion to become regional hub for electricity export

The GCC Power Grid, which connects six Gulf States, will invest over $3.5 billion in the next 10 year to strengthen the grid and integrate renewable resources, as well as to open up new export opportunities for neighbouring countries. This was revealed by the head of GCCIA, the grid operator, on Tuesday.

Ahmed Al-Ebrahim CEO of the Gulf Cooperation Council Interconnection Authority said that the GCC grid will connect to Iraq in April next year, which is its first external connection outside the region. It is also planning to connect to Jordan, Egypt, and Syria in the future.

The transmission system of the Gulf Cooperation Council links all six member states from Oman to Kuwait.

Al-Ebrahim stated that the region's renewable power capacity would be large in the future and that the opportunities for the future were very promising. Saudi Arabia's goal to generate 50% of electricity from renewable sources in 2030, for instance, will create a major opportunity for power exports to Egypt and Europe from the Gulf, Al-Ebrahim said.

The GCCIA will fund the projects, and recover costs by charging annual fees to its members.

Al-Ebrahim stated that negotiations are underway to finalise the electricity export agreements between Iraqi and Gulf state states before the GCC grid connects to Iraq.

He said that the project cost exceeded $300 million and was financed by GCCIA without profit margin. The authority is expecting to recover its investment in seven years via transmission tariffs.

Jordan and Syria may also be included in the expansion plan. Al-Ebrahim stated that the first step is to connect with Iraq. Then, we will consider future opportunities.

The high and fluctuating power demand in the Gulf is a major challenge for power grids, he said.

He added, "This is when interconnection becomes important to stabilise grids and lessen the impact of these fluctuations." (Reporting and editing by Susan Fenton; Ahmed Hagagy)

(source: Reuters)