Gulf Power Grid Could Extend Connection to North Africa and Europe

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Written by Richard Finlayson, Senior International Editor for Industrial Info--The Arab League is conducting a study on a possible electrical power connection between the Gulf Power Grid (GPG) and the broader Middle East region, including North Africa, while Saudi Arabia and the World Bank are conducting a study on connecting the region with Europe.

These developments were outlined at the inauguration of the second phase of the $1.4 billion grid project in Abu Dhabi, when the United Arab Emirates (U.A.E.) joined with Saudi Arabia, Kuwait and Qatar, which had joined in the first phase of the grid in 2009. Oman, which was going to join the grid with the U.A.E., is now planning to connect in two years time, as it is experiencing rapid growth in power demand.

The GPG will save the members $5 billion in power costs and will lay the foundation for a common energy market between the GCC countries and will provide GCC states with sustainable energy supplies to support national economies, said Shaikh Mohammed bin Rashid Al Maktoum, the vice president and prime minister of the U.A.E. and leader of Dubai. Dubai has contributed $224 million to the project.

The current power-exchange capacity allows for Saudi Arabia to import and export 1,200 MW, the U.A.E. 900 MW, and Qatar 750 MW. Member countries will trade power between themselves starting in 2012 and will be required to maintain minimum reserve levels of power to assist other members in case of emergencies. Penalties will be imposed if these reserve levels are not maintained. Discussions are taking place on commercial power sales. At present, each of the Gulf countries can negotiate bilaterally with one another to agree on tariffs for the purchase and sale of electricity, said Essa Al Kawari, the chairman of the Gulf Cooperation Council Interconnection Authority.

More power capacity is needed by the Gulf countries to sustain growth, which averages 10% a year. With high summer temperatures putting pressure on air conditioning and refrigeration demand, a growing and more affluent population and industrial expansion the power consumption growth is likely to extend into the next decade.

Mohamed Al Hamil, the U.A.E. oil minister, said that the annual growth rate of electricity consumption in the Gulf was far ahead of the average increase elsewhere in the world. He said that while domestic demand was high during summer, there was a lot of spare power capacity in winter which could be exported.

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