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Gulf states grid interconnection to deliver $33bln in savings

Gulf states grid interconnection to deliver $33bln in savings Photo Credit:REUTERS/Choi Bu-Seok
GCC Interconnection Authority's longer-term vision is to interconnect with other grids, countries to form a “strong international grid system”
16 May 2017
Conrad Prabhu
Muscat - Grid interconnectivity between the Gulf states, including the Sultanate of Oman, will generate a staggering $33 billion in investment, economic and energy savings for the six member bloc over the next 25 years, according to the GCC Interconnection Authority (GCCIA) — the entity that owns and administers the supergrid interconnecting the national grids of individual member states.

A stock company subscribed by the six GCC states, the GCCIA was established in 2001 initially with a modest mandate to come to the aid of members facing blackouts such as supply contingencies. Its remit has grown to include facilitation of commercial electricity exchanges, energy trading and potential interconnections with countries outside of the bloc.

“The (GCCIA) board aims to save more $33 billion for the GCC countries during the next 25 years by reducing the costs of building power plants, reducing operation and maintenance costs, reducing operational reserves, avoiding interruptions during emergencies, and reducing carbon emissions,” commented Dr Matar al Neyadi, Chairman — GCCIA.

Savings accruing to the GCC states as a result of interconnection amounted to around $404 million in 2016 alone, he noted in the Authority’s newly published annual report for the year.

According to the report, grid interconnection contributed in excess of $1 billion in savings to the Gulf states over the past three years. Most notably, the supergrid responded with emergency supplies in all 157 instances of blackouts and “system incidents” that were recorded across the bloc in 2016. Of this total, the Sultanate accounted for 15 of these emergencies during the past year. Kuwait logged a total of 50 system incidents — the highest last year, followed by the United Arab Emirates (37) and Qatar and Saudi Arabia (25 each). The interconnected supergrid’s response to each of these contingencies was seamless, swift and effective, the Authority noted.

Buoyed by the initial success of the interconnection initiative, the Authority has since kicked off plans for a further expansion of the project. To this end, an Interconnection Expansion Study was launched last year.

The aim of the study is three-fold: to assess the technical and economic feasibility of developing the interconnector between the GCC states, expand it beyond the GCC to other nations, and to have in place generation capacity connected to the interconnector to feed all member states.
Further, with a view to delivering on its fundamental commitment to securing the emergency electricity requirements of the bloc, the Authority has approved the framework governing the Installed Capacity Obligation (ICO). The ICO affixes an obligation upon member states to satisfy demand growth over the April 1, 2021- March 31, 2022 timeframe.

The ICO stipulates a combined requirement aggregating 92,184 MW of generation capacity with a corresponding installed reserve margin of 4.9 per cent. “The coincident peak load is projected at 87,866 MW while the available capacity as per the capacity plans submitted by the member states is 107,065 MW. This means that GCC member states will have an extra capacity of 14,881 MW. This excess capacity creates opportunity to exchange capacity between member states,” said the Authority in its annual report.

The GCCIA’s longer-term vision is to interconnect with other grids and countries to form a “strong international grid system” and to support the development of a strong energy market, it added.

© Oman Daily Observer 2017