Electricity Network Connectivity

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Electricity Network Connectivity Between the GCC
Countries
Presented By Adnan I. Al-Mohaisen May 17, 2005
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BIRTH OF THE GCC POWER GRID

• Originated in the early 1980s by a local GCC
  committee from the electricity sector.
• In 1986 the first project study was conducted by
  a committee from the GCC in coordination with
  the Kuwait Research Institute and King Fahad
  University of Petroleum and Minerals.
• The study was updated in 1990 by Gulf Investment
  Bank and SNC-Lavalin to confirm the
  interconnection was economical and financially
  viable.
• In 2003 another study update was undertaken as a
  final preparation for the project financing and
  tendering, in which the following topics were
  covered
• Techno-Economic Analysis
• Market Study
• Financial Analysis
• Interconnection Agreement
• Implementation Strategy

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GCC INTERCONNECTION AUTHORITY

• Established in July 2001 by a Royal Decree No.
  M/21.
• Owned by the six GCC Countries the authorized
  share capital is
• (US 1,100,000,000) divided into (1,100,00)
  shares of (US 1,000) each share.
• The Authority is managed by a (twelve member)
  Board of Directors each member country is
  represented by two members. The Chairmanship is
  rotated among the member states every three
  years.
• The official domicile of the Authority is
  Dammam, with the Control Center to be located in
  Ghunan, Saudi Arabia.
• The primary objective of the Authority is to
• link up the power grids of the six GCC countries
• operate and maintain the interconnection

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INTERCONNECTION SHARE CAPITAL
Based on the 1990 Project Study it was determined
that the share of the cost of the interconnection
will be the present worth of the capacity savings.
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INTERCONNECTION LINK

• The interconnection is to be constructed in 3
  phase, namely

Phase II
Phase I
Phase III

• Phase I will interconnect Al-Zour (Kuwait),
  Al-Fadhili, Ghunan, Salwa (KSA) and Doha South
  (Qatar) with a 400 kV OHL, and a 400 kV Land
  Submarine cable with Al-Jasra (Bahrain).

• Phase II will integrate the UAE system with a
  400 kV OHL from Shuwaihat to Al-Ouhah.

• Phase III will interconnect Salwa and Shuwaihat
  with 400 kV OHL and Al-Ouhah and Al-Waseet in
  Oman with a 220 kV OHL.

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INTERCONNECTION CRITERIA
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SINGLE-LINE DIAGRAM
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BENEFITS COSTS
Upon the completion of Phase-I and the reduction
of generation capacity the total cost savings
rate of return after 4 years from operations is
2.5 billion US Dollars.
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BENEFITS COSTS
Upon the completion of Phase-III the total cost
savings rate of return after 3 years from
operations is 3.35 billion US Dollars.
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PROJECT ECONOMICS

• The capital cost of constructing Phase I
  estimated at US 1,189 million is depicted below

• It is further estimated that it will cost
  approximately 30 million annually to operate
  and maintain the Grid

• The estimated cost for constructing Phase III is
  US 137 million.
• Although the construction of Phase II is not
  under GCCIA task it is estimated that its
  construction to be approximately US 300 million.

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PROJECT ECONOMICS

• The GCC Grid is expected to reduce the amount of
  new generation capacity required by the GCC
  member states by sharing the reserve capacity
  that needs to be maintained by each system to
  ensure reliability and provide protection against
  outages. The capacity benefits to Year 2028 are
  shown below

Isolated System
Interconnected System

• The cumulative benefit in MW of the
  interconnected system as opposed to isolated
  systems will be 5,113 MW.

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INTERCONNECTION BENEFITS

• Reduce generation reserves
• Provide power exchange and strengthens supply
  reliability
• Improve the economic efficiency of the
  electricity power systems
• Strengthens operational efficiency
• Promoting utilities to construct larger
  generation units to share extra generated power
• Provide opportunities for industrial customers
  and utilities to shop around for more attractive
  supply of power
• Adopt technological development and use the best
  modern technologies
• Providing long-term environmental advantages by
  reducing waste emissions from increasing
  generation plants.

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GLOBAL INTEGRATION

• The technical and economical feasibility study
  for the GCC Interconnection has been proven.
• The GCC Interconnection will enhance the Power
  Systems of the GCC Countries.
• The GCC Countries will be a significant part of
  the Pan-Arab Grid.
• The GCC Interconnection is the main gateway
  towards a Regional and Pan-Arab Power Pools.
• The Power Grid is a fundamental step leading to
  the liberalization of regional power market.

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PROJECT STATUS

• September 2004 SNC-Lavalin of Canada was hired
  to perform the Tendering and Adjudication for the
  Phase I Project.
• Thirty three (33) out of the sixty five (65)
  companies were pre-qualified where some
  companies qualified for only one lot and some
  qualified for all five lots.

• Pre-qualified companies were from local GCC and
  international countries.
• GCCIA will engage an international consulting
  firm affiliated with a local GCC firm for the
  Supervision of the Construction of the Phase-I
  Project.

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PROJECT SCHEDULE
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For further information you can access our
website at www.gccia.com.sa THANK YOU