THE GCC INTERCONNECTION AUTHORITY

The GCC member states of the Gulf Cooperation Council (GCC) established this body on 29 July 2011 as a joint stock company with a capital of SR 4,129.4 million (US$ 1,100 million) to finance the project for linking the transmission networks of the GCC member states. The GCC governments undertake ownership and management of the project via an independent authority run on a commercial basis. The governments shall contribute 35% of the capital and 65% of the capital shall be raised to cover the costs of implementing the project. The headquarters of this body is based in Dammam.

In our continuous effort to achieve our strategic and future objectives, SEC has become the owner of the Kingdom's share and is the Saudi partner in the capitalization of the GCC Interconnection Authority with SEC contributing 31.6% of the capital. The authority has been established for the purpose of interconnecting the electric power networks of the Gulf Cooperation Council (GCC) member states namely the United Arab Emirates, Kingdom of Bahrain, Kingdom of Saudi Arabia, Sultanate of Oman, Qatar, and Kuwait to reduce the volume of capital investments required for the construction of infrastructures, facilitate accessibility to electric energy, and enhance the reliability of the electrical grid in each country.

The project comprises the construction of a power line with the output of 400 kilovolts, 50 hertz, along with the construction of a 50/60 hertz transformation/conversion station in Ghazlan, in Saudi Arabia, to link the Saudi Arabian 60 hertz grid with the line of interconnection with the other GCC states' 50 hertz grids. The interconnection line will be implemented at in three phases as follows:​

  • The first phase (northern electricity circle): To interconnect the electricity grids of Kuwait, Kingdom of Saudi Arabia, Kingdom of Bahrain, and Qatar.
  • The second phase (southern electricity circle): To interconnect the electricity grids of the UAE and Oman.
  • The third phase: To interconnect the northern and southern circles after they are completed.
Studies conducted on an annual basis have shown the strategic, economic, technical, and operational benefits of the electricity interconnection by virtue of this partnership.

Hereunder are some of the most important benefits: 

1.  Reduction of the volume of capital investments required in the electricity generation reserves and avoidance of the construction of new generation plants as the interconnection project will result in providing generation outputs estimated at 3,595 megawatts for the countries covered by the first phase at an estimated cost of SR 9.4 billion, including the provision of an output of 1,609 megawatts for the grid of the Eastern Region in Saudi Arabia at an estimated cost of SR 3,789 billion.

2. The electric grid interconnection project enables all interconnected electric systems to connect electric energy services to their respective national loads centers and keep generation output reserves amounting to half the required reserves (15% - 20% of the total available generation outputs) before the interconnection project at the same reliability or may at a higher reliability of electric service.

3. Various feasibility studies conducted within the past two decades upon various assumption and hypotheses (deducing price, investment costs, and timeline schedule) have shown that there is a tangible benefit of the project. The net benefit rate ranges between 11 cents as a minimum and 87 cents as a maximum per each dollar invested in the project.

4. Implementation of the GCC electric interconnection project paves the way for the GCC member states to interconnect with the Arab interconnection grid and later on with the European electric interconnection grid. Since the GCC member states host two thirds the international reserves of oil and gas, the interconnection project will enable the GCC region to be an exporter of electricity to the Asian and European countries. This, in turn, will contribute an added value of the electricity sector in the gross domestic product and will diversify the sources of income in the national economy.

As for the indirect benefits of the project, they include the development of industries associated with the manufacturing of towers, cables, electric equipment and spare parts in the GCC member states as well as the enhancement of growth in the sector of constructions and their elementary materials. In this connection, a benefit of more than 40% of the value of the project is expected to be achieved in comparison with 30% as a share in case of continuing the construction of electric generation stations in each country. The Authority will prepare the documentation of the project and prequalification of construction contractors in preparation for internationally tendering the project by the Private Sector during the first quarter of next year.