THE GCC INTERCONNECTION AUTHORITY
The member states of the
Gulf Cooperation Council (GCC) for Arab Gulf States established this authority
on 29 July 2001as a stock company with a capital of SR 4,129.4 million (US$
1,100 million) for financing the integrated transmission network project . The
GCC governments undertake ownership and management of the project via an
independent authority run on a commercial basis. The governments contribute to
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 an electricity line with the output of 400 kilovolts, 50 hertz
along with the construction of a station for the transformation/conversion of
hertz (50/60 hertz) in Ghunan 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 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.
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
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
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.