October 12, 2008

GCC power grid to be carried out in 3 phases - Report

Mr Saleh Alawaji deputy minister for electricity affairs of Saudi Arabia and also chairman of the GCC Interconnection Authority said that the GCC power grid, linking Saudi Arabia, Qatar, Bahrain and Kuwait, would be carried out in 3 phases. He added that the project will reduce the cost of power generation in member countries.

Phase 1 includes a double circuit 400 kV, 50Hz line from Al Zour in Kuwait to Ghunan in Saudi Arabia with an intermediate connection at Fadhili in Saudi and associated substations and a back to back HVDC interconnection to the 380 kV, 60Hz system at Fadhili. The total cost saving rate of return after 3 years of operations is projected at USD 3.35 billion. The GCC Interconnection Authority, which supervises the project, signed 13 contracts with six companies in October 2005 at a cost of USD 1.079 billion for the implementation of Phase 1.

Mr Alawaji said that “The benefit to cost ratio for first phase is 1:5 and that the payback period for the investment is less than 4 years. Upon completion of phase I and the reduction of generation capacity, the total cost savings rate of return after 4 years of operations would be USD 2.5 billion.

The four GCC countries will be linked in a power grid this year in the first phase of the major project aimed at connecting the 6 member GCC states in an electricity network. Mr Abdullah Al Hussayen minister of water & electricity said that the project aimed at ensuring an adequate supply of electricity in the GCC countries would be completed by the end of 2009. He said the project's cost could be recovered by 2011.

It is noted that the GCC countries gave the go ahead for the power grid project in late 2004 after the project was declared technically feasible.