The power grid connections are becoming an increasingly important element to form regionally integrated electricity markets in order to achieve efficiency, reliability and environmental objectives.
The GCC’s significant success in electricity interconnectivity for the six member bloc has offered many benefits while providing a sustainable alternative within the energy sector.
The GCC Interconnection Authority interlinking all the Gulf states’ power systems, has enabled increased efficiency and energy savings, which in the next 25 years is said to be whopping $30+ billion as the power grid will reduce investment costs in building power plants by reducing operational reserves, reduce operation and maintenance costs as well as enable energy trading and avoid supply contingencies.
Over the years, the GCC power grid remit has grown to include facilitation of electricity exchanges not only between the GCC countries but the wider Middle East and North Africa (MENA) region thus making it a major exporter of power.
However, the electricity market integration challenges have continued to pose implementation difficulties in the past.
Reforms are underway in several countries in the region but still specific laws and policies are not clearly defined to effectively integrate regional electricity market and promote cross-border electricity trade. Moreover, subsidized power generation remains major stumbling blocks to facilitate electricity trade in the region.
The plans are in place to expand the GCC grid to Egypt and Jordan. While the Jordan-Egypt interconnection has a 450 MW capacity, the Egypt-Saudi Arabia interconnection is under development, with a total designed capacity of 3,000 MW, and is expected to be fully operational by 2025. A 200 MW Jordan-Saudi Arabia interconnection is also planned to be operational by 2025. Despite significant transfer capacity, the effective utilization of GCC interconnections has been very low, only around 5-6 percent but the upward trend is now being observed.
The GCCIA’s long-term vision is to have a strong international grid system, widespread availability of electricity to communities and to support the development of a strong energy market alongwith the cost-effective integration of variable renewable generation. Local governments have started showing a strong positive consensus in this respect.