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Saudi-Egypt grid connection could be PPP

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The GCC is on its way to become increasingly connected.

The final decision on a grid connection between Saudi Arabia and Egypt could be taken within six months, with the contract for the project possibly being awarded as a public private partnership, according to the head of the Saudi Electricity Company (SEC).

“We are now deciding on the financial model. It could be an IPP [independent power project], we haven’t decided yet. This could happen within the next six months,” Ali Al Barrak, CEO and president of the SEC, told Utilities Middle East.

“It would take five to six years for implementation to be complete,” he added.

The two countries are currently evaluating the project, a process that involves three stages, said Al Barrak.

The first stage was undertaking a feasibility study. As demand for electricity in both countries is about 3,000MW to 4,000MW higher during peak demand, and both countries peak at significantly different times, the study confirmed the project to be feasible.

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The countries are now in the final stage of the decision-making, which revolves around choosing the financial models for grid connection, said Al Barrak.

A connection between the two countries would enable them to trade electricity, which would ease the requirements on power generation in both countries. Generation capacity needs to equal peak demand, when consumption is significantly higher. As both countries peak at different times, they would be able to make use of each other’s capacity when most needed, reducing the need to build up generation capacity.

Saudi Arabia is already connected to its neighours Qatar, Kuwait, and Bahrain through the GCC Interconnection Grid. Within 2011, it will be also connected to the UAE and Oman.

Experts expect this connection to lead to a regional energy market. Already, 200 transfers of power have been undertaken since initial connection had been established in 2009, according to Dr Abdulmajeed Alawadhi, CEO of Bahrain’s Electricity and Water Authority (EWA).

In the long term, a connection between the GCC and Europe, via Turkey or the Maghreb countries, is likely, say both Al Barrak and Alawadhi.