On the starting grid...
Why the new interconnection should be celebrated
December sees the official launch of the most important development to hit the GCC’s electricity markets in recent years – the region-wide interconnection grid. The premise behind the grid – which is already operational in Saudi Arabia, Kuwait and Qatar and Bahrain – is simple; by utilising spare capacity from other countries, the GCC states will aim to avoid the blackouts that have become endemic.
The GCC Interconnection Authority (GCCIA) says that power demand is likely to rise from 32GW in 2003 to around 94GW in 2028, and believes that the cost-benefit ratio of the scheme for all six countries weighs in at around 1.8. GCC countries will be able to trade around half the capacity of their biggest power plant – so around 1,200MW for Saudi Arabia, and so on.
However, one of the grid’s major problems is that the peak load for each GCC country falls simultaneously, meaning that spare capacity is at a premium. According to a state news agency, Kuwait’s load this summer was such that it asked gas-rich Qatar to cover a potential shortfall. In what is hopefully not a sign of things to come, Qatar refused, saying it had no power to spare.
But these are early days. Massive recent and ongoing investment in new power plants mean that countries such as Saudi Arabia are scheduled to have excess capacity in the beginning of next year, according to a recent report from BMI.
While peak load periods are the same for all GCC nations, connection to other regional power pools, such as EJLIST and the Arab Maghreb, will provide access to other key electricity markets. The grid will also provide an opportunity to capitalise on any fibre-optic excess capacity going spare. In addition, the GCCIA says that spinning reserves will be shared to cover emergency operating conditions, and costs will be even further lowered by using the most economic generation unit in the connected systems. Another bonus is that there should, in theory, be a reduced need for new power plants.
No-one is expecting that the grid will solve everyone’s problems immediately. But with more power plants coming online and the slow introduction of nuclear power into the grid at some point towards the end of the next decade in the UAE, the optimists will believe that the ‘Sharjah scenario’ will soon be an unpleasant footnote in the annals of GCC electricity history.