2. 2
BIRTH OF THE GCC POWER GRID
• Originated in the early 1980’s by a local GCC committee from the electricity
sector.
• In 1986 the first project study was conducted by a committee from the GCC in
coordination with the Kuwait Research Institute and King Fahad University of
Petroleum and Minerals.
• The study was updated in 1990 by Gulf Investment Bank and SNC-Lavalin to
confirm the interconnection was economical and financially viable.
• In 2003 another study update was undertaken as a final preparation for the
project financing and tendering, in which the following topics were covered:
•Techno-Economic Analysis
•Market Study
•Financial Analysis
•Interconnection Agreement
•Implementation Strategy
3. GCC INTERCONNECTION AUTHORITY
• Established in July 2001 by a Royal Decree No. M/21.
• Owned by the six GCC Countries the authorized share capital is
($US 1,100,000,000) divided into (1,100,00) shares of ($US 1,000) each share.
• The Authority is managed by a (twelve member) Board of Directors; each
member country is represented by two members. The Chairmanship is rotated
among the member states every three years.
• The official domicile of the Authority is Dammam, with the Control Center to be
located in Ghunan, Saudi Arabia.
• The primary objective of the Authority is to:
• link up the power grids of the six GCC countries
• operate and maintain the interconnection
4. INTERCONNECTION SHARE CAPITAL
Founders No. of Shares Nominal Value Percent
United Arab Emirates 169 ,400 $169 ,400 ,000 15 .40 %
Kingdom of Bahrain 99 ,000 99 ,000 ,000 9.00 %
Kingdom of Saudi Arabia 347 ,600 347 ,600 ,000 31 .60 %
Sultanate of Oman 61 ,600 61 ,600 ,000 5.60 %
State of Qatar 128 ,700 128 ,700 ,000 11 .70 %
State of Kuwait 293 ,700 293 ,700 ,000 26 .70 %
1,100 ,000 $1,100 ,000 ,000 100 .00 %
Total
Based on the 1990 Project Study it was determined that the share of the cost of
the interconnection will be the present worth of the capacity savings.
5. INTERCONNECTION LINK
• The interconnection is to be constructed in 3 phase, namely:
Phase
II
• Phase I will interconnect Al-Zour (Kuwait), Al-Fadhili, Ghunan, Salwa (KSA) and
Doha South (Qatar) with a 400 kV OHL, and a 400 kV Land & Submarine cable
with Al-Jasra (Bahrain).
• Phase III will interconnect Salwa and Shuwaihat with 400 kV OHL and Al-
Ouhah and Al-Waseet in Oman with a 220 kV OHL.
• Phase II will integrate the UAE system with a 400 kV OHL from Shuwaihat to Al-
Ouhah.
6. INTERCONNECTION CRITERIA
BAHRAIN
U.A.E.
EMIRATES NATIONAL
GRID
AL OUHAH
220kV
220kV
AL FADHILI 400kV
JASRA 400kV
GHUNAN
400 kV
600MW
SALWA
400kV
SALWA
400kV
QATAR
750MW
90km
90km
DOHA SOUTH SUPER 400kV
DOHA SOUTH SUPER 400kV
290km
290km
150km
150km
SHUWAIHAT
400kV
400kV
900
MW
OMAN
OMAN NORTHERN
GRID
AL WASEET
220 kV
400MW
52km
112km
100km
100km
KUWAIT
AL ZOUR
400kV
AL ZOUR
400kV
310km
1200
MW
SAUDI ARABIA
SEC - ERB
HVDC
BACK -
TO -
BACK
1200MW
8. Upon the completion of Phase-I and the reduction of generation capacity the total
cost savings rate of return after 4 years from operations is 2.5 billion US Dollars.
•PHASE I
•:•CUMULATIVE PW OF BENEFITS AND COSTS IN
•$ MILLION•(
•Jan
•.•2008
• @•6%
•)
•0
•500
•1000
•1500
•2000
•2500
•3000
•Year
•Cumulative
PW
of
•Benefits
and
Costs
•Phase I Benefits •Phase I Costs
BENEFITS & COSTS
9. Upon the completion of Phase-III the total cost savings rate of return after 3 years
from operations is 3.35 billion US Dollars.
•PHASE I&III •:•CUMULATIVE PW OF BENEFITS AND COSTS IN
•$ MILLIONS •(
•Jan•.•2008• @ •6%•)
•0
•500
•1000
•1500
•2000
•2500
•3000
•3500
•Year
•Cumulative
PW
of
Benefits
and
Costs
•Phase I & III Benefits •Phase I&III Costs
BENEFITS & COSTS
10. PROJECT ECONOMICS
•The capital cost of constructing Phase I estimated at US$ 1,189 million is
depicted below:
•It is further estimated that it will cost approximately $ 30 million annually to
operate and maintain the Grid:
Total O&M Cost
14
6
4
6
30
1
Lot
Transmission Lines
Cable System
Substations
Converter Station
Control Station
Total 1,189
392
293
172
302
30
Capital Cost
•The estimated cost for constructing Phase III is $US 137 million.
•Although the construction of Phase II is not under GCCIA task it is estimated
that its construction to be approximately $US 300 million.
11. PROJECT ECONOMICS
•The GCC Grid is expected to reduce the amount of new generation capacity
required by the GCC member states by sharing the reserve capacity that needs
to be maintained by each system to ensure reliability and provide protection
against outages. The capacity benefits to Year 2028 are shown below:
Load (MW) Total Installed Capacity Reserve (MW)
93 781 105 781 MW 12 085
Isolated System
Interconnected System
Load (MW) Total Installed Capacity Reserve (MW)
93 781 100 726 MW 6 945
•The cumulative benefit in MW of the interconnected system as opposed to
isolated systems will be 5,113 MW.
12. INTERCONNECTION BENEFITS
• Reduce generation reserves;
• Provide power exchange and strengthens supply reliability;
• Improve the economic efficiency of the electricity power systems;
• Strengthens operational efficiency;
• Promoting utilities to construct larger generation units to share extra
generated power;
• Provide opportunities for industrial customers and utilities to shop around for
more attractive supply of power;
• Adopt technological development and use the best modern technologies;
• Providing long-term environmental advantages by reducing waste
emissions from increasing generation plants.
13. GLOBAL INTEGRATION
• The technical and economical feasibility study for the GCC Interconnection has
been proven.
• The GCC Interconnection will enhance the Power Systems of the GCC
Countries.
• The GCC Countries will be a significant part of the Pan-Arab Grid.
• The GCC Interconnection is the main gateway towards a Regional and Pan-
Arab Power Pools.
• The Power Grid is a fundamental step leading to the liberalization of regional
power market.
14. PROJECT STATUS
• September 2004 SNC-Lavalin of Canada was hired to perform the Tendering
and Adjudication for the Phase I Project.
• Thirty three (33) out of the sixty five (65) companies were pre-qualified; where
some companies qualified for only one lot and some qualified for all five lots.
Substations
HVDC
OHL
Cable
Control
4
22
6 7
4
• Pre-qualified companies were from
local GCC and international countries.
• GCCIA will engage an international
consulting firm affiliated with a local
GCC firm for the Supervision of the
Construction of the Phase-I Project.
15. PROJECT SCHEDULE
TASKS DATE
Pre-Qualification Exercise August 2004
Pre-Tender Meetings March 2005
Tender Submittals June 2005
Technical Bid Opening June 2005
Commercial Bid Opening TBA
Evaluations August 2005
Contract Awarding October 2005
Operations Commencement 1st Qtr 2008
