Grid Integration Effect on GCC countries’ Power Rental Market

Trends & Insights

Gulf Cooperation Council, or GCC, countries started integrating their power grids in November 2005. The interconnection was planned in three phases. The first phase, completed in 2009, interconnected the power grids of Kuwait, Saudi Arabia, Bahrain and Qatar. These interconnected countries took to power trading, i.e., exchanging of electricity for a price among themselves, for first time during summer of 2010. Since then, there have been 1,100 instances of power trading between the GCC countries for stability and support of individual power grid of the countries.

The UAE connected to the power grid in 2011, which operationalized the second phase of the GCC countries power grid integration. The second phase was originally meant to integrate internal power systems, or power grids of the UAE and Oman. However, this was done in 2006 without the involvement of the body meant for GCC power grid integration, i.e., GCC Interconnection Authority (GCCIA). Therefore, the third phase, which involved connection of interconnected grids of the UAE and Oman to GCC countries’ power grid, wasn’t needed.

The GCCIA is now working to increase the power trading between countries through the use of the power grid for economic gain, instead of its current use: to provide support and stability to the individual power grid of GCC countries. In 2014, the utilization of grid stood at just 8 percent of its capacity. However, it’s expected that with efforts of GCCIA and interests of GCC countries, its utilization will become substantial by 2019 and will save GCC countries over $6 billion, as suggested by Mr. Ahmed Ali Al- Ebrahim, Chief Operating Officer of GCCIA. In addition, GCCIA is also planning to expand the grid capacity starting in 2019.

Power rental companies of GCC countries are wary of these developments and are expecting that these power project opportunities, usually with the power grid companies of the GCC countries, will gradually diminish, and few power rental companies are of opinion that these opportunities will completely be over by 2018 (particularly in Saudi Arabia).

To understand more about the power rental market of GCC countries, pre-order our ‘Middle East Power Rental 2015’ report to get a 10 percent discount on the price. To know more about the power rental market of different regions of the world, you can go through our ‘Indian Subcontinent Power Rental 2015’ and ‘North American Power Rental 2015’ reports. Additionally, you can also pre-order our ‘African Power Rental 2015’ report, due out in early October.

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Photo by Jay Shukla