July 24, 2008

Gulf Arab power grid to come on line in 2009 – Report

It is reported that Gulf Arab countries are building the grid to help meet spiraling demand for power as record oil revenues fuel an economic boom in the region and a USD 1.1 billion power grid to connect Gulf Arab states is set to come on line in early 2009, paving the way for a regional electricity market.

Mr Hassan Al Asaad head of corporate affairs at GCC Interconnection Authority said that "Once the grid is ready, it will be a fundamental step, paving the way for a regional electrical energy market." He added that power shortages in the region mean that participating states were unlikely to benefit much from the grid in the short term as they would be unable to contribute power.

Mr Al Asaad said that the grid would eventually facilitate regional trade and encourage the private sector to participate in power generation projects in the GCC. He added that the project is about 55% completed and should be online before the second quarter of 2009.

Construction began in 2004 at a cost of USD 1.1 billion, with each state contributing equally. The grid will have capacity of 1,200 MW but could be expanded later. In the longer term, the grid may become part of a wider pan Arab electricity system and link up to a Mediterranean grid.