GCC Interconnection Authority

The GCC Interconnection Grid:

Benefits & Beyond
MEDELEC 2008 Conference
"Toward a Mediterranean Electricity Market“

Sharm El-Sheikh, 26-27 of May 2008

Adnan Al-Mohaisen CEO GCCIA

 Purpose of the Interconnection

 Based on the GCC Long-Term Comprehensive Development

Strategy Goals which stands out:

 “Complete interlinking of the infrastructure network among the

GCC States, especially in the field of electricity, transportation,
communication and information.”

 Hence, the Authority formed by Royal Decree to:

 Link the Power grids of the six member States
 Operate and maintain the Interconnection Grid
 Eventually become a regional player in the Electricity Trading
Market
 The Timeline

Pre-Construction Construction Operations

• Instigation – Early 80’s • Preliminary ROW • Regulation
Survey (Land) - 2004
• Committee formed – •Systems Operations
• Sea Survey Contract –
1986
2004 • System Maintenance
• First Study – 1990
• Tendering & • Training
• Authority established Adjudication Exercise
by Royal Decree - 2001 - 2005 • Market Operations
• Contracts Awarded
• Organizational set-up
for:
began in May 2002
- Construction (2005)
- Legal (2006)
• Second Study – 2003
- Org. Develop (2005)
• GCC Summit in Kuwait • Recruitment Process
‘Go Ahead’ - 2004
Approximate Route

Control Center
Substations
HVDC Converter
 Benefits

Reduce generating capacity in each system as a result of sharing

power reserves

Sharing spinning reserves to cover emergency conditions

Provide emergency support to any system during black out situations

Lowering operating costs by using most economic generation unit in the

Interconnected system

Provide opportunity to engage in regional and international

Energy trading
Interconnection - Construction
 Construction

Contract Facility % Complete

112 Substations 86.76

113 HVDC Converter 70.01

114 (1,4) OHL – OPGW 68.90

114 (2,3) OHL – OPGW 54.44

115 Land & Submarine Cable 15.06

116 Control, Protection, SCADA 71.54

Total Complete 54.67
 Construction

GIS Floor Reinforcement – GIS Building –

Al Zour Substation Al Jasra Substation
 Construction

HVDC Complex – ICC Building –

Valve Hall & Control Building Cable Trays (1st Floor)
 Construction
Al-Fadhili 400 kV Substation (Installation of Gantries)

10
 Construction
Al-Fadhili 400 kV Substation (Installation of SF6 GIS)

11
 Construction
Al-Fadhili 400 kV Substation (Installation of 125 MVAR Shunt Reactors)

12
 Construction
Al-Fadhili 400 kV Substation (GIS Driving Mechanisms)

13
 Construction
OHL 400 kV – DC Towers OHL 400 kV – DC Towers
(Tension Type) (Suspension Type)

14
Interconnection – Legal Agreement
 Legal – General Agreement

General
Agreement

Power Exchange
& Trading Agreement

Interconnection & Use Trading

of System Agreement Agreement

Transmission
Code
 Legal – General Agreement

A document which lays out the fundamental agreement between

Member States with respect to the Electrical Interconnection:

1. Setting out the rules and regulations to be applied on the Member

States with respect to the Interconnector (i.e.):
a) Rights of Interconnection
b) Connection Fees
c) Performance
d) Defaults
e) Governing Law
f) Termination

2. As well as defining the Regulatory Principles the concerned

parties will abide by in terms of Policy and Regulation
 Legal – General Agreement (Cont’d)

Concerned Parties to the General Agreement:

Member States:

(1) The Government of the United Arab Emirates

(2) The Government of the Kingdom of Bahrain

(3) The Government of the Kingdom of Saudi Arabia

(4) The Government of the Sultanate of Oman

(5) The Government of the State of Qatar

(6) The Government of the State of Kuwait

 Legal – PETA

Is a framework agreement setting out the terms on which the parties

shall:
• Connect to / have access to the Interconnector; and
• Use the Interconnector for scheduling transfers of energy and
power.

 The PETA is made up of three main components: -

 Trading Agreement: which sets out the terms on which the parties may use the
Interconnector for scheduling transfers of energy and power.

 Interconnection and Use of System Agreement : which sets out the terms on
which the parties will connect to / have access to the Interconnector.

 Transmission Code : which set out the detailed technical rules that govern
connection to / access to the Interconnector where the interconnection and use of
system agreement requires each party to comply with the Interconnector
transmission code.
 Legal – PETA (Cont’d)

Concerned Parties to the Power Exchange & Trading Agreement:

• Determined by the structure and legislation in each Member

State:

• It can be a MS TSO whose responsible for both

transmission and the procurement and sale of energy and
power; or

•Where a MS has a TSO responsible for transmission and

another entity responsible for procurement and sale of
energy and power, then both the TSO and the Procurement
entity are parties to the PETA.
 Legal – Framework

GCC Ministerial
Committee
General
Agreement
E & W Ministerial
Committee Level Regulatory & Advisory
Committee

General Assembly GCCIA

Articles / Bylaws
& Board Level Board of Directors

Planning Operating
Committee Committee
PETA

GCC Utilities Level GCCIA - CEO

Transmission
& Metering Codes
 Legal – Organizational Arrangement

GCC E&W
Ministers Committee

Regulatory & Advisory

Committee

GCCIA Board

MS MS
Operations Committee Planning Committee
Utilities Utilities

CEO
 Legal – Regulation

Regional
GCCIA Board R&AC
Regulator

• A set of principles are currently being developed to regulate the use

of the Interconnector.
• Initially, the GCCIA Board will oversee and advise on Regulation.
• Once formed the Regulatory & Advisory Committee will be
responsible for ensuring all concerned parties comply with:
1. Regulatory principles
2. Performance Standards
• The RAC will act as regulator until a regional energy regulator is
formulated by Member States.
 Legal Agreements – ‘A Necessity’

The Legal Agreements are the basis for the entire interconnection.

“Without the Agreements we have NO Interconnection”

• The Authority will play the role of TSO for the Interconnector by
facilitating bilateral trade between the various Member States and
ensuring a reliable and secure system.

•The development of the legal agreements will further enhance the

Authority to embrace a more elating task of becoming a broker
between regional and international utilities and regulators.
Interconnection – Trading Beyond the GCC
 Trading Beyond the GCC

With the construction of the ‘Back-Bone’ and the development of the

legal agreements between the Member States the GCC Grid can
become a major player in future energy trade.
Pave the way towards a proper electricity trade between the GCC and
eventually with Middle East countries requiring strong
interconnections, a common trade structure and capacity expansion.

Access the European (UCTE) electrical systems – thus opening the

way for higher regional efficiency that makes use of seasonal diversity
of loads between regions.

System & Market

System Operator
Operator

Duration (Anticipated)
Y1 Y3 Y5 Y7 Y9 Y11
Interconnection – Other Benefits
 OPGW Fibre Optic Cable

Realizing the potential opportunities the power grid can provide to the
region the Authority have recently engaged in exploring utilizing the
OPGW fibre optic cable which is part of the transmission line and land &
submarine cable

The cable consists of 48 fibres; in which 12 fibres will be reserved for

electrical power uses and the remaining 36 fibres can be used for future
applications

Authority can lease out the fibres to one or many potential

telecommunication companies

The Authority has approached the Telecommunication regulators in

some of the GCC Countries to discuss laws pertaining to the
telecommunication industry (i.e.) licenses, landing point rights,
etc.
 Conclusions

 As a ‘Back-Bone’ the GCC Grid will be a fundamental step paving

the way for a regional GCC electrical energy market

 It will promote regional trade and encourage the private sector to

participate in Generation Projects (IPP) in the GCC region.

 Become part of a Global Interconnection:

 Pan-Arab Grid (EJLIST & Arab Maghreb Grids)

 Mediterranean ‘Ring’ Grid (UCTE)

 Provide vast opportunity for companies in the telecommunication

industry
 Thank You

www.gccia.com.sa