x Abu Dhabi, UAEThursday 27 July 2017

New talk of power link for Egypt and Saudi Arabia

Egypt and Saudi Arabia took another step towards their plan to swap electricity in an effort to avoid shortages, according to Egypt's energy minister.

Egypt and Saudi Arabia took another step towards their plan to swap electricity in an effort to avoid shortages, according to Egypt's energy minister.

H, that electricity will be channelled to the country that is experiencing peak demand. Both countries struggle to meet demand during the hot summer months, when air conditioning drives up electricity consumption, particularly in daytime hours.

Power cuts have been angering Egypt's population in the run-up to the Holy Month of Ramadan.

Plans to interconnect the grids of the two countries are long-standing, and the requisite infrastructure was slated for completion next year. But the Arab Spring delayed the plan.

No new timeline has been given. The original plans envisaged that Saudi Arabia sent power west in the mornings, with Egypt reciprocating in the evenings.

The connection between both countries has a wider significance. Saudi Arabia's grid is already linked up with the rest of the GCC, stabilising flows of electricity within the Arabian Gulf and setting up the basis for a regional market. Egypt, meanwhile, is connected to the rest of North Africa, where large-scale investments in renewable energy are taking place. Linking up the two countries therefore provides the platform for the integration of the Middle Eastern electricity sectors.

It also provides for a proxy diversification of energy sources.

GCC countries, with Saudi Arabia and the UAE in particular, are keen to broaden their energy mix with access to North Africa's renewables.

In Egypt, summer demandhas already outstripped capacity, and a helping hand from the kingdom would build goodwill towards it.

"In theory it's an equitable mechanism both countries profit from. In practice, Saudi Arabia may be sending a bit more than it receives, at least in the first few months and years," said Sam Wilkin, an analyst at Control Risks.

The deal also carries geopolitical implications.Iran, Saudi Arabia's chiefrival, has also been making entreaties towards Egypt's leaders after recent elections, and Riyadh is keen to grow its stature versus Tehran.

"They are trying to maximise their influence with the new Egyptian government, but also with the Egyptian people," said Mr Wilkin.

fneuhof@thenational.ae