Saudi Arabia expects to sign an electricity-sharing agreement with Egypt that would kick start the construction of power lines connecting North Africa to the Arabian Gulf.
Saudi, Egypt electricity deal close
Saudi Arabia expects to sign an electricity-sharing agreement with Egypt that would kick-start the construction of power lines connecting North Africa to the Arabian Gulf.
The plan, previously stalled because of the Arab Spring, is back on track.
Three-gigawatt power lines between Riyadh and Jeddah and Medina and Tabouk are expected to be completed in the next three to four years, and by 2019, Saudi Arabia should be able to start exporting electricity.
"Saudi Arabia is building a backbone," said Abdullah Al Shehri, the governor of its Electricity Co-Generation Regulatory Authority, the federal regulator.
"We expect in coming years there will be a strong connection with Egypt."
The proposed link would transform the electricity market in the Arabian Gulf, where all the GCC countries are interconnected through a high-voltage network.
Nations initially agreed to buy electricity from neighbours for cash, but sales in the past year have levelled off as each country becomes more able to meet their domestic power demand locally. Today it is used mostly on an emergency basis, and trades are done in kind rather than in cash: megawatts today for megawatts tomorrow.
The GCC Interconnection Authority (GCCIA), the Saudi-based body in charge of the network that met in Dubai yesterday, hopes to encourage members to use an online bourse for electricity trading launched this year.
Members hoped to hammer out pricing norms and legal arrangements in the meeting.
"We'd like to see more trading," said Mr Al Shehri. "For almost half the year [in Saudi Arabia}, half of our capacity is unused."
A link with Egypt would allow Saudi as well as other Gulf nations to supply excess power during winter months as well as take advantage of time zone differences.
The UAE connected to the GCC network in 2011 after contributing Dh800 million to the US$1.4 billion project. With an average operating cost of $40 million a year, the network could save members Dh18bn in power costs, estimates the GCCIA.
Other cross-border energy projects include the Dolphin pipeline, which supplies Qatari gas to the UAE and Oman, and a proposal to build a shared nuclear waste repository for the GCC.
Then there is Desertec, the Germany-led plan to connect industrial-scale solar power plants to customers in Europe via high-voltage subsea cables.
Amid the Arab Spring, it has shifted its focus to helping governments in Egypt and Morocco craft renewable energy frameworks and is working with Saudi Arabia through a programme launched this year.
Gulf countries are working to increase the share of renewables in their electricity mix but cannot yet rely on it, said Ahmed Al Jassar, the GCCIA chairman.
"This is the interest for all countries and the GCC countries are also interested," he said. "But it still cannot be used as a baseload."