Saudi Arabia and its fellow Arab states in the Gulf Cooperation Council may produce enough electricity in the next five years to be able to export the surplus, according to the agency managing the regional grid. The GCC Interconnection Authority is seeking to set up a common market for power after Oman became the last of the group’s six members to connect with the network late last year, said Ahmed al-Ebrahim, director of operations at the Khobar-based agency in Saudi Arabia.
GCC members currently exchange power only in emergencies, and sales elsewhere in the Middle East would require them to agree first on a uniform price for selling electricity to the grid, he said in an interview in Riyadh.
“The main obstacle for creating the market is the tariff, as electricity is heavily subsidized in all member countries of the GCC,” Ebrahim said.
“Once we reach an agreement on the tariff, we can have the market launching,” he said, estimating this may take as long as five years.
Transmissions of electricity between nations in the Gulf only became possible in 2009, when a grid connected Qatar with Kuwait, Saudi Arabia and Bahrain. The United Arab Emirates joined in April 2011, followed by Oman. The network may prove to be a step toward a formal market for trading power in the Gulf such as the one that has operated for more than a decade in Europe.
The market would enable independent power producers, including those using renewable sources, to export for a profit to countries such as Egypt and Turkey, Ebrahim said. Electricity buyers and suppliers in the Gulf generally don’t disclose wholesale prices.
Power trading among GCC members surged last year to 45,939 megawatt-hours from 308 megawatt-hours in 2010, he said. He expects trading to decline this year from 2011 as more countries add generating capacity.
GCC states have a combined installed generating capacity of 60,000 to 70,000 megawatts, the official said.