Interlinking the Arab Gulf : Opportunities and Challenges of GCC Electricity Market Cooperation
Interlinking the Arab Gulf : Opportunities and Challenges of GCC Electricity Market Cooperation / Laura El-Katiri. Oxford Institute for Energy Studies, July 2011, 48 p. (EL 8)
On 20 April 2011, the UAE along with other members of the Gulf Cooperation Council (GCC) celebrated the inauguration of the country’s link to the GCC Interconnection Grid, a vast high-voltage system that now interlinks five of the six GCC countries’ national electricity networks. The event marks an important further step in the project’s history of more than thirty years of planning, negotiation and implementation, and follows the grid’s inauguration in July 2009, when Bahrain, Kuwait, Qatar and Saudi Arabia first “plugged in” to one another. The only link left for completion is now the link between the UAE and Oman, which is planned for 2013. This paper explores the economic and political significance of the GCC Interconnection for the region. Currently, the regional power grid serves only as a back-up mechanism supplying electricity-short countries with ad hoc supplies of electricity. In the long term, however, the grid has the potential to become effectively a tool for commercial electricity trade between the GCC states and hence to help create a regional electricity market, leading also to far greater economic integration, provided the GCC proceed with their domestic utility sector reform agenda.