RIYADH, 12 July 2005 — The six-nation Gulf Cooperation Council (GCC) will begin the construction work on the first phase of the multi-billion riyal GCC power grid in September. When finished, it will interconnect Saudi Arabia, Kuwait, Bahrain and Qatar. “These four Gulf states will be interconnected by the year 2008; the whole grid project will be completed by 2010,” said a statement released by the GCC Secretariat here Sunday.
The huge power-grid linkage project will save the Gulf states billions of dollars, as it will reduce the cost of generating power. “The Kingdom’s appointment of a panel to supervise the GCC power grid project was the final step toward project implementation, and that means a big step forward for economic integration throughout the Gulf region,’ said the statement. The GCC Power Grid Authority, made up of representatives from all Gulf countries, is based in Dammam.
The move to set up a central power grid is significant because the cost of linking the GCC power grids will be less than setting up multiple power generation plants in the region. The project will ensure regular power supply to the thousands of industrial units operating in the Gulf countries, thus helping to boost their productivity. This project will also allow GCC countries to sell their surplus power to one another.
The project will also address the problems of power shortage because electricity consumption is surging in the Gulf states. In Saudi Arabia alone, the total number of electricity subscribers exceeds 3.4 million. More than 7,100 cities and villages in Saudi Arabia have so far been provided electricity. The Kingdom’s power requirement is growing at a rate of 5.5 percent annually. The Kingdom will still need to invest SR140 billion within the next twenty years to cope with an increase in power consumption.
Referring to the power grid project, the statement said: “Upon the completion of phase one, the total cost savings rate of return after four years from operations could be $2.5 billion.” “The intent was also to enable a wide participation by international contractors in the implementation of the GCC project in an efficient and economic manner”, said the statement. It said that bidders were pre-qualified for the different parts of the project in the first quarter of 2004.