0
Evolution of the GCC(Gulf Cooperation Council)
Power Grid
by: Adnan Al-Mohaisen, GM, GCCIAS. Sud, V.P., SNC-Lavalin
ICF Congress, Chicago, October 2006
1
Evolution of the GCC Power Grid• Project background
• Evolution of power sectors in the GCC countries
• Characteristics of transmission in the GCC countries
• Demand growth
• The Interconnection Project
• Benefits of interconnection
• Components of the Interconnection Project
• Capital cost of the project (Phase I)
• Sharing of the costs and financing
• Implementation strategy and project schedule
• Future development of GCC power market
• Conclusions
GULF COOPERATION COUNCIL INTERCONNECTION AUTHORITY
2
Project Background
• Gulf Cooperation Council (GCC) between Kuwait, Saudi Arabia, Bahrain, Qatar, United Arab Emirates and Oman formed in 1981
• Recognized benefits of interconnection of electricity grids of the countries
• Initial study in mid-eighties
• Preliminary project definition study in 1990 confirmed technical, economic and financial feasibility, recommended formation of GCC Interconnection Authority
• GCCIA established in 1999
• Project technical, economic and financial feasibility updated in 2003/04
• Countries decided to self-finance project in 2004
• Project tendered and awarded in 2005
3
Evolution of the Power Sector in the GCC Countries
Privatization of Kahramaa under
study. Single Buyer Model
planned
UnderConside-
ration
YesSeparate generation co.
(QEWC)Kahramaa
responsible forT & D*
NoPartial
separation
Qatar
Yes
Yes
No
IPPsAllowed
Plans to privatizeelectricityNoUnbundling
under consideration
IndependentRegulator is
planned
YesBahrain
Private sector investment in
Generation
YesPartial
unbundling
YesPartial
separation
Saudi
Arabia
No reformsplanned
NoUnbundling not planned
NoYesKuwait
Reform EffortsSingle BuyerModel
Degree ofUnbundling
Independent Regulator
Vertically Integrated Structure
Country
* T and D means Transmission & Distribution
4
Evolution of the Power Sector in the GCC Countries (cont’d)
Laws in place to facilitate reform. Plans to privatize
T & D
Under studyYesSeparate G, T & DYesNoOMAN
Yes
No
No
No
No
IPPsAllowed
Reform in Abu
Dhabi
No reforms planned
No reforms planned
No reforms planned
No reforms planned
Yes
No
No
No
No
Separate G, T &
D*
No unbundling
No unbundling
No unbundling
No unbundling
No
No
No
No
No
No
Yes
Yes
Yes
Yes
UAE
ADWEA
DEWA
SEWA
FEWA
UWEC
Reform EffortsSingle BuyerModel
Degree ofUnbundling
IndependentRegulator
VerticallyIntegratedStructure
Country
* G, T and D means Generation, Transmission and Distribution
5
Characteristics of Transmission in theGCC Countries
220 kV50 HzOman
220 kV, 400 kV50 HzUAE
220 kV50 HzQatar
220 kV50 HzBahrain
230 kV, 380 kV60 HzSaudi Arabia
275 kV50 HzKuwait
Principal Transmission Voltages
Frequency
6
Demand Growth (MW)
93 7814 55829 3484 6494 98923 21027 0172028
71 7613 72322 3834 2123 64518 80018 9982020
49 2192 82414 3833 3872 32514 74511 5552010
44 9252 66212 7803 1842 07013 94510 2842008
32 7472 1609 1372 3081 5479 9107 6852003
TotalOmanUAEQatarBahrainSaudi Arabia*KuwaitYear
* Saudi Arabia demand supplied by SEC – ERB (represents about 38% of total load in Saudi Arabia)
7
Drivers of Demand Growth
• High oil and gas prices
• Fiscal surplus
• Increased public spending
• Attracting foreign investments
• Diversification
> Financial services
> Building industrial links
> Petrochemical industries
• Need for job creation
• Recent demand growth in region 7 to 14%
9
Benefits of the Interconnection Project
• Result in the requirement for a lower installed capacity in each of the systems (due to reserve
sharing) while still supplying the load with the same (or better) level of reliability
• Permits larger and more efficient generating units to be installed on the individual systems
• Enables systems to share operating (spinning) reserves so that each system can carry less spinning
reserve
• Enables interchange of energy between systems resulting in a lowering of total operating costs
• Permits assistance from neighboring systems to cope with unforeseen construction delays and
unexpected load growth
• Permits emergency assistance between systems to mitigate the effects of unforeseen contingencies
such as catastrophic multiple outages
10
Principle Issues that had to be Resolved
• Agreement and participation by six GCC countries
• Demonstration of feasibility
• Creation of the GCC Interconnection Authority
• Agreement on cost sharing and financing
11
Phase I Development Plans• Kuwait
• Saudi Arabia-ERB
• Bahrain
• Qatar
• Year of Interconnection 2008
Phase II Development PlansPhase II Development Plans
• UAE – Formation of Emirates National Grid
• Oman – Formation of Oman Northern Grid
Phase III Development PlansPhase III Development Plans
• UAE
• Oman
• Year of Interconnection 2010
12
Phase I of the Interconnection Project
• A double circuit 400 kV, 50 Hz line from Al Zour (Kuwait) to Al Fadhili (Saudi Arabia) and associated substations
• A back-to-back HVDC interconnection to the Saudi Arabia 380 kV, 60 Hz system at Fadhili
• A double circuit 400 kV, 50 Hz line from Fadhili to Ghunan (Saudi Arabia) and associated substations
• A double circuit 400 kV link, from Ghunan, comprising overhead lines and submarine and land cable link to Al Jasra (Bahrain) and associated substations
• A double circuit 400 kV, line from Ghunan to Salwa (Saudi Arabia) and associated substations
• A double circuit 400 kV, line from Salwa to Doha (Qatar) and associated substations
• A Control Centre located at Ghunan
13
Phase III of the Interconnection Project
• A double circuit 400 kV, line from Salwa (Saudi Arabia) to Shuwaihat (UAE) and associated
substations
• A double circuit 220 kV, line from Al Ouhah (UAE) to Al Wasset (Oman) and associated substations
• A single circuit 220 kV, line from Al Ouhah to Al Wasset and associated substations
14
Conceptual Diagram of the Interconnection System
BAHRAIN
U.A.E. EMIRATES NATIONAL
GRID AL OUHAH220kV220kV
AL FADHILI 400kV
JASRA 400kVJASRA 400kVGHUNAN
400 kV 600MW
SALWA400kV
SALWA400kV
QATAR
750MW
90km90km
DOHA SOUTH SUPER 400kVDOHA SOUTH SUPER 400kV
288km
200km
SHUWAIHAT400kV400kV
900MW OMAN
OMAN NORTHERNGRIDAL WASSET
220 kV
400MW
52km
114km
97km
KUWAIT AL ZOUR
400kVAL ZOUR
400kV
292km
1200 MW SAUDI ARABIA
SEC-ERBHVDC
BACK-TO-BACK 1200MW
15
Simplified Single-Line Diagram of the Interconnection
G8
LEGEND
Note: All Substations are GIS, 1-1/2 Breaker Scheme
3 x 650 MVA
Umm An Na-S
an
Island
Ras Al-Q
urayya
h
Substati
on
Qatari 132 kVNetwork
Doha SouthSubstation
97 km
Projected Phase III(Shuwaihat UAE)
SalwaSubstation
Qatari 220 kVNetwork (4 circuits)
Doha south(Qatar)1 x 125 MVAR
3 x 400 MVA
400 kV
2 x 150 MVA
220 kV
4 x 125 MVAR
400 kV
AL-FADHILI SUBSTATION(KSA)
288 km
GhunanSubstation
GCCIAControl Centre
114 km
4 x 125 MVARAl Jasra
Substation3 x 325 MVA
42.5 km (Submarine Cable)40 km
400 kV
2 x 125 MVAR +2 x 300 MVAR
Bahraini 220 kVNetwork (2 circuits)
400 kV
SEC-ERB 380 kVNetwork (7 Circuits)
Al-FadhiliSubstation
292 km
Al-ZourSubstation
3 x 600 MW400 kV, 50 Hz
2 x 125 MVAR 2 x 125 MVAR
Back-to-BackConverter Facility
2 x 125 MVAR
400 kV
Al Jasra(Bahrain)
Bahraini66 kVNetwork
2 x 150 MVA
220 kV
SEC-ERB 220 kVNetwork
4 x 750 MVA
380 kV, 60 Hz
Shunt Reactor
Power Transformerwith OLTC
HVDC Converter
Overhead LineUnderground CableSubmarine Cable
AL-ZOUR POWER STATION(KUWAIT)
G1 G2
2500 MW
Kuwaiti 275 kVnetwork (6 Circuits)
275 kV
16
Principal Components of Phase I
• Six GIS substations
• 830 km of 400 kV transmission line
• Two - 50 km of 400 kV submarine and land cables
• 3 x 600 MW HVDC back-to-back converter facility
• Control, protection & SCADA and telecommunication system
17
400 kV Overhead Transmission Lines
Conductor: 740 MCM, AAAC, Flint
4 conductors / phase
Total length ≈ 19,500 km
Ground Wire: 2 OPGW
Total length ≈ 1,700 km
21
Capital Cost of the Project (Phase I)
1079Total
28Control, Protection & SCADA and Telecommunication System
343Submarine and Land Cables
206HVDC Back-to-Back Converter
280400 kV Overhead Transmission Lines
222GIS Substations
M$US
22
Cost Sharing Options Considered
• Peak load
• Installed capacity
• Interconnection capacity
• Capital investments on service territory
• Reserve capacity savings
• Reserve investment savings
• O&M savings
• Investment and O&M savings
• Present value of reserve capacity savings
23
Sharing of the Costs of the Interconnection Project
100.0100.0Total
5.6Oman
15.4UAE
11.714.8Qatar
9.011.4Bahrain
31.640.0Saudi Arabia (ERB)
26.733.8Kuwait
Phases I &III (%)Phase I (%)
24
Financing Options Considered
50%25%25%50%50%5
65%17.5%17.5%50%50%4
65%35%--100%--3
65%--35%--100%2
----100%--100%1
Private SectorGovernment
LoansCapitalPrivate SectorGovernment
Sources of FinanceOwnershipFinance Options
25
Implementation Strategy
GCCIA
Contract Package 1 Contract Package 2 Contract Package ..n
Owner’s Engineer
Contract Administration Contract Supervision& Coordination
Functional Relationships
26
Contract Packages
• Six – 400 kV Substations
• One – HVDC Converter Station Package
• Four – Overhead Transmission Line Packages
• One – Submarine / Land Cable Package
• Control Centre Package
> GCC Control Centre
> Telecommunications, Control & Protection
27
Project Schedule
Early 2009Project Operation
November 2005Contracts Awarded
September 2005Tenders Evaluated and Recommendation for Award
June 2005Tenders Received
February 2005Issue of Tender Documents
May 2004Approval of Project Financing
2003 / 2004Update Technical and Economic Feasibility
28
Future Development of the GCC Power Market
• Once the GCC Grid is in place this will enable the GCC electricity market to develop in a step-by-
step manner:
> Allow competition in generation in the countries through IPPs and set up a single buyer
> Establish vertical separation to enhance competition
> Establish open access to transmission to allow generators to sell to other countries
> Form a national and ultimately regional power market
• Link to other regional grids
29
Evolution of the Market from Single Buyer to a Wholesale Market
Wholesale MarketMandatory Pool
Single Buyer
Single Buyer with
Generation Pool
Hybrid Market(Bilateral Trading)Central Purchaser
Wholesale MarketVoluntary Pool
30
Conclusions
• Project under-study since mid-eighties
• Agreement and participation required by six GCC countries
• Principal Issues that had to be resolved
> Demonstration of feasibility
> Agreement between countries
> Creation of the GCC Interconnection Authority
> Agreement on cost sharing and financing
• Project is now under implementation
• Once implemented the Project will enable development of a GCC Electricity Market