Mohamed Al-Shaikh, BSc MSc CEng MIET Manager, Maintenance - GCCIA GCC Interconnection Authority The GCC Interconnection Grid 7th Power Transmission and Distribution Forum Kingdom of Bahrain Mohamed Al-Shaikh, BSc MSc CEng MIET Manager, Maintenance - GCCIA 28-30 October 2007

LEGAL AND ORGANIZATIONAL DEVELOPMENT GCC Interconnection Authority OVERVIEW INTRODUCTION PROJECT DESCRIPTION PROJECT STATUS LEGAL AND ORGANIZATIONAL DEVELOPMENT PROSPECTS CONCLUSIONS

Supply has to increase to match the anticipated demand. Interconnection Rationale Power Demand in GCC Countries is anticipated to increase from 32 GW in 2003 to 94 GW in 2028. Supply has to increase to match the anticipated demand. Considerable investment is required to build new generating capacities . The two common strategies: build capacities independently or interconnect individual systems. Economic analysis of the interconnection indicated a cost / benefit ration 1.77 )all six countries ( Reduces investment for power reserves by 3.5 billion US $ (2008- 2028) for the same reliability.

Benefits of the Interconnection Reduce generating capacity required in each system due to ability to share power reserves Share spinning reserves to cover emergency operating conditions Lower operating costs by using most economic generation unit in the interconnected system Improve the overall system reliability Provide emergency support to any system during black out situations Provide means for energy trading

Sharing of the Costs of the Interconnection Phase I (%) Phases I &III (%) Kuwait 33.8 26.7 Saudi Arabia (ERB) 40.0 31.6 Bahrain 11.4 9.0 Qatar 14.8 11.7 UAE 15.4 Oman 5.6 TOTAL 100.0

PROJECT DESCRIPTION

Geographical Map Substations HVDC Converter Control Center

Single-Line Block Diagram KUWAIT AL ZOUR 400 kV 1200 MW BAHRAIN 310 km AL FADHILI 400 kV SAUDI ARABIA SEC – ERB HDVC BACK-TO-BACK 112 km 90 km JASRA 400 kV 600 MW 1200 MW 100 km 290 km GHUNAN 400 kV QATAR DOHA SOUTH SUPER 400 kV SALWA 400 kV 150 km 900 MW 750 MW UAE SHUWAIHAT 400 kV EMIRATE NATIONAL GRID 400 MW OMAN OMAN NORTHERN GRID 52 km AL WASEET 220 kV AL OUHAH 220 kV

Contract Prices Contract Price Substations $221,983,888 HVDC BtB Conv. $205,896,785 Transmission Lines $280,400,717 Cables $343,122,125 Control Center $27,637,220 Consultancy $16,283,146 TOTAL $ 1,095,323,881

PROJECT STATUS

Al-Zour / Al-Fadhili T/L Al-Fadhili / Ghunan T/L Project Progress Contract No. Contract Actual Percentage (%) 112-A1 Al-Zour S/S 74.33 112-A6 Al-Jasra S/S 66.16 112-A7 Doha South S/S 81.08 112-A2 Al-Fadhili S/S 93.42 112-A4 Ghunan & R.A.Q. S/S 41.74 112-A5 Salwa S/S 74.4 113-A3 Al-Fadhili B2B 51.84 114-B1 Al-Zour / Al-Fadhili T/L 41.06 114-B4 Salwa / Doha South T/L 50.98 114-B2 Al-Fadhili / Ghunan T/L 81.62 114-B3 R.A.Q. / Ghunan / Salwa T/L 28.14 115-B5 Land & Submarine Cable 10.66 116-C Control Systems 64.09 Overall Progress 41.34

Project Status Completed the Submarine Cable Route Survey between Kingdoms of Bahrain and Saudi Arabia Geo-Technical study of the Land Cable in the Kingdom of Bahrain Final stages of the engineering work

Submarine Cable Route

Project Status Foundation work is in progress Al Jasra Doha South Final stages of the engineering work

Project Status Al-Fadhili Converter No. 2 & 3 – Control Building & Valve Hall constructions in progress Final stages of the engineering work

Project Status Salwa to Doha South – Tower Auguring of Foundation Al-Zour to Al-Fadhili – Hoisting of Insulators String Salwa to Doha South – Tower Auguring of Foundation Final stages of the engineering work

Project Status ICC – Reinforcement of Bar for Roof Beams & Slab Construction of the roof of the ICC building is in-progress ICC – Reinforcement of Bar for Roof Beams & Slab Final stages of the engineering work

LEGAL & ORGANIZATIONAL DEVELOPMENTS

The Legal Structure / Framework for GCCIA Legal Framework Organizational Framework GCC Ministerial Committee General Agreement E & W Ministerial Committee Level Regulatory Advisory Committee General Assembly & Board Level Articles / Bylaws GCCIA Board of Directors Planning Committee Operating Committee PETA GCC Utilities Level GCCIA - CEO Transmission & Metering Codes

Legal Agreements General Agreement (GA) Interconnector Transmission Code (ITC) Power Exchange & Trading Agreement (PETA) High level agreement between the Member States setting out the rules and regulations in respect of the inteconnector as well as defining the Regulatory Committee and the regulatory principles. Agreement between the Trading parties setting out the technical provisions which the Authority, the TSO Parties and the Procurement Parties will observe when operating and using the Interconnector . Agreement between the Trading parties setting out obligations in respect of installed capacities and operating reserves as well as Terms applicable to connection, use of interconnector, and Trading.

PROSPECTS

Development of the Electricity Market Provide a Wheeling Services to the power sectors in the GCC countries Becomes a ‘Launch-Pad’ for Energy Trading Provide access to the Electricity Market in the region and beyond

Opportunities for the GCC Electricity Market UCTE East EJLIST Arab Maghreb GCC

Opportunities for the Authority Utilize the OPGW fiber optic excess capacity Authority may lease out fibers Market is being explored

The work progress shows about 41 % accomplishment as on September 2007 Conclusions The Interconnector will provide economic benefits and support in emergency situations The Interconnector’s connection points rated equivalent to the loss of 50% of the largest power plant for each country The work progress shows about 41 % accomplishment as on September 2007 The Interconnector’s legal and organisational frame work is in the process of being finalised The GCC Grid will be a fundamental step that can lead to a regional electricity market The Interconnector Provides an opportunity for capitalizing in fiber optic excess capacity

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