GCC Interconnection AuthorityInterconnecting Our World

3rd Power Trade Forum

Beyond the GCC Beyond the GCC Power Market 2015-2020

Establishing The Interconnection

2005-2011

Initiating a GCC Power

2010-2015

Initiating a GCC Power Market

2010-2015

�Platform to facilitate power trade

opportunities (EMMS)

�Workshops and training to raise

awareness of the issues and benefits of

power trade.power trade.

�Visits to policy makers to get their views

and support for power trade initiatives.

�Policy changes to promote power

trading through the Interconnector

(White paper).

�Regional forums to address issues that relate

to promoting power trading.1st Forum on Power Trade Dec 2010

Power Power MarketMarket initiation Road initiation Road mapmap

Interconnecter

YES

• Auctioning

• Grid Security

• Fine tune NTC

calculation

• Tarriff structure

• EMMS

• Automated

system

• Sophisticated

tarriff models

• …2a

3 FULL MARKET

IMPLEMENTATION

Needs drivenby limitedcapacity

congested ?

Tradingpartners

?

Shareholders only

NO

• Time-2-market focus

• Processes

• People nominations

and authorizations

• Simple tools

• Decide on NTC

• Automation

• Settlement

• Tarriff

structure

Shareholders +

others (IPP, PP

etc)

1PETA process 1.0 « INCUBATION » or « learn by doing »

2b

Needs drivenby tradingparties

500,000

600,000

700,000

800,000

900,000

0

100,000

200,000

300,000

400,000

500,000

20102011

20122013

308 46000

0

0

Unsceduled Exchanges

Traded Energy

�Absence of visibility and awareness ofelectricity costs and the benefits that can beachieved by power trading;

�Energy price distortion due to varying levels ofsubsidies in GCC countries;subsidies in GCC countries;

�Differences in national energy policies;

�Differences in local regulations towards cross-border power trading;

�Differences in national power sector structure;

�Low number of market participants.

GCC MSs National Markets Status

Bahrain Kuwait Qatar Saudi Arabia UAE Oman

Regulator No No No ECRA Bureau AER

Electricity Law No No Yes Yes Yes Yes

Transmission Grid Code

No No Yes Yes Yes Yes

Distribution Grid Code No No Yes Yes Yes Yes

Sector Structure/reform

Single Buyer

Partially

unbundling exists

Vertically

Integrated

Single Buyer

Partially unbundling

exists

Principle Buyer

Partially unbundling

exists

Single Buyer

Partially

unbundling exists

Single Buyer

Partially

unbundling exists

Subsidies Issue Yes Yes Yes Yes Yes YesSubsidies Issue Yes Yes Yes Yes Yes Yes

Authority to Trade Yes No Yes Need Permission Yes Yes

Price for Trade Not ready Not readyNeed update from

QP

Need declaration from Ministry of

EnergyAs per request

They prices based on

subsided fuel

Wheeling Charges GCCIA 5$ GCCIA 5$ GCCIA 5$ GCCIA 5$

UAE Summer = 34$ Winter = ? $GCCIA = 5$

UAE Summer = 34$ Winter = ? $GCCIA = 5$

Power Offered As per request Not DeclaredFull line capacityPrice up on Time and quantities

Not Declared As per requestNot Ready

successfullysuccessfully used used for stability and for stability and support in support in

Not used Not used for for economic gains economic gains through through support in support in

around around 1100 1100 incidentsincidents

through through economical economical trade of energytrade of energy

Utilization Factor around

8%

Value of Economic Gains that can be Value of Economic Gains that can be Value of Economic Gains that can be Value of Economic Gains that can be Value of Economic Gains that can be Value of Economic Gains that can be Value of Economic Gains that can be Value of Economic Gains that can be

Attained through Economic TradingAttained through Economic TradingAttained through Economic TradingAttained through Economic TradingAttained through Economic TradingAttained through Economic TradingAttained through Economic TradingAttained through Economic Trading

Optimal Energy Exchanges between the Member States

through the GCC interconnection leads to a global

reduction of operation and maintenance costs. The

corresponding Present Value of the Energy Exchanges

Revenues is of 1.8 Billion US$.Revenues is of 1.8 Billion US$.

Economic Energy Exchanges require:

development of a electricity market

Process through the GCC interconnection

Coordination of power production

between the Member States

8000

8500

9000

9500

10000

10500

11000

1:0

0

2:0

0

3:0

0

4:0

0

5:0

0

6:0

0

7:0

0

8:0

0

9:0

0

10:0

0

11:0

0

12:0

0

13:0

0

14:0

0

15:0

0

16:0

0

17:0

0

18:0

0

19:0

0

20:0

0

21:0

0

22:0

0

23:0

0

0:0

0

Demand (MW)

Time (Hrs)

KSA 4

4800

5000

5200

5400

5600

Demand (MW)

KUW Demand

1000

1100

1200

1300

1400

Demand (MW)

BA4

GCC Member

States Demand

During Winter

Time

4000

4200

4400

4600

1:0

0

2:0

0

3:0

0

4:0

0

5:0

0

6:0

0

7:0

0

8:0

0

9:0

0

10:0

0

11:0

0

12:0

0

13:0

0

14:0

0

15:0

0

16:0

0

17:0

0

18:0

0

19:0

0

20:0

0

21:0

0

22:0

0

23:0

0

0:0

0

Demand (MW)

Time (Hrs)

2000

2200

2400

2600

2800

3000

3200

3400

1:0

0

2:0

0

3:0

0

4:0

0

5:0

0

6:0

0

7:0

0

8:0

0

9:0

0

10:4

11:4

12:4

13:4

14:4

15:4

16:4

17:4

18:4

19:4

20:4

21:4

22:4

23:4

0:0

0

Demand (MW)

Time (Hrs)

QAT Demand

800

900

1000

1:0

0

2:0

0

3:0

0

4:0

0

5:0

0

6:0

0

7:0

0

8:0

0

9:0

0

10:0

0

11:0

0

12:0

0

13:0

0

14:0

0

15:0

0

16:0

0

17:0

0

18:0

0

19:0

0

20:0

0

21:0

0

22:0

0

23:0

0

0:0

0

Demand (MW)

Time (Hrs)

3600

3800

4000

4200

4400

4600

4800

5000

1:0

0

2:0

0

3:0

0

4:0

0

5:0

0

6:0

0

7:0

0

8:0

0

9:0

0

10:0

0

11:0

0

12:0

0

13:0

0

14:0

0

15:0

0

16:0

0

17:0

0

18:0

0

19:0

0

20:0

0

21:0

0

22:0

0

23:0

0

0:0

0

Demand (MW)

UAE Demand

Variation in the Fuel Mix

and Price

Trading Opportunities

in Winter to buy energyBelow is the variation in the marginal cost of generation during the winter

time period for the member states.

15

UAE QAT

Trading Opportunities

in Summer to buy energy

Shown below the variation in the marginal cost of generation during the

winter time period for the member states.

16

BAH KSA KUW

Comparison of Average

Marginal Costs

Economic Imports in a Peak day of High Season

Shown below the estimated energy to be imported from the GCCIA grid

base on the marginal cost of generation during the winter time period

for the member states.

Economic Exports in a Peak day of High Season

Shown below the estimated energy to be exported from the GCCIA grid

base on the marginal cost of generation during the winter time period

for the member states.

Exchange during the High Season

Phase I

Phase II

Phase III

Electricity Exchange Opportunity 2012-2030

Exchange

Consultant Results • The Consultant has estimated the total theoretical

benefit of both countries from economic electricity exchanges between Saudi Arabia and UAE-Abu Dhabi during the period 2012-2030 of about 2,935 MUSD or 154.5 MUSD/yr. considering a link utilization factor of 50% of NTC.

22

Electricity Exchange Opportunity 2012-2030

Exchange

Consultant Results

23

� The Consultant has estimated the total theoretical benefit of both countries from economic electricity exchanges between Saudi Arabia and Bahrain during the period 2012-2030 of about 2,024 MUSD or 106.5 MUSD/yr. considering a link utilization factor of 50% of NTC.

Electricity Exchange Opportunity 2012-2030

Exchange

Consultant Results

24

� The Consultant has estimated the total theoretical benefit of

both countries from economic electricity exchanges

between Saudi Arabia and Kuwait during the period 2012-

2030 of about 720 MUSD or 37.9 MUSD/yr. considering a

link utilization factor of 50% of NTC.

Electricity Exchange Opportunity 2012-2030

Exchange

Consultant Results

25

� The Consultant has estimated the total theoretical

benefit of both countries from economic electricity

exchanges between Saudi Arabia and Qatar during the

period 2012-2030 of about 3,448 MUSD or 181.5

MUSD/yr. considering a link utilization factor of 50% of

NTC.

Study

• Make a feasibility Study for capturing Power Trading opportunities between Member States

• Create a model where all MS’s agree to the proposed model and price structure.

• Reflect outcome of the study and the proposed Market model in the revision of the GA & PETA agreement.

GA & PETA

model in the revision of the GA & PETA agreement.

• MS to make any necessary adjustment to harmonize the market model proposed with their internal regulations.

Implement the market model

• All Member States and GCCIA shall work together to implement the proposed market model.