Arab countries to sign electricity trading agreement in Cairo next week

Arab countries will sign an agreement in Cairo next week to pave the way for power trading between the GCC and the broader Middle East and North Africa region.

One of the most important agenda items at an Arab ministerial meeting in the Egyptian capital will be the signing of the pan-Arab electricity market agreement, “which will set in motion the possibility of trading between the GCC and [other] Arab countries”, Ahmed Al Ebrahim, chief executive of the GCC Interconnection Authority, told The National during the RAK Energy Summit in Ras Al Khaimah.

Mr Al Ebrahim also said an electricity interconnection project linking Iraq with the GCC grid is expected to start operations in 2025.

“We're planning to start exporting electricity to Iraq next year. We are having our discussions with the Iraqi side on all the agreements and all the details,” he said.

“That will be a good start for the GCC countries now with the energy transition, on how to utilise the excess capacity coming from renewables to sell to other regions who are in need.”

The GCC, comprising Bahrain, the UAE, Kuwait, Saudi Arabia, Qatar and Oman, commissioned a study in 1986 on the idea of connecting electricity grids across the Middle East.

Subsequent studies laid out a road map and in 2001, the GCCIA was formed. By 2011, all GCC countries were connected, with the exception of Oman, which was linked up the following year.

A project to connect Saudi Arabia with Egypt undertaken by the Saudi Electricity Company is in an “advanced stage” and may be completed next year or in 2026, Mr Al Ebrahim said. It would allow for 3,000 megawatts of electricity to be exchanged between the two countries.

Asked if the GCC would be the main power supplier to a pan-Arab grid, Mr Al Ebrahim said it would depend on availability and pricing. "It's not always one side selling to the other side but it's dynamic, depending on the potential in the market," he said.

"We in the GCC have very similar peak times [and] connecting with other regions like Egypt ... will [result in] a window of opportunity to export and maybe sometimes import."

By connecting a number of grids, a failure in one region can be mitigated by drawing power from others, reducing the likelihood of widespread blackouts.

Countries such as Lebanon, Egypt and Iraq have been facing severe and prolonged power cuts due to ageing infrastructure, fuel shortages and surging demand during the summer.

The agreement will be signed against the backdrop of soaring geopolitical tension in the Middle East, which have severely affected some economies and raised questions about the feasibility of certain long-term infrastructure projects involving countries from the region.

However, there is a strong "political will" in the GCC to establish an interconnected power grid, Mr Al Ebrahim said.

"We have all the support we need from the GCC and the Arab world," he added. "Most of the Arab countries are also supporting it, especially Egypt, Jordan, Morocco and some of the others."

The long-term vision is to have an interconnected global power grid, which will enable electricity to be generated in any region, such as Asia, Africa or Europe, and then transmitted to areas of high demand, the official said.

For instance, India and the UAE are in "serious discussions" to link their electricity grids, Mr Al Ebrahim said, without providing further details.

Last year, Indian media reported that the world's most populous country was considering linking its power grid to those of Saudi Arabia and the Emirates through undersea cables.