Gulf states close in on regional power grid deal

Gulf Arab states are expected to sign an agreement on the development of a regional electricity grid and a power trading system.

Yousef Janahi, chairman of the Gulf Cooperation Council (GCC) interconnection authority said that electricity ministers from the six Gulf states will meet in Qatar to finalize the agreement on the grid in early November.

The first phase of the project, which will begin operating in early 2009, will have a capacity of 1200 MW and cost $1.6bn. It will connect Kuwait, Saudi Arabia, Bahrain and Qatar.

Janahi said: “Overall, 80 per cent of the project work is completed. Work has already started on phase two and our target for full project completion is 2010.

“Interconnection will provide bilateral, multilateral or international power trading. With rising demand for power across the region, the GCC grid will help in getting supply during emergencies.” He added that the new grid will allow surplus energy to be sold.

Moody’s investor service said the Gulf could experience increasingly frequent power shortages and blackouts as utilities struggle to respond to sharply rising demand for power.

Investment of $50bn will be needed to put 60 GW of extra capacity in place by 2015.

Alstom seals deal for Seversk nuclear plant turbine packages

Alstom Atomenergomash has contracted with Atomenergoproekt to engineer the turbine generator package and turbine hall equipment for the Seversk nuclear power plant, due to be built in the Tomsk region of Siberia. Atomenergoproekt is part of Russian nuclear energy state corporation Rosatom.

The 2400 MW Seversk project is expected to be completed by 2010 as part of the AES-2006 project, in compliance with Russia’s federal target programme. The turbines produced in this joint venture will be based on Alstom’s Arabelle technology. They will also be supplied to nuclear power plants outside Russia that use Russian nuclear reactor technology.

Qatar considers nuclear option

Qatar is considering adding up to 5400 MW of nuclear capacity to its energy generating system between 2011 and 2036, according to a recent Moody’s report.

Qatar plans to more than double its present installed generating capacity to cope with rising demand, partly from huge energy construction projects. With the majority of new plants to be built by 2015 expected to be gas fired, current feedstock arrangements may not be sufficient to meet additional future demand.

Russian grid firms seek state investment aid

Russia’s power grid companies want to increase their investment levels by 18 per cent to 909.4bn roubles ($34.50bn), but are appealing for state help.

One of the largest companies, MOESK, would like to switch to a new pricing scheme that will allow it to make up a severe shortage of cash. The company needs 370bn roubles to finance its plans up to 2012, but is 104bn roubles short, according to MRSK Holding, which controls the inter-regional grid companies.

Russia’s power lines are in urgent need of repair, as part of a $1trn infrastructure renewal plan, without which Russia’s economy is likely to stall.

The inter-regional grid firms say they must switch to a new pricing system if they are to make a reasonable return on their investments. Without the switch, the firms will remain unprofitable, disappointing local and foreign investors who have pumped billions of dollars into the companies.

Moscow has reservations over the scheme, as it will raise electricity tariffs and could push rampant inflation higher still.

Gulf states may need $35bn for power projects

Gulf Arab countries face an acute challenge in meeting rising demand for electricity as they press ahead with an unprecedented construction spree. Encouraged by high oil revenues, governments in the region have launched massive infrastructure projects in recent years.

The power sector in the Gulf Cooperation Council could need more than $35bn in financing over the next ten years, according to a Moody’s report. Bahrain, Kuwait, Oman Qatar, Saudi Arabia and the UAE are expected to spend $50bn by 2015 to boost generation capacity by nearly 60 000 MW.

Middle East’s largest solar panel plant unveiled

The largest solar photovoltaic manufacturing plant in the Middle East will be set up in Dubai’s Technopark, under plans unveiled recently by Dubai World chairman Sultan bin Sulayem.

Plant construction will begin in November, and production in 2010. Green building legislation is being implemented in the UAE as part of Dubai’s plan to pioneer sustainable development.

The plant, run by Solar Technologies FZE, will produce solar panels as large as 5.7 square metres.

Bahrain: Ireland’s ESB International was the sole bidder for Bahrain’s Electricity and Water Authority’s tender for a 400 kV transmission network consultancy contract.


Bahrain: South Korea’s Hyundai Heavy Industries has won a $1.7bn deal to build a power and desalination plant in Bahrain. The plant will generate 1245 MW of power and produce 213 m litres of water a day.

Kenya: A power plant will be constructed at Rabai at the cost of Sh12bn ($150m). The diesel powered plant will add 90 MW of capacity to the national grid. The project will be built by an independent power producer by 2009.

Kenya: The Kenyan government has, for the second time in three months, invited investors interested in setting up nuclear reactors to address the country’s current power shortage. However, some experts question whether the country has the technical and financial capacity to run a nuclear energy programme.

Saudi Arabia: UK based Hayward Tyler Group has been awarded a contract to supply nine boiler circulation pumps for the Shoaiba power plant in Saudi Arabia. The company said the contract is worth “several million dollars”.

Saudi Arabia: Saudi Arabia’s minister of electricity and water, Abdullah Al Hussain, has said that he expects investment in the country’s power sector to reach Dh195.5bn ($53.3bn) by 2015, as the number of consumers rises from the current 5.2 million to 7 million.

Turkey: Vestas has received an order for the supply and installation of five wind turbines for installation at the Ayyildiz project in Balikesir province. The Ayyildiz plant is expected to save the environment from almost 25 000 tonnes of CO2 emissions.

UAE: Emirates Nuclear Energy Corp has awarded US-based CH2M a ten-year contract to manage the UAE’s planned civilian nuclear power programme. The UAE is considering developing nuclear energy to satisfy rising demand for electricity as its economy booms.

Uganda: Norpak Power, a Norwegian power firm that has shown an interest in building the Karuma hydro-power project, has pulled out of the deal after a protracted conflict with the World Bank.

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