The GCC Interconnection Authority (GCCIA), Gulf Cooperation Council (GCC) countries and Iraq's Ministry of Electricity convened in Dhahran to discuss the frameworks for energy purchase deals to be signed between the parties. 

 

The aim of the GCCIA is to facilitate and coordinate energy trade operations with Iraq, with the project focused on exporting energy from GCC countries to Iraq through a new connection linking southern Iraq to the Gulf power grid. This initiative will open the door for energy trading with neighbouring countries, starting with Iraq.

 

Talks between GCCIA and Iraq regarding coordinated electricity purchases began after the launch of the GCC-Iraq electrical interconnection project, which started in 2023. This project will enable Iraq to diversify its sources of energy supply and benefit from the new and renewable energy sources being developed in the Arab region.

 

New horizons

Eng Ahmed Ali Al Ebrahim, CEO of GCCIA, emphasised that the project linking the Gulf electricity market with Iraq will open new horizons for the Gulf power grid, adding that the project is expected to generate between $300 million to $400 million annually from energy trade, with a capacity exceeding 4 million megawatt-hours per year. This will mark a major leap for GCC countries in creating a competitive electricity market and will also provide Iraq with competitively priced electricity.

 

Eng Al Ebrahim continued, stating that according to scenarios outlined for 2025, Iraq could import around 3.94 terawatt-hours annually from the GCC at prices lower than local production costs, leading to reduced public expenditures.

 

He also clarified that this is the first phase of the interconnection with Iraq, noting that the GCC's future vision includes reaching regional markets. To this end, there is an ongoing connection between Saudi Arabia and Egypt, expected to be completed within a year or two. All these projects will lead to interconnected regional electricity markets and the establishment of an Arab regional electricity market that aligns with the visions of all GCC and Arab countries.

 

Eng Al Ebrahim further highlighted the significant role of renewable energy, noting the substantial developments in activities and projects led by the GCCIA in this sector. He pointed out that global grid interconnections are crucial for achieving the objectives and ambitions of various countries, as interconnections reduce the negative impacts of certain renewable energy sources, especially in terms of fluctuations. He noted that one of the most important upcoming projects for the GCCIA is to diversify energy products, provide ancillary services, and balance the market—not just increase energy trade. The goal is to stimulate the market for future energy products.

 

Diversifying energy sources

Eng Ali Zuhair Karim, Head of Electricity Transmission in Southern Iraq at the Ministry of Electricity and Renewable Energy of Iraq, revealed that Iraq is committed to diversifying its energy sources, particularly through international connections with neighboring countries. He indicated that the Iraqi government is keen on completing the GCC interconnection, "given its importance in supplying southern Iraq in the initial phase, with the goal of achieving self-sufficiency and subsequently connecting with other regions in Iraq, as well as with Turkey and Europe in the future, due to the significant variation in energy demand between summer and winter seasons."

 

Eng Karim explained: "The demand for energy in hot regions like the Gulf states and Iraq peaks during the summer season, while these areas experience a significant surplus in winter and mild weather conditions, unlike the demand patterns in Europe and Turkey." He highlighted the potential to establish an energy market between these countries, which would generate economic benefits and mutual gains for Iraq and GCC countries, thereby enhancing integration and connectivity between Iraq and the GCC, in pursuit of their mutual interests and paving the way for further cooperation in the future.--TradeArabia News Service