Energy swap will power and empower the GCC: paper

ABU DHABI: A UAE paper has said that the GCC-wide energy deal expected to be introduced early next year will do more than just provide a way to trade power, as needed, among the Gulf countries.

“When the deal is signed in January, it will also open the way for negotiations for closer collaboration in the energy sector and beyond,” said The National in its editorial on Thursday.

The key part of the agreement is an innovative payment structure for electricity trading between the member states. This energy-for-energy system will help eliminate the effect of the varying subsidies, price calculations and electricity tariffs across the region. These stand in the way of efficient deals to share electricity generation. This scheme will also help address the region’s increasing consumption rates – between 6 and 10 per cent a year – and improve both connectivity and collaboration.

The paper quoted Ahmed Al-Ebrahim, the chief operating officer at the GCC Interconnection Authority, as saying that the energy sector is a good place to start if the ultimate goal is greater economic integration between the GCC countries. The Gulf Cooperation Council Countries Interconnection Grid (GCCIG) initiative linking the six countries, for example, is useful during emergencies. If it is made permanent, it will save countries more than $6 billion, the equivalent of an 8-gigawatt increase in capacity.