Dear Subscriber,

We are pleased to release an interview with Mr. Adnan Al-Mohaisen, General Manager, Gulf Cooperation Council Interconnection Authority, (GCCIA), and Saudi Arabia.

Mr. Al-Mohaisen graduated from King Saud University in Riyadh, Saudi Arabia in 1976 with a bachelor’s degree in Electrical Engineering. Upon graduation he was among the first to be hired in the Royal Commission for Jubail & Yanbu. Thereon he worked in various positions and in 1980 managed to attain, by scholarship, a Masters degree in Electrical Engineering (Power Systems) from the University of Missouri in 1981. During the 29 years that he was with the Royal Commission for Jubail & Yanbu, Mr. Al-Mohaisen held three senior positions of Deputy Director General in Planning & Projects, Community Services and Public Service areas. In late 2004, Mr. Al-Mohaisen was nominated to become General Manager for the GCC Interconnection Authority in which he took the position in January 2005. Mr. Al-Mohaisen has also headed and participated in various committees in the Royal Commission and other public organisations. Mr. Al-Mohaisen has also participated in management and career development courses from various reputable universities, such as the University of Chicago, the University of Southern California and the University of New South Wales in Australia.

Mr. Adnan Al-Mohaisen was interviewed by DMS’ Saudi Arabia editor, Mr. Abdul Naeem.

Thank you for spending time with DMS

It is a pleasure meeting you and I would like to thank you for your interest in the GCC Interconnection Authority.

How did the idea of GCCIA originate?

Back in 1981 the Gulf Cooperation Council was formed with set goals and strategies. Part of those goals are focused on interlinking the infrastructure networks among the GCC states, especially in the field of electricity, transportation and communication. In 1982 several ministries in the GCC countries began forming committees to discuss the interlinking of the power grids in the six states. Studies were then conducted at the Kuwait Science Institute and the King Fahad University of Petroleum and Minerals and in 1990 a consortium of international consultants conducted a feasibility study to address the technical and economic benefits of interconnection. The study results were taken to be feasible from a technical and economic perspective and as a result the GCC Interconnection Authority was formally established in 2001, by royal decree, with its head quarters in Dammam, Saudi Arabia. In 2003, another study was conducted as an update to the previous 1990 study. As a result the leaders of the six GCC countries during the GCC submit in Kuwait in May 2004 gave the go ahead for the construction of the interconnection project which is to be fully financed by the Gulf States.

What were the initial difficulties you faced?

The initial difficulties that were faced were the delays in implementing the project due to the regional conflicts that occurred at the beginning of the 1980s and as a result the project was postponed until 2004.

What is the financial structure of GCCIA?

It is a joint stock company owned by the six states. Each state has a percentage of ownership. The authorised share capital of the Authority is fixed at US$ one thousand one hundred million (US $ 1,100,000,000) divided into one million one hundred thousand (1,100,000) shares of US $ one thousand each.

How will the GCCIA Project benefit the Gulf member countries?

On the completion of the project the interconnection would reduce the generation reserves, provide power exchange and strengthen supply reliability. It will also improve the economic efficiency of the electricity power systems, strengthen operational efficiency and promote utilities to construct larger generation units to share extra generated power. This in turn will provide opportunities for industrial customers and utilities to shop around for more attractive supply of power.

Last summer there was an acute shortage of power in the Gulf States. How would the project benefit the states?

Yes, we have seen this in recent years, especially during 2006. This problem will continue until the private sector will participate in constructing more IPP’s and IWPP’s.

What would be the magnitude of the potential trading between the countries?

Once in operation the capacity of the interconnection will be 1440 MW however the maximum power to be exchanged will 1200 MW.

How would GCCIA deal with the issue that there are different laws regarding buyers and regulators in the different countries?

The GCC is currently engaged in developing the legal agreements pertaining to the electrical interconnection. The legal agreement will consist of a shareholders agreement; a power exchange and trading agreement and the transmission code. The shareholders agreement will be responsible for addressing the agreement between the shareholders, hence the six countries. The power exchange and trading agreement will focus on the exchange of power between the countries and setting out the principles of trading electricity between the buyers and the sellers and GCCIA.

Will there ultimately be a definite director or regulator?

There is talk that in the future, as the market evolves that GCCIA may act as a regional regulator. This may be part of a long term plan however nothing official has been set.

There is a four-hour time difference between some of the countries in the Arab world. This would mean that the peak demand of electricity will vary at different times. In relation to this, how would the pricing be structured?

Nothing has been decided in this regard yet.

What are GCCIA’s plans for the future?

To engage in energy trade within the GCC region and abroad. Much interest has been given to interconnect to other grids such as the European, North African, Mediterranean power grids.

What future projects does GCCIA plan to implement or participate in?

Right now the GCCIA is seeking other means to utilise its billion dollar asset in various investments. The infrastructure consists of an OPGW fibre optic cable consisting of 48 fibres which can be leased out to telecom operators for their use. The Authority is also considering the possibility of constructing a multi-storey office complex and lease out the unwanted office space to other companies.