GCC member states are expected to approve contracts that will enable bilateral power trading agreements using the GCC Interconnector by the end of February.

The agreements have been finalised and sent to member states for their approval. The GCC Interconnection Authority (GCCIA) expects to receive approval by the end of February and send them out to utilities in March, an official at the GCCIA tells MEED.

Since the GCC North section of the electricity grid opened in July 2009, the system has provided additional spinning reserve to the connected member states of Kuwait, Saudi Arabia, Qatar and Bahrain. The final section of the grid to connect the northern network with the southern network of the UAE and Oman will be constructed this year.

At the same time the GCCIA has been developing a trading framework with the UK law firm Norton Rose and US economic consultant National Economic Research Associates (NERA). This will enable states to choose to supply electricity on a long or short term basis, rather than its current use in emergency situations.

In line with international electricity trading, the GCCIA will act as the regulator and manage the flows of electricity through the network once two states negotiate a deal. It is understood that the agreements will cover the way that buyers and sellers interact, including whether buyers and sellers should be left to talk directly or whether the GCCIA should act as an intermediary to enable transactions.

Pricing will also be part of the trading agreements and the GCCIA is working on a tariff study along with developing its business plan. In the long term, the authority is working on opening of the network to the private sector.