Cairo Sustainable Energy Week looks at Arab common electricity market

Discussion in Cairo follows recent agreements for Arab world power grids connection, experts say interconnection will stimulate private investment in renewable energy technologies with value in billions but expect economic and political challenges; 80% of networks required already exist

The second day at Cairo Sustainable Energy Week (CSEW), last week, put focus on the Arab Common Market for Electricity, after 13 Arab countries signed two agreements at the headquarters of the Arab League in Cairo earlier this month.

The League's Arab Ministerial Council for Electricity passed two agreements on the Joint Arab Electricity Market and its institutional framework. These include a General Agreement and a Market Agreement. The former includes objectives and internal regulations of the institutions and committees of the Arab Joint Electricity Market, while the latter is more detailed on how the parties will implement obligations specified and covers the commercial aspects of the joint market.

The 13 signatory countries are Egypt, Saudi Arabia, Jordan, Syria, Iraq, Lebanon, the UAE, Bahrain, Kuwait, Qatar, Yemen, Libya, and Mauritania.

Arab electricity network

Their significance was discussed in a talk titled “Arab Electricity Network” at CSEW, covering advantages and challenges of the Arab Common Market. The talk was moderated by Eng. Jamila Matar, Director, Energy Department, League of Arab States.

Participants stressed that the Arab Common Market would face challenges related to financing, legislation, and political differences, but they called on the concerned parties to work to overcome these obstacles and implement the provisions of the two agreements.

Ensuring energy security

Ms. Matar confirmed that it would not have been easy to reach the signing of the two Arab Common Market agreements without cooperation from partners, especially the World Bank, the United Nations Economic and Social Commission for Western Asia (ESCWA), and a number of other regional and global agencies.

“The Arab Common Market will achieve a number of goals, including reducing electricity costs, ensuring energy security, helping to reduce carbon emissions,” she said.

“The Arab Common Market will increase the share of renewable energy’s contribution to the energy mix to a percentage ranging between 16-28% of installed capacity by 2035, compared to only 1.4% in 2018,” she added.

Matar also highlighted that electrical interconnection between Arab countries will stimulate private investment in renewable energy technologies with a value ranging between $64 to $305 billion.

However, she pointed out that activating the two Arab Common Market agreements still faces a major obstacle in the form of lack of political stability suitable for attracting investment.

Framework for electricity exchange

Dr. Mohamed Farhat, Senior Consulting Engineer at the Arab Fund for Economic and Social Development, explained that the Arab Common Market will organize the energy exchange process between Arab countries on a large scale.

But he expected it to face economic and political challenges.

“I hope that the political differences will be overcome because the economic perspective is broader and more comprehensive, and the Arab electricity ministers have indeed succeeded in separating the political aspects from the economic aspects,” he said.

He stressed that 80% of the networks required for electrical interconnection already exist, and the Arab Fund is ready to finance the necessary studies to overcome the technical challenges that may face electrical interconnection projects between Arab countries.

Gulf interconnection network

“Signing the two Arab Common Market agreements will represent a real beginning for effective Arab cooperation in the electricity sector,“ said Dr. Nasser Al-Shahrani, Chief Operating Officer of the Gulf Cooperation Council Interconnection Authority.

He highlighted the electrical interconnection project of the Gulf Cooperation Council countries, pointing out that it has succeeded in avoiding power outages in local networks while improving the quality of electricity services in the six Gulf countries and providing support in emergency situations.

Al-Shahrani explained that the Gulf interconnection network has succeeded in saving $27 billion in fossil fuel consumption in the electricity sector, in addition to its contribution to reducing carbon emissions.

He revealed that the electrical interconnection project between Saudi Arabia and Iraq will begin by the end of 2024.

Expansion of renewable energy

Dr. Najib Dandashi, Executive Committee Member of the Regional Center for Renewable Energy and Energy Efficiency (RCREEE) also participated in the session. He praised the success of the Gulf interconnection network in overcoming challenges in terms of financing, legislation and technical issues.

He expected that the implementation of the Arab Common Market would face a number of obstacles, especially in the ability of electricity networks to absorb the new capacities, but he expressed his optimism about the success of the Arab experience in the electricity sector.

Dandashi also pointed out that electrical interconnection projects will stimulate the expansion of renewable energy projects at the regional level and will ensure the preservation of energy security and reliability.

Energy & Utilities has reported on funding for a Saudi-Egypt electricity interconnection. E&U has also reported on Jordan's multiple projects for power links with neighboring countries.