“Introduction: The Effect of Subsidies on

Power Trade in GCC ”

Ahmed Al-Ebrahim Chief Executive Officer (CEO) - GCCIA

Reforming Subsidies for

Electricity Markets in the GCC

17th December 2015 Yas Viceroy, Abu Dhabi

Our Journey Continues ………

2010 Promoting the idea of power

trading in GCC

2013 Identified Obstacles facing

Power Trading and way forward

2014 Presented world

wide experience

Fundamentals (1): Low prices for oil

& gas is a long-term perspective

Challenge: Limited ability for GCC to continue with

subsidies - (A growing burden on GCC economies)

GCC paying more than $160 billion on energy

subsidies annually

Opportunity: With lower oil prices it is easier to deal

with the subsidies

Fundamentals (2): Climate change

and Paris Agreement perspective

No more sentiment to fossil fuels – fuel

subsidies in growing contradiction to the Paris

agreement

Energy efficiency on the top of the agenda –

only market prices can encourage people to

save on energy

Fundamentals (3): Energy Sector

– Field of Technology Revolution

Renewable energy can compete in GCC while

fuels not subsidized (not to repeat mistakes

done by others where RES subsidized)

Chances to quickly develop new market

segments – market of reserves, demand

response, energy storage market, distributed

energy markets etc.

Fundamentals (4): Common GCC

Market - Important decision of

the last GCC Summit

Creating GCC Power Market: Market can be

created with some subsidies still in place, but

only on consumer level (to support families,

low income and vulnerable sectors)

Only regional market can develop enough

liquidity to become competitive and properly

allocate social welfare of GCC people

Possible Next Steps for GCC Power Sector ??

GENERATION TRANSMISSION DISTRIBUTIONSUPPLY

SALES

CU

STO

MER

CO

NN

EC

TIO

NNatural MonopoliesFuel

Subsidies

Tariffs

Subsidies

Thank You

GCC Interconnection Authoritywww.gccia.com.sa

Interconnecting our world

Eng. Ahmed Ali Al-EbrahimChief Executive Officer