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Transmission Developments in 2017: Round up of key events across the globe [free access]

January 8, 2018

The year 2017 ended with several highs for the global power transmission sector.  The focus was on introducing transparency, competition and efficiency in the power transmission market, boosting research and development (R&D) of new transmission and energy storage technologies and enhancing regional integration. The year also witnessed several high-value merger and acquisition (M&A) deals in almost all continents.

 

North America

In North America, the key focus during 2017 was on the adoption of competitive solicitation for awarding transmission projects, initiatives by states to streamline transmission project development, undertaking transmission-related R&D activities and boosting energy storage technologies. 

 

The US regulators continued to focus on introducing transparency, competition and efficiency in the power market, in line with the Federal Energy Regulatory Commission’s (FERC) Order No. 1000. Various regional transmission oragnisations (RTOs)/independent system operators (ISOs) are working towards implementing a competitive solicitation process to award transmission projects. In October 2017, New York Independent System Operator’s (NYISO) Board of Directors selected NextEra Energy’s 345 kV Empire State Line Proposal 1 in response to the solicitation issued by NYISO in November 2015 to improve the transmission network of western New York. Under its recent Transmission Expansion Plan for 2017 (MTEP17), Midcontinent Independent System Operator (MISO) plans to offer the 500 kV West of the Atchafalaya Basin (WOTAB) Economic Project through competitive bidding, likely to be held post February 2018.

 

Also, the Massachusetts Department of Energy Resources (DOER) received various generation and transmission project proposals in response to its second Clean Energy request for proposal (RfP) in July 2017. Power transmission proposals include the New England Clean Energy Connect, Maine Clean Power Connection, Granite State Power Link, Northeast Renewable Link, New England Clean Power Link, Atlantic Link, Northern Pass, and Maine Power Express (MPX) Project. The State DOER is expected to announce the list of selected projects by January 25, 2018.

 

Various state regulators or RTOs/ISOs are also working towards streamlining transmission project development. For instance, House Bill (HB) 1766 of Virginia's House of Delegates will allow utilities to avoid local zoning and planning restrictions for substations and other associated facilities; the Senate Bill (SB) 692 of California’s Senate Energy, Utilities and Communications requires the California Independent System Operator (CAISO) to assign transmission access charge (TAC) to only those who use the grid and not to customers who generate their own power; and the HB 788 of Public Utility Commission (PUC) of Texas will allow funding for improving electric grid security for a large part of the state.

 

Various efforts were also made to boost energy storage technologies, and R&D activities in the USA. In January 2017, FERC issued a new rule called ‘Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators’. The new rule will allow distributed energy resources (DERs), including batteries, solar panels and energy demand management software, to compete in wholesale power markets in order to help push the US energy markets to adopt power storage systems at a faster pace.

 

Furthermore, various R&D initiatives were adopted or announced during the year. These include the agreement between National Grid USA and the Department of Energy’s (DoE) Pacific Northwest National Laboratory to work together in the areas of transmission grid modernisation and energy storage technologies; and DoE’s USD30 million Advanced Research Projects Agency-Energy (ARPA-E) funding programme for the development of innovative electric power converters. In addition, regulators in California and Texas are focusing on the adoption of battery storage projects.

 

During the year, several grid investment programmes were announced by RTO/ISOs and private players, involving an investment over USD10 billion over the next few years. This includes the USD2.7 billion MTEP17 of MISO, transmission projects worth USD1 billion approved by PJM Interconnection, transmission line rebuild projects worth USD440 million approved by New York regulators, and CAISO’s USD24 million 2016-17 Transmission Plan. Private players’ key investment announcements include the USD246.7 million Freeport Master Plan Project of CenterPoint Energy; the USD3.5 billion 2017 Integrated Resource Plan (IRP) of Rocky Mountain Power, a unit of PacifiCorp; and the USD2.2 billion investment plan of FirstEnergy Corporation.

 

Besides, several projects received regulatory approvals at various levels during 2017. Key developments on this front include the Presidential permit by DoE and US Army Corps of Engineers (USACE), and approval by Canada's National Energy Board (NEB) for ITC’s Lake Erie Connector Project; the Presidential permit by DoE for the Northern Pass project; Arizona Corporation Commission’s (ACC) approval for the Nogales Interconnection Project and the Nogales Tap to Kantor Upgrade Project; and the US Forest Service’s (USFS) record of decision (RoD) for the TransWest Express Transmission Project. In April 2017, PJM’s Board of Directors lifted the suspension of the Artificial Island transmission line project, and recommended modifications in the project.

 

Several projects were completed during 2017 including the CAD1.6 billion Maritime Link Project in Newfoundland, Canada; the Merrimack Valley Reliability Project (MVRP) in Massachusetts and New Hampshire, US; the Churchill Falls–Muskrat Falls or the Labrador Transmission Assets project in Newfoundland and Labrador, Canada; the Labrador Island Transmission Link project in Newfoundland and Labrador, Canada; the CAD142.5 million Northumberland Strait Submarine Transmission System Project in Prince Edward Island  (PEI), Canada; and the Stegall–Scottsbluff transmission project in Nebraska, US.

 

The year witnessed market consolidation with several M&A deals being approved or proposed. These include Washington-based Avista Corporation’s acquisition of Toronto-based Hydro One Limited (Hydro One); GridLiance Holdco LP’s (GridLiance) acquisition of Nevada-based Valley Electric Association’s (VEA) high voltage transmission system; the asset swapping deal of Oncor Electric Delivery Company LLC (Oncor) and Sharyland Utilities, L.P. (Sharyland or Sharyland Utilities) and its subsidiary; Idaho-based POWER Engineers Incorporated’s acquisition of Kansas City-based Sega Incorporated; and FortisOntario Incorporated’s (FortisOntario) acquisition of Renewable Energy Systems Canada Inc. (RES) shares in the Wataynikaneyap Transmission Project. However, Energy Future Holdings Corporation (EFH) is still struggling to receive approval from PUC of Texas to sell off its stake in Oncor.

 

In the North America region, efforts are also being made to modernise Puerto Rico’s electric grid, which was devastated following Hurricane Maria on September 20, 2017. The Puerto Rico Electric Power Authority (PREPA) and USACE are the lead agencies overseeing the rebuilding of Puerto Rico’s electric grid.

 

Other developments of 2017 include the newly elected US government’s plan to sell off publicly-owned transmission lines, such as those owned by Bonneville Power Administration (BPA). Reportedly, selling the BPA transmission assets could save the government about USD4.9 billion over a decade by leasing out its power lines, towers and substations, and rights-of-way (RoW) to the private sector, as well as relieving long-term pressures on the future federal capital investment. However, this proposal was rejected by the US House Budget Committee in August 2017, as it is likely to undermine BPA’s ability to coordinate transmission and power marketing functions in the Pacific Northwest.

 

Latin America

The Latin American power transmission sector witnessed many firsts in 2017—the region’s first 800 kV high voltage direct current (HVDC) transmission line become operational; Brazil’s transmission sector witnessed an upswing with the award of over BR21 billion in transmission projects; Mexico issued tender rules for its first-ever private transmission project; and Argentina’s new government launched the private-public partnership (PPP) programme to boost investment in power transmission.  All these developments had a common underlying theme—the timely and cost-effective development and expansion of the region’s power transmission sector.

 

The Brazilian transmission sector took centre stage during the year with several big developments. The first transmission line associated with the 11.2 GW Belo Monte power complex—the 800 kV HVDC Xingu–Estreito line—was energised by State Grid Brazil Holding (SGBH). The line increased the region’s highest operating voltage from 765 kV to 800 kV. To promote development of ultra high voltage (UHV) technology, a UHV laboratory was inaugurated in late 2017 in Brazil.

 

Two transmission auctions held during the year, based on the new rules issued by energy regulator Agencia Nacional de Energia Eletrica (ANEEL) in 2016, were able to attract investments worth BRL21.4 billion for projects involving around 12,000 km of line length. The auction also saw the entry of several new players, including India’s Sterlite Power Grid Ventures Limited and Construtora Quebec.

 

Where new players marked their entry, established players announced exits or stake sale plans. The limited financial capability of these companies along with significant devaluation of the domestic currency forced electricity companies to announce divestment plans. Incumbent state-owned energy entity Centrais Eletricas Brasileiras SA (Eletrobras) announced the sale of its stake in its special purpose entities (SPEs) and distribution companies to reduce debt, while Companhia Energética de Minas Gerais (Cemig) was looking to sell assets worth BRL6.5 billion to reduce its debt. China’s Shanghai Electric signed an agreement with Eletrobras subsidiary Eletrosul Centrais Elétricas S.A. (Eletrosul) to acquire the Rio Grande do Sul transmission system development project. Also, Companhia de Transmissão de Energia Elétrica Paulista (CTEEP)—a Brazil-based subsidiary of Colombia’s Interconexion Electrica (ISA)—acquired the entire equity interest of Interligação Elétrica Norte e Nordeste (IENNE) from Spain’s Isolux and local power company Construções e Participações S.A (Cymi Holding). ANEEL is also looking to resell transmission concessions of Spain-based firms Abengoa and Isolux Corsán, which are undergoing restructuring following their bankruptcy announcements. Also, Brazil-based electric utilities Neoenergia SA and Elektro Holdings SA, both units of Spain’s Iberdrola, underwent a merger creating the biggest electricity utility in Brazil.

 

During the year, the Mexican government announced several rules and programmes, mainly aimed at restructuring the power sector, boosting investment and private participation, and modernising its high voltage network. Mexico’s Secretaría de Energía (SENER) or Ministry of Energy issued the country’s first Market Rules to allow for efficient operation of the electricity market. It also published guidelines for Financial Transmission Rights (FTR) Auctions to govern the auction process for the newly created FTR market. Later in the year, it issued pre-bidding rules for the tender to develop the Baja California– Sistema Interconectado Nacional (SIN) Interconnection project, the first transmission project to be developed based on the new contracting model under Ley de la Industria Eléctrica or Electric Industry Law, which allows private participation in developing the project. The government launched the Programa de Redes Eléctricas Inteligentes (REI) or Programme of Intelligent Electrical Networks, which targets the creation of a smart energy transmission and distribution grid in the country.

 

The new Argentine government continued to work towards improving the country’s economic and financial landscape by introducing policies and regulations to promote local and foreign investment. Following the passing of the PPP law in November 2016, PPP regulations were issued in February 2017. Under the PPP programme, eight power transmission projects involving the construction of around 3,000 km of high voltage lines will be developed. The tenders for these are expected to be awarded in the first quarter of 2018.

 

In 2017, a major landmark project was completed in Chile. The Sistema Interconectado del Norte Grande (SING)–Sistema Interconectado Central (SIC) interconnection project linking the regions of Antofagasta and Atacama was put into operation by Transmisora Eléctrica del Norte (TEN), a joint venture between France’s energy group Engie SA through Engie Energia Chile, and Red Eléctrica Internacional (REI) through its local branch Red Eléctrica Chile. Later in the year, the newly established system operator Coordinador Eléctrico Nacional (CEN) launched tenders for national and zonal projects under the approved transmission expansion programme for 2017-18. Under this, the operator plans to execute 16 projects, valued at over USD390 million, in the national transmission system, and 98 projects, valued at over USD760 million, in the zonal transmission system. Another highlight of the year was the sale of a 27.8 per cent share in Chile’s largest pure-play power transmission company Transelec by parent Canada-based Brookfield Infrastructure to China Southern Power Grid International Company Limited.

 

Other Latin American countries such as Colombia and Peru also witnessed M&A moves during the year. Colombia’s Energia de Bogota S.A. E.S.P. (EEB) sold its entire 1.63 per cent share in Colombia’s Interconexion Eléctrica S.A. (ISA). Spain’s Red Electrica de Espana (REE) acquired a 45 per cent share of Peru’s electricity transmission network developer Red Eléctrica del Sur, S.A. (Redesur) from an infrastructure investment fund managed by AC Capitales, making REE the sole owner of Redesur.

 

Smaller Latin American countries such as Paraguay, Bolivia and Ecuador continued to receive financial aid to ensure grid expansion kept pace with growing energy needs. Paraguay’s Administración Nacional de Electricidad (ANDE) received USD150 million from the Corporación Andina de Fomento (CAF) for the Electricity Transmission and Distribution System of the Metropolitan System of Paraguay Improvement - Phase II project; Bolivia’s Central Bank released funds for Empresa Nacional de Electricidad’s (ENDE) two 230 kV projects—the Southern Energy Ring Project and the Bélgica–Los Troncos transmission line; and the Inter-American Development Bank (IaDB) approved a USD150 million loan to Ecuador for implementing its energy matrix transmission programme, which aims to expand, strengthen and improve the electrical system’s operational efficiency, and a USD81 million loan to Italy’s Terna for the 500 kV Melo–Tacuarembó transmission line project in Uruguay.

 

Asia Pacific

During 2017, the major focus in many countries was on undertaking significant moves and policy initiatives to reform the transmission network; strengthening grid network through widespread expansion works; implementing regional interconnections to boost electricity trade; and increasing private investments.

 

With the aim of reforming its transmission sector, Nepal passed a law to establish an independent regulatory body, Nepal Electricity Regulatory Commission (NERC). In addition, it is looking to involve private participation to expedite the expansion of its transmission sector, which so far is controlled by the state-owned Nepal Electricity Authority. Kazakhstan adopted a law to consolidate its regional power transmission companies. Meanwhile, the Chinese government proposed the extension of its transmission and distribution (T&D) pricing reform to cross-regional transmission lines connecting provincial grids to further liberalise its power market and promote electricity trade across different regions.

 

In order to protect domestic players, the Indian government is expected to soon adopt a new policy to insulate the Indian power transmission sector from investments from foreign countries, especially China, which does not allow investments from Indian entities in similar projects. Likewise, the National Transmission and Despatch Company (NTDC) Limited has also mandated the use of type-tested power equipment in all its tender documents to stop the supply of sub-standard material in the power sector projects by Chinese contractors.

 

Several Asian countries announced ambitious projects and plans with a focus on smart and newer technology. The Laos government plans to construct 54 electricity transmission lines and 16 substations by 2020. Myanmar plans to construct 66 kV and 33 kV substations and transmission lines as part of a five-year electrification plan (2017-18 to 2021-22) aimed to provide electricity connectivity to new towns and regions. Pakistan also plans to upgrade and extend existing substations, modify transmissions towers and lines, and construct new substation involving a USD550 million investment, of which the World Bank will provide financing of USD425 million. In addition, New Zealand has proposed to develop a progressive programme to remove old transmission towers and replace existing overhead transmission lines with underground cables.

 

To boost the deployment of newer and smarter technologies, India’s grid developer Power Grid Corporation of India Limited (POWERGRID) and United Arab Emirates’ (UAE) state-owned Abu Dhabi Water & Electricity Authority (ADWEA) signed a memorandum of understanding (MoU) for cooperation in areas like smart grid, transmission technology and distribution. Likewise, South Korea’s Korea Electric Power Corporation (KEPCO) is expected to spend about KRW100 billion to develop research-related Internet of Things (IoT) solutions to help predict potential failures and reduce downtime in its power grids. To improve durability of its national power grid, state-owned Taiwan Power Company plans to increase the number of electrical circuits on transmission towers instead of building new lines. Thailand’s Provincial Electricity Authority (PEA) has plans to modernise its power transmission and transformation network through smart grid technology by adopting several methods such as customised network migration tools, dual-domain bridging technology, and reused network management and equipment.

 

Regional grid integration projects in South Asia received a major boost with the Indian government’s approval to sign an MoU for the establishment of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Grid Interconnection. BIMSTEC is an international organisation involving a group of countries including Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal from South Asia and South East Asia. Developments, such as re-alignment of the route, pertaining to the long proposed India–Sri Lanka undersea interconnection project took place during the past year. Also, work on the 400 kV cross-border Butwal (India)–Gorakhpur (Nepal) transmission link was expedited. Nepal is also looking to sign an MoU with China for the joint development of the 400 kV Rasuwagadhi (Nepal)–Kyirong (Tibet) cross-border transmission link between the two countries. China Southern Power Grid (CSG) and the Cambodian government signed an MoU to promote grid interconnection and power trade. In Central Asia, Russia has expressed interest in investing in the Central Asia South Asia 1000 (CASA 1000) transmission line, which aims to facilitate electricity trade between Tajikistan, the Kyrgyz Republic, Afghanistan and Pakistan. Meanwhile, Japan-based SoftBank Group Corporation undertook works to implement the Asian Super Grid (ASG) project across six countries in Asia, namely, Mongolia, India, Japan, China, Russia and South Korea.

 

During 2017, the 2,370-km-long, ±800 kV Jiuquan–Hunan ultra high voltage direct current (UHV DC) transmission line was commissioned in China. Also, the 1,100 kV Changji–Guquan and 500 kV New Sichuan Ziyang–Chongqing Tongliang UHV DC line projects were under construction. In Pakistan, three 660 kV HVDC projects—Matiari–Lahore, Port Qasim–Faisalabad and Thar–Lahore—are in various stages of development. Meanwhile, the ±800 kV Champa–Kurukshetra, ±800 kV Raigarh–Pugalur and ±320 kV Pugalur–North Trichur lines made steady progress in India.

 

The past year was also witness to several M&A deals. In a major consolidation move, India’s private grid operator Adani Transmission Limited (ATL) acquired the grid assets of Reliance Infrastructure Limited (RInfra), aggregating 3,100 circuit km of high voltage lines at an enterprise value of INR10 billion. In addition, in December 2017, RInfra signed a definitive binding agreement with Adani ATL for 100 per cent stake sale of its integrated power business of generation, transmission and distribution in the Mumbai area. Adani is also looking to take over Spain’s debt-laden industrial operator Isolux Corsan’s Indian assets of South East UP Power Transmission Company Limited (SEUPPTCL), comprising 1,500 km of lines. Meanwhile, Swiss-Swedish ABB is in discussion with India’s Larsen & Toubro (L&T) to acquire its electrical and automation division.

 

Countries like Nepal, India and the Philippines have witnessed significant delays during the year in the completion of major projects due to right-of-way (RoW) issues. Philippines National Transmission Corporation (TransCo) has signed an agreement with Land Registration Authority (LRA) to identify and acquire all titled properties that lie within the right-of-way (RoW) corridor of 12,679 km of existing transmission facilities at PHP38,500 per km.

 

Europe

During 2017, the focus of developments in the European transmission segment remained on building an integrated common European market to ensure security of supply and increase the share of green energy. The three Baltic States, namely, Estonia, Latvia and Lithuania, agreed to synchronise their electricity transmission systems with Western Europe via Poland, opening the door for renewable energy produced in Baltic States. Alongside, transmission system operators (TSOs) of Ukraine and Moldova worked together to pave the way for the synchronisation of their energy systems with the European Network of Transmission System Operators (ENTSO-E).

 

Various interconnection projects achieved significant milestones during the year. The third 200-km-long, 400 kV Finland–Sweden alternate current (AC) interconnector was included in the European Commission’s (EC) Projects of Common Interest (PCI) list. Serbia's power system operator Elektromreza Srbije (EMS) started operating the Serbian section of the 131-km-long, 400 kV AC, double-circuit overhead line (OHL) to Romania. The United Kingdom (UK) Marine Management Organisation (MMO) approved the 1 GW Interconnexion France-Angleterre (IFA2) HVDC link with France.

 

In addition, several interconnection projects received financial aid from European and foreign agencies.  The EU, the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the World Bank announced a EUR270 million package to finance the 400 kV interconnection project between Moldova and Romania. The EIB granted funding worth EUR130 million to Italy’s Terna Energy Group for the Piedmont–Savoy link between France and Italy.  The year also witnessed Ireland’s TSO EirGrid Plc and France’s TSO Reseau de Transport d'Electricite (RTE) receiving EUR4 million from the EC for the Celtic Interconnector project between the two countries, among others.

 

Meanwhile, in April 2017, the EC, under its Connecting Europe Facility (CEF), announced funding worth EUR800 million for projects in the areas of electricity, gas and smart grid infrastructure. The list of selected projects is expected to be communicated in early 2018. Earlier in November 2017, the EC published its third list of PCIs comprising 173 projects.

 

In parallel to the financial aids, works for several cross-border projects were initiated. MMT, the Sweden-based marine survey company, started an offshore geophysical survey for the 2 GW Aquind interconnector project between the UK and France. Britain’s TSO National Grid started cable installation works for the UK’s part of the 1 GW Nemo Link, a subsea interconnector between the UK and Belgium. Netherlands-based grid developer TenneT started the construction of the 700 MW Copenhagen–Brussels–Amsterdam (COBRA) interconnector between the Netherlands and Denmark.  

 

In the recent past, European TSOs have been progressively investing in cross-border energy ties. This trend is expected to continue in the years to come. According to cybersecurity experts, an interconnected system is just as robust as the weakest part of it. Besides, the Ukraine power grid attack in 2015 demonstrated the potential impact of cyber attacks on the electricity subsector. With this background, in February 2017, the EC published a new report titled ‘Cyber Security in the Energy Sector–Recommendations for the European Commission on a European Strategic Framework and Potential Future Legislative Acts for the Energy Sector’. The report identifies areas where there is a need for appropriate actions to improve cybersecurity and manage related risks for energy infrastructure. Later in June 2017 this matter was also taken up by the ENTSO-E, which signed an MoU with the European Network for Cyber Security (ENCS) to develop state-of-the-art cybersecurity regulation, practices and standards for the electricity transmission system.

 

With regard to offshore projects, the development of wind energy sources continues to remain a priority for European countries. The North Sea countries are undertaking several offshore projects to boost the development of offshore wind energy and achieve their renewable energy targets.

Alongside, steady progress was made on several projects being developed to link offshore wind farms to mainland grids. In November 2017, Belgium’s Elia System Operator SA inaugurated the 380 kV Stevin project, which will enable the transfer of electricity generated from new offshore wind farms to the mainland grid. Earlier in July 2017, the 900 MW DolWin3 offshore project reached a major milestone with the successful installation of the DolWin3 offshore converter station in the south-western German North Sea, approximately 80 km from land. In the same period, TenneT Holding BV of the Netherlands and Denmark’s energy group DONG Energy signed a grid connection agreement for the wind farm Borssele 1 and 2 off the coast of the Dutch province Zeeland.

 

Apart from this, UK’s offshore transmission owner (OFTO) regime  also witnessed a significant development with Britain’s energy market regulator Office of Gas and Electricity Markets (Ofgem) appointing Transmission Capital Partners as the preferred OFTO of the high voltage transmission link at the 402 MW Dudgeon offshore wind farm off the Norfolk coast of the UK. In addition, Ofgem shortlisted the bidders for the 336 MW Galloper, 580 MW Race Bank, 400 MW Rampion, and 660 MW Walney extension offshore wind farms.

 

Ofgem has plans to replicate the success of the OFTO regime through the Competitively Appointed Transmission Owner (CATO) regime, initiated in 2015. However, CATO experienced a small setback due to legislative delays resulting from Brexit. With CATO not an option for the time being, the regulator put forward two alternative models, namely, the Special Purpose Vehicle (SPV) model and the Competition Proxy model, in November 2017. According to Ofgem, both these models are expected to deliver potential savings of around GBP30-GBP120 million.

 

Middle East and Africa

The Middle East countries continued to focus on modernising and strengthening their power grids, including deployment of smart and new technologies. The creation of cross-border links and regional power markets was the common theme for the African nations during 2017. Another highlight was the push by regional financial donors and agencies as well as development authorities to open the domestic transmission sectors to private players, so as to fast-track the region’s grid development.

 

In the United Arab Emirates (UAE), utilities of various emirates worked on the expansion of their respective networks. Dubai Electricity and Water Authority (DEWA) allocated AED65 billion towards Dubai’s energy sector over the next five years, including construction of three 400 kV substations with a budget of AED1 billion. The utility also announced plans to double its electric vehicle (EV) charging stations to 200 across Dubai to complete the second phase of the Green Charger initiative. Meanwhile, Abu Dhabi Transmission and Despatch Company (TRANSCO) launched projects aggregating USD98 million to expand the power grid and water infrastructure of UAE’s capital city and the northern region. Sharjah Electricity and Water Authority (SEWA) proposed the construction of three 132 kV and five 33 kV stations during 2017. Also, SEWA successfully replaced more than 70 km of overhead transmission lines with underground power cables to achieve safety, security and protection of the assets from extreme weather conditions. Federal Electricity and Water Authority (FEWA) announced plans to invest AED95 million in grid expansion, including construction of 132/11 kV substations and 132 kV cables in the new Ajman area.

 

Oman undertook the economic and technical study for the North-South Interconnector Project, which will connect the power grid in north Oman with that of the Dhofar Governorate in the south of the country. It will help link the main interconnected system (MIS), covering much of the northern half of Oman, with the Dhofar Power System (DPS), which supplies electricity to Salalah and other areas of the Dhofar Governorate. Meanwhile, work on Qatar Power Transmission System Expansion Plan-Phase 13 made steady progress with state-owned Qatar General Electricity & Water Corporation (KAHRAMAA) awarding various engineering, procurement and construction (EPC) contracts. Phase 13 involves the laying of 400 kV (36 km), 220 kV (47.5 km), 132 kV (285.8 km) and 66 kV (84 km) extra high voltage (EHV) cables and construction of 77 substations across various locations in Qatar, along with the upgrade of some existing substations.

 

The Kingdom of Saudi Arabia announced that it was planning to transform its electricity sector, which relies partially on government subsidies, to an independent commercial sector. Under this, the electricity industry will be restructured by separating the activities and dividing them among several specialised companies in the fields of power generation, transmission, distribution and service provision.

 

Little progress was made on the Egypt–Saudi Arabia HVDC project, with the contract award process being postponed several times during the year. However, cross-border projects in Africa made significant progress, with several receiving donor aid and construction works beginning on another few. The African Development Bank (AfDB) approved USD84 million in funds for the Guinea–Mali link and USD35 million for the 330 kV Zimbabwe–Zambia–Botswana–Namibia (ZiZaBoNa) project. Meanwhile, NEPAD-Infrastructure Project Preparation Facility (IPPF) approved USD3.88 million in grants for the completion of preparation works for the Kolwezi (Democratic Republic of Congo)–Solwezi (Zambia) and Zambia–Mozambique link.  

 

During the year, eastern Africa’s first ±500 kV HVDC cross-border project between Ethiopia and Kenya made good progress, with the completion of around 50 per cent of the works in Ethiopia. After delays due to land compensation issues, work on the 225 kV Bolgatanga (Ghana)–Ouagadougou (Burkina Faso) connection was also resumed. Also, construction of the 225 kV Cote d'Ivoire–Liberia–Sierra Leone–Guinea (CLSG) Interconnection Project was initiated in June 2017.

 

During the year tenders for undertaking an environmental and social impact assessment (ESIA) study for the Cameroon–Chad and 400 kV Mozambique–Zambia transmission interconnections, as well as for undertaking the feasibility study for the Kolwezi–Solwezi Power interconnector between the Democratic Republic of Congo (DRC) and Zambia were launched. Also, Nigeria initiated the ESIA for the second 330 kV Nigeria–Benin link. Further, Uganda and the DRC signed a preliminary agreement to build a 350-km-long transmission line to connect both countries.

 

Around USD1.6 million in funding was made available through loans and grants by multilateral donor agencies to fund domestic grid expansion plans in Africa. The World Bank was the biggest donor with around USD880 million in funds extended to Nigeria (USD406 million), Mozambique (USD150 million) and Ivory Coast (USD325 million). AfDB approved funds worth USD660 million, including USD474 million (ZAR6 billion) to South Africa’s Eskom, USD80 million for Ethiopia’s transmission and distribution project, USD45 million for Mozambique’s Dondo substation and a USD42 million grant for Liberia’s energy efficiency project. Meanwhile, the European Commission granted USD70.2 million (EUR65 million) for Zambia’s Lusaka Transmission and Distribution Rehabilitation Project.

 

Kenya energised the country’s first 400 kV line during 2017. The Suswa–Isinya–Rabai (Athi River) line, initially charged at 220 kV, will evacuate up to 150 MW of geothermal power from plants in Olkaria to Kenya’s coastal region. However, the country faced delays in the completion of the stalled Loiyangalani–Suswa power line associated with the Lake Turkana Wind Power (LTWP) project. Meanwhile, Nigeria contracted three China-based companies to construct the 3,050 MW Mambilla hydropower project (HPP) and associated transmission lines. Also, Siemens was appointed to modernise converter transformers for Mozambique’s HVDC link while ABB was selected to upgrade the Inga–Kolwezi HVDC link in DRC.

 

In June 2017, the World Bank released a report highlighting the need to increase private sector investment in the transmission infrastructure of the under-developed electricity sector in Africa. The World Bank estimated that annual investments required to expand the transmission network range from USD3.2 billion to USD4.3 billion during the 2015-2040 period. With limited financial capacities of the governments, private participation will be critical to help achieve the objective of delivering cost-effective power to populations. Kenya is expected to be one of the first countries to experiment with private participation, with four projects involving 540 km of line length identified to be developed through the private route.