The Gujarat coast could soon link up to the Middle East with deep sea cables, creating a renewable energy grid as India and Saudi Arabia explore a cross-country project borne on the tide of a new era of energy diplomacy, said people with knowledge of the matter.
This will be part of the discussion agenda when Saudi energy minister Prince Abdulaziz bin Salman visits New Delhi on a day-long visit on Friday to prepare the ground for Saudi Prime Minister and Crown Prince Mohammed bin Salman visits New Delhi on a day-long visit on Friday to prepare the ground for Saudi Prime Minister and Crown Prince Mohammed bin Salman’s trip to India next month.
Taking the conversation beyond oil exports, sources in the know said both sides are likely to initiate discussions on an undersea cable for an electricity grid involving South Asia and the Gulf countries. The two are exploring the commercial viability of such a project.
Abu Dhabi may Also Join
If India agrees, the Abu Dhabi government could also join the ambitious project, the capital costs of which may be anywhere between $15 billion and $18 billion, as per industry estimates. However, these numbers are not final, cautioned the people cited above.
The Saudi ambassador to India has already extended invitations to leading conglomerates such as the Tata Group, Reliance Industries Ltd, JSW, Sterlite Power, and Adani among others for their views. India will be the first stop for the crown prince on a trip that takes him to Indonesia, South Korea and Japan.
The distance between the Gujarat coast (Mundra Port) to the emirate of Fujairah across the Arabian Sea is 1,600 km. Alternatively, the cable could also go via Oman (1,200 km), with the deepest point being 3.5 km. According to people with knowledge of the matter, petroleum and natural gas officials conducted a feasibility study three years ago, but only now is the project moving, with Prime Minister Narendra Modi pushing the International Solar Alliance.
“The plan is to have bi-directional flow of power in 15-minute blocks,” said the CEO of a power transmission company on condition of anonymity. “Interconnections will solve the intermittency issue associated with wind or solar energy.”
According to industry experts, a 3GW undersea project would involve capital expenditure of $5 billion, which includes the cost of cables (copper or aluminium), installation ships and terminals at two ends, but anything below 10 GW will be sub-scale.
The external affairs ministry, Tata, RIL and Adani didn’t respond to queries. JSW declined comment.
“India and Saudi are similarly placed–young population and among the fastest growing economies,” said Anshuman Mishra, member, Future Investment Initiative of the Saudi Public Investment Fund (PIF). “A handshake between the booming Gulf and vibrant India is going to help bring Prime Minister Modi and Crown Prince of Saudi into the global centre stage. While the kingdom needs aluminium, steel, construction materials, India is hungry for cheap oil and in future cheaper electricity.”
Energy Diplomacy
Several countries are connecting continents via electric cables for power. As oil and gas prices surge, Europe is facing an energy crisis. Russia was the largest supplier of oil and gas to the bloc in 2021, providing around 40% of total energy needs. But after the invasion of Ukraine and the imposition of sanctions, energy prices have surged, leaving some nations unsure of supplies this winter.
The UK and Norway swap hydro and offshore wind energy across an 800 km undersea cable. Greece is embarking on one of Europe’s most ambitious energy projects by linking up its electricity grid with that of Egypt. An underwater cable will carry 3,000 MW of electricity—enough to power up to 450,000 households—and will run from northern Egypt directly to Attica in Greece. The project is being undertaken by the Copelouzos Group.
The GREGY interconnection, set to cost €3.5 billion, has been deemed a Project of Common Interest (PCI) by the European Union, signifying it to be a key priority for interconnecting the European Union’s energy system infrastructure. It will carry clean electricity produced in Egypt and other African countries through underwater cables via wind and solar parks. The total length of the project is 1,373km. Egypt has already completed interconnection projects with Libya, Sudan and Saudi Arabia and aspires to become a major energy hub for Southeastern Europe. The project is expected to be completed in seven-eight years.
Likewise, four high-voltage, direct current (HVDC) electricity cables stretching 3,800 km from Britain’s southern coast, beneath the sea, aim to connect to a patch of desert at Guelmim Oued Noun in central Morocco.
The oil-rich Gulf countries, including Saudi Arabia, also are looking to diversify energy requirements to fire their power plants. The kingdom’s electricity is generated from natural gas (52%), oil (40%) and steam (8%). But a looming energy shortage requires Saudi Arabia to increase its 55 GW capacity to 120 GW by 2032.
Last year, Singapore and Australia inked a similar agreement for an undersea cable from a planned major solar farm project in the Northern Territory supplying the island-nation with sustainable electricity by 2027. The project won major project status this week from the Australian federal government, which will help smooth the approval process for the $22 billion Australian-Asean Power Link using high voltage direct current (HVDC) technology.
“We are already exporting and importing power from Nepal, Bhutan so all the legal and regulatory framework are in place,” said a Dubai-based energy consultant familiar with the plans. “Very soon connecting Greece with Bangladesh and then Singapore and Australia will not be a distant dream. The six-seven hour time difference is really suitable for the arbitrage to kick in.
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