Bahrain’s first independent power station is set to begin fully fledged commercial operation next month.

The $500 million, 950 MW combined cycle plant, owned and operated by the Al Ezzel Power Company (AEPC), operated in open-cycle commercial operation for six months from April 30 to October 31, 2006 to assist in accommodating Bahrain’s summer loads when peak system demand was in excess of 1,800 MW.  That phase is being followed by the completion of construction and commissioning and testing of the combined cycle plant.
Commenting on the run-up to full-scale operation, Al Ezzel CEO Stafford D I Reimers said that operation during the summer of 2006 was very successful and nearly 1.3 million MWh of electricity was sold to the Ministry of Electricity and Water (MEW). “The gas turbines were very reliable and overall availability was 99.7 per cent. The plant operated at the contractual capacity of 470 MW referred to 45 deg C ambient temperature,” he added.
“When we operate at full capacity, it will be in combined cycle with heat recovery steam generators (HRSGs) and condensing steam turbines in addition to the gas turbines that were used last year.”
The plant will use four Siemens model SGT5-200E gas turbine-generators - formerly V94.2 (6) - as well as four HRSGs with supplementary firing and two steam turbine-generators.
Siemens Power Generation was awarded the engineering, procurement and construction contract. In addition to the turnkey supply of the complete power plant, they were responsible for the gas supply pipeline and gas connection facilities at the Bahrain Petroleum Company (Bapco) Hidd Metering Station.
 Al Ezzel Power Company is owned by Suez Energy International and Gulf Investment Corporation (GIC) (45 per cent each) and the Government of Bahrain’s Pension Fund Commission (10 per cent).
The plant became the first independent power station after the Bahraini Government made a decision to privatise the power generation industry. AEPC was awarded the project on July 31, 2004 after a competitive bidding process managed by the Ministry of Finance and National Economy.  The commercial arrangements are governed by a 20-year Power Purchase Agreement (PPA) with the Ministry of Electricity & Water (MEW).
The peak load on the Bahraini grid is expected to be over 2,000 MW this summer and is growing at 10 to 15 per cent per year. Other stations supplying power are the MEW Sitra and Riffa plants with a total capacity of around 750 MW and the recently privatised 970 MW Hidd Power & Water Station in which Suez is also a partner.
In 2009 Bahrain will be connected to the GCC grid and any surplus from these plants and Al Ezzel can be exported.
AEPC charges the MEW for capacity and energy under the PPA. “The capacity charge covers our investment costs, our return on equity and all of our fixed costs,” said Reimers.  “The energy charge comprises variable costs related to the production of electricity.   Fuel is our biggest cost, followed by maintenance costs related to wear and tear on machinery and the cost of consumables other than fuel. The MEW’s payments to AEPC are guraranteed by the Bahraini government through its Ministry of Finance.
“We are contractually committed to a certain efficiency level which, when not met, requires us to absorb the difference on the additional fuel consumed and vice versa,” Reimers said.
Gas fuel is supplied by Bapco. “AEPC doesn’t take the risk of changes in the gas price. Increases in the price are passed on to the MEW as is standard practice in our industry,” said Reimers. 
Plant operations and maintenance will be conducted under a 20-year contract by the Al Ezzel Operation and Maintenance Company (AEO&M), a separate organisation owned fully by Suez.
Among the key subcontractors to Siemens were Doosan of South Korea for the HRSGs and local companies that included GPZ Bahrain, tasked with the main civil works, Nass Contracting, responsible for circulating water civil works and the mechanical erection, and Comsip Al Ali, which performed the electrical erection.
Other major subcontractors were Keller Grundbau (soils improvement), Sampyung (piping) and SFFECO (fire fighting systems).
With the installation of dry low nitrous oxide combustors on the gas turbines, emission levels are maintained within limits prescribed by the Bahraini Government and the World Bank, said Reimers.
A priority at Al Ezzel is providing work opportunities for Bahraini nationals. “AEO&M has 13 Bahraini employees of which eight are engineering graduates,” said Reimers. “The operations company had a meeting at the University of Bahrain and another at the Ministry of Labour on the issue of recruiting local staff.  It conducted  a workshop and interviewed a number of people from among whom it selected the eight graduates who  are now working as operators, shift engineers and fulfilling other staffing duties. Siemens is providing training as part of its scope under the construction contract.” 
In the GCC region, Suez is involved in projects in Saudi Arabia, Oman and Abu Dhabi in addition to Bahrain.
“Suez’s philosophy is to participate both with other international companies having expertise in our business and local partners that can provide regional knowledge and know-how.” said Reimers.
“The trend is towards privatisation because independent operators have proved to be more efficient than the traditional state-owned utilities.”
Suez Energy International’s activities and investments in the Gulf region started in 1994 with the development of the first independent power producer, the Al Manah project in Oman.
In Abu Dhabi, Suez is among three founding shareholders in Taweelah A1, one of the largest power and water desalination plants in operation in the world. In 2004 the group won the public tender for both the Sohar Independent water and power project (IWPP) in Oman and the Al Ezzel IPP in Bahrain. Also in Bahrain, Suez, together with International Power and Sumitomo, completed last year the acquisition of the Al Hidd IWPP. In December 2006 it signed the Barka 2 and Rusail power and water contracts in Oman and the Marafiq independent power and water project in Saudi Arabia.
The Taweelah A1 Plant has an original production capacity of 1,360 MW for power and 380,000 cu m per day for water. As from May 2009, the extension will increase the total power capacity up to 1,592 MW.
The Marafiq plant, the world’s largest IWPP, consists of a combined cycle gas turbine plant with a capacity of approximately 2,750 MW, and 800,000 cu m of water per day.
The Barka2-Rusail project will provide 678 MW of power and 120,000 cu m per day of water.
The Sohar independent water and power plant consists of a 585 MW gas turbine combined cycle plant and a 6,250 cu m per hour water desalination plant.
In the Middle East, Suez has in operation or under construction 8,200 MW of power generation capacity. The company also has 1.8 million cu m per day of installed water production capacity. It is the top developer in the region by equity power capacity and the second largest developer by equity water capacity.
The Gulf Investment Corporation is the first financial institution to be established by the member states of the Gulf Cooperation Council. It is equally owned by the GCC states and its legal status is that of a GCC company. GIC has shareholders’ equity in excess of $1.9 billion and total assets of over $8.1 billion.
GIC has extensive experience in, and commitment to, the regional power and water sectors.  Other than Al Ezzel it is involved as an investor and board member in the Ras Laffan Power Company, the first private sector power and desalination project in Qatar and as a developer and major shareholder in the Marafiq and Shuqaiq IWPPs in Saudi Arabia.