Qatar has huge financial resources to spend on infrastructure, but a major demand challenge to confront. It has the third-highest per capita consumption of electricity in the Middle East already; its natural water reserves are severely strained, and the country is under pressure to ensure there is absolutely no risk of supply shortfalls during the 2022 World Cup.

Against this context, Doha has for some years been investing on a massive scale in power and water infrastructure. Between 2000 and 2011, the rate of growth in net electricity generation far outstripped trends across the Middle East as a whole, particularly in the last two years of that period.

Huge investment

In 2012, the country said it would invest $5bn in water and power projects. It subsequently promised total investment of $22bn between 2014 and 2022, with the addition of 2,100MW in generating capacity and the construction of 140 substations.

A key milestone came with the delivery of the Ras Girtas project in 2011, developed under a 25-year build-own-operate-transfer (BOOT) contract and with the capacity to generate 2,730MW of power and desalinate 63 million imperial gallons a day (MIGD) of potable water for supply to the General Electricity & Water Corporation (Kahramaa). This was equal to almost 30 per cent of national electricity demand and 20 per cent of water supply needs in 2011.

With Ras Girtas, Qatar’s total generation capacity reaches 8,700MW, while the water system can supply 325 MIGD. The project is a joint venture between Qatari entities and international investors – UK/France GDF Suez Energy International and Japan’s Mitsui, Chubu and Yonden.

Project pipeline

More projects are following on. In July, Qatar Electricity and Water Company (QEWC), the largest shareholder in Ras Girtas, announced plans for a new power and water project, at Umm al-Haul, to add a further 2,400MW and 130 MIGD. And QEWC has already contracted Japan’s Mitsubishi and Toyo Thai from Thailand to build the Ras Abu Fontas A2 desalination plant, with a capacity of 36 MIGD.

By early summer next year, it is expected that contracts will have been signed for an independent desalinated industrial water project at Ras Laffan, with financing to be put in place soon afterwards, so that construction can go ahead and the project can come onstream by the end of April 2017.

Kahramaa has also awarded Siemens a QR920m ($253m) contract to build nine substations for an expanded power transmission network covering residential, commercial and public sector sites across Doha and its suburbs. The German group has provided substations for the capital since 2005.

Demand challenges

Meanwhile, France’s Nexans is supplying medium- and low-voltage cables for the upgrade of the power transmission network, in a €100m ($127m) deal. The grid is being strengthened not only to cope with the demand resulting from overall population growth, but also to meet the requirements of major transport projects such as Doha’s expanded port facilities and new rail and metro systems. The 2,000 kilometres of cables are being produced at Nexans’ plant in Qatar.

Peak national power consumption during summer 2014 was about 6,800MW, meaning the country already has a comfortable reserve supply margin.

Water consumption

Qatar has one of the world’s highest per capita levels of water consumption; at 500 litres a day, this is quadruple the norm for Europe. To cater to this massive demand, the country is building at least five new reservoirs, and possibly more; further spending on desalination and wastewater plants also seems inevitable.

A crucial challenge is the improvement of water supply security. At present, Kahramaa operates with a reserve margin of only 60 hours’ supply, which can be extended to 72 hours if absolutely necessary.

The construction of the five new reservoirs is designed to increase reserve capacity to seven days’ water consumption and sharply enhance the security of supply.

Desalination

With rainfall averaging a mere 75.2 millimetres a year in Qatar, and no fresh water rivers or lakes, there is little or no scope for reserves to be replenished naturally. Indeed, artesian reservoirs are being drained at a worrying pace, to the point where they may no longer be potable.

Use of desalinated water has increased nearly four-fold over the past 20 years or so, reaching almost 430 million cubic metres in 2012 – although desalination in itself poses significant environmental questions over the long term.

Leakage rates

Strengthening water infrastructure will be a key part of the works programme, both to increase reserve security and to reduce wastage. At the moment, leakage rates from the distribution network are as high as 33 per cent – more than double the international norm of 16 per cent.

Already, France’s Saint Gobain PAM has been chosen to supply €200m-worth of pipes, valves and other water fittings for the first five new reservoirs, while UAE/Australian Leighton Contracting is building pipeline sections for the Mega Reservoir Corridor Main, a contract worth QR1.09bn ($300m).

Ashghal, Qatar’s public works authority, is upgrading drainage and sewerage systems in districts of Doha such as Bu Hamour and Najma. A $125m wastewater plant is also being installed for Qatargas at its liquefied natural gas (LNG) plant in Ras Laffan Industrial City.

The ongoing programme of capital projects should help Kahramaa stay ahead of the ongoing rise in demand, and also enable Qatar to position itself as an exporter of power to Bahrain and Kuwait, should the need arise.

Aware that the current rapid pace of growth in its home market may eventually cool off, QEWC is seeking to branch out into the international arena, through a new subsidiary, the $1bn Nebras Power Company, in which it has a 60 per cent stake. Nebras will target opportunities in high-growth economies in East Asia and the Middle East.

Sustainable energy

At home, Qatar is now looking at ways to make its massive power and water infrastructure more sustainable in environmental resource terms – and to shift at least some of the burden of fuelling these activities away from hydrocarbons, so that more natural gas can be kept for export.

Solar power is seen as having an important role to play, especially in providing the energy required to run desalination plants. These are an expensive source of water, but Qatar has the financial strength to continue investing in them, if this allows the country to better conserve its natural freshwater supply for priority uses and, particularly, if the use of solar power can help to soften the energy footprint of the plants.

There are suggestions that solar generation capacity could reach 1.8GW by 2020 and fuel a large proportion of the country’s desalination infrastructure. This would be an important contribution to the government’s National Vision 2030 goals for environmental sustainability.

Indeed, significant progress will be required much earlier than that if Qatar is to meet its promise of staging a carbon-neutral World Cup in 2022.

Solar panels

The state is responding with a serious move to position itself as a major player in the renewables sector. Qatar Solar Energy (QSE) has opened one of the biggest factories in the Middle East producing photovoltaic (PV) solar panels; besides the expanding domestic market, the plant is positioned to supply major overseas customers in countries such as Japan and Thailand.

It started out equipped to produce 300MW of solar panels each year, but there is scope to expand this to 2.5GW – underpinned by a contract recently signed with Kazakhstan’s Kazatomprom for the 10-year supply of solar grade silicon.

Economies of scale should help the company to produce solar panels at competitive prices; the factory will specialise in the production of panels for use in “sunbelt” markets – such as Qatar itself – where there is prolonged hot sunlight for much of the year.

Overall, the government estimates that Qatar’s solar energy potential is equivalent to oil production of 1.5 million barrels.