New construction and industrial projects could tip the balance between supply and demand
August is traditionally a bad month for Kuwait’s power sector. With the supply and demand for electricity delicately balanced, the extensive use of air-conditioning during the height of summer means that blackouts have become a way of life for many Kuwaitis.
The Electricity & Water Ministry and Partnerships Technical Bureau aims to make power cuts a thing of the past by awarding a series of engineering, procurement and construction (EPC) contracts and independent power projects (IPPs).
|Kuwait’s electricity demand and installed capacity|
|Peak load (MW)||Capacity (MW)|
|Source: Ministry of Electricity & Water|
There will be many hurdles to overcome. As the last country in the Gulf to embrace private power, Kuwait’s first independent water and power project (IWPP) will present a steep learning curve for both the government and the developers chosen to develop the scheme.
The success of the private power programme is crucial because new legislation means that only small power plants that are under 500MW can now be built using EPC contracts.
There are few signs that an easing of demand will occur. With a growing population that is given few incentives to limit its consumption, demand is forecast to continue to rise sharply from about 11GW currently to 15GW in 2015 and 22GW by 2020.
The demand for power will also be driven by Kuwait’s ambitious new projects that will require 10,000MW of power by 2020. For housing alone, the government plans to build 68,228 units by 2020. Contracts are already being awarded for the projects by Kuwait’s Central Tenders Committee (CTC) on behalf of Public Authority for Housing and Welfare. The most recent was for public buildings of suburb C of the Sabah al-Ahmad housing development which was awarded to the local Alamiah Building Company in mid-August.
As well as residential buildings, the government is planning new commercial buildings that together with the new housing require about 6.5GW of power, according to the Electricity & Water Ministry.
Industrial projects in both the oil and non-oil sectors will also drive up demand for power by 2.5GW by 2020. The remaining 1GW of demand will come from the new university and Bubiyan Island projects.
As new construction contracts are awarded through the summer, the pressure to install more capacity will intensify. Should the additional power generating capacity fail to come online in time, many of the planned megaprojects will have to stand empty as they wait for electricity.
For the government that would be unacceptable as it would derail plans to provide new homes for their people and new industries for them to work in. If Kuwait does not make swift progress and start developing new power projects soon, the government will inevitably have to face this dilemma in the future.