Kuwait’s Ministry of Electricity and Water (MEW) is considering proposals to reform electricity tariffs and government subsidies as part of efforts to reduce energy usage in its power sector.

Reforming electricity tariffs and subsidies is vital if Kuwait is to achieve its energy conservation targets, MEED’s Kuwait Electricity & Water Efficiency Conference was told on 3 June.

“The heart of the problem [of improving energy efficiency] is energy is 95 per cent subsidised,” said Mike Wood, adviser, Ministry of Electricity, speaking at the MEED event.

“A primary MEW objective is tariff increase and targeted subsidy redistribution,” said Wood.

Wood said that the ministry was looking at proposals for subsidy reform, such as reducing subsidies for consumption above set targets, in order to reduce power consumption. Kuwait has the highest electricity consumption in the world, at about 16,090 kw/h a year, compared to 13,281 kw/h in the UAE and 11,919 kw/h in the US.

The MEED conference had earlier heard from Sami al-Ali, managing director, Middle East Renewable Energy Group (MEREG) that Kuwait has currently spent KD3bn ($10.6bn) on producing electricity and water, which could rise to KD8bn by 2030 unless the fuel usage was reduced.