In the summer of 2010, schools closed early in Kuwait in order to conserve electricity. It was a clear signal that the country’s power sector was in crisis. But in terms of power generation, Kuwait has very few options.
While it has the world’s fifth largest oil reserves, the same is not true of natural gas reserves. It has used a significant proportion of its hydrocarbons production to generate power for domestic demand and continues to do so.
In 2010, 350,000 barrels a day of oil, about 11-15 per cent of total production, were used to generate power for electricity and water in the country. This figure is expected to grow.
Power consumption is currently rising at a rate of 7 per cent a year and the country is straining to meet demand. Following years of inaction on its capacity building programme, Kuwait needs to push ahead with its investment plans now if it is to keep the lights on. The task will only get harder. Demand projections suggest that installed capacity will need to grow from 11GW to 28GW by 2030.
Kuwait needs to push ahead with its power plans now if it is to keep the lights on
At the same time, Kuwait does not have sufficiently strong finances to continue to award engineering, procurement and construction contracts to meet its electricity needs. It has no choice, but to develop more power generation capacity using the private sector.
The Al-Zour North project is the country’s first independent water and power project (IWPP) and shows Kuwait is starting to recognise this. The project is set to be followed by a series of similar schemes as the government has said that every new project over 500MW in capacity must be privately funded.
In some ways, the power predicament is an opportunity for Kuwait if it is executed well. It can build out its power generation capacity with full knowledge of the fuel issues it faces. It can also benefit from the latest and most efficient technology. But it will need its first IWPP to be success in order to achieve any of that.