Qatar’s power surplus fuels exports

16 March 2011

Electricity transfers are likely to become more common in the region’s fastest-growing power market, as Doha increases its reserve margin and supply continues to outweigh demand

Key fact

Qatar’s installed capacity is currently about 7,900MW, giving it a reserve margin of 36 per cent

Source: MEED

Qatar’s peak power demand has once again experienced double-digit growth, with a 12 per cent rise between 2009 and 2010. From a high of 4,535MW in 2009, peak demand hit 5,095MW in July 2010. This was not quite as high as the 14 per cent growth experienced between 2008 and 2009, but still added 560MW to peak requirements.

Despite the ambitious project schedule, supply should continue to exceed demand … to the World Cup in 2022

As the region’s fastest growing power market, the country has had no problem keeping supply ahead of demand. Its massive investment programme, which saw over $10bn invested since 2000, means that installed capacity is currently about 7,900MW, giving it a reserve margin of 36 per cent. By April, when the final 900MW of the $3.8bn Ras Laffan C independent water and power project (IWPP) comes online, this will rise to 40 per cent.

Export potential for Qatar

The Ras Laffan C site is being developed by Ras Girtas Power Company and is set to produce 2,700MW, along with 63 million gallons a day (g/d) of desalinated water. It is an example of the regional trend for larger power stations. The plant has eight gas turbine generators, eight heat recovery steam generators, four steam turbine generators and 10 desalination units.

Ras Laffan C also demonstrates Qatar’s preferred model for IWPPs. Qatar Electricity and Water Company (QEWC) takes a major stake in the developer consortia, often through Qatar Power Company, in which it owns a 55 per cent stake, before taking a private partner. Germany’s Siemens, Japan’s Mitsui, Chubu and Marubeni and France’s GDF Suez are all key players.

 In the long-term, Qatar plans to use this model in international markets, with its first foray being for two 450MW independent power projects (IPPs) in Syria. These are understood to be planned following Syria’s first 180-250MW IPP, currently out for tender at Al-Nassiriyeh. A total of 14 companies have pre-qualified for the project and a bid deadline is yet to be announced.

With the highest reserve margin in the region, many expect to see Qatar taking a larger role in the regional power supply sector, through the GCC Interconnector. Bahrain and Kuwait have purchased power from the state, via the grid, and are understood to be keen to continue to purchase power from their energy-rich neighbour. A framework for bilateral electricity trading agreements has just been developed by the GCC Interconnection Authority, with support from UK law firm Norton Rose and US economic consultant National Economic Research Associates (NERA). “The bilateral agreements have been written and we are awaiting final approval from the six member states,” an official tells MEED. “Once received, the templates will be sent to the concerned utilities for their use.”

In the longer-term, Qatar General Electricity &Water Corporation (Kahramaa) forecasts that its current capacity building will see it through to 2015, when another major power station will be required. This is expected to be another 2,000MW gas-fired power station, matching the recently completed Mesaieed A power plant in terms of size. Known as Facility D, the new project is set to be tendered in 2011, for construction to begin in 2013. Further expansion at Ras Laffan is also expected.

Kahramaa has been a prolific client in the transmission and distribution sector. Projects in the ninth phase of its upgrade system are under construction, including a $750m contract to build 22 new substations and upgrade a further eight, awarded to Siemens and Hyosung Ebara. Contracts for phase 10 will be awarded in 2011.

Sufficient water supply in Qatar

In terms of desalination, demand for water averaged 220 million g/d in 2010 which is below the installed capacity of 236 million g/d. The arrival of an additional 43 million g/d in April, from Ras Laffan C, is a much needed development in the sector, which will then have an installed capacity of 279 million g/d. Ras Laffan C currently produces 20 million g/d. When completed, the total capacity of 63 million g/d will make it the country’s largest desalination plant followed by Ras Laffan B, with 60 million g/d and Ras Abu Fontas A1, which desalinates 45 million g/d.

Qatar has demonstrated its ability to ensure supply outpaces demand in the power sector. The tiny Gulf state leads the way for the region, with its enormous reserve margins and ample available resources to sell into the GCC grid. Its accurate forecasting and long-term planning means that despite the ambitious project schedule, supply should continue to exceed demand all the way to the World Cup in 2022.

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