Kuwait to invest $25bn in power infrastructure

Power consumption rates in Kuwait will continue to increase at 5.3% a year until 2015 despite the fact that the country already has one of the highest per capita usage rates in the world, according to a new report.

Kuwait Financial Centre, Markaz, said that the low pricing of power in the country – underpinned by heavy rates of government subsidies, had fuelled consumption rates alongside a population increase that had increased demand for desalinated water.

IMF forecasts predict that Kuwait’s population will grow from its current rate of 3.68m to 4.34m by the end of 2017, and Kuwait’s Ministry of Electricity and Water (MEW) estimates power demand to grow from the current 11,000 MW to 25,000 MW by 2030.

Markaz predicts that a spend of $25bn on building new power plants and infrastructure will be required in order to meet that demand, as the country’s seven current plants have a combined capacity of 13,233MW.

It also argues that demand for power will hit oil exports unless alternative sources of energy are found.

“Currently, 71% of the total electricity generated in Kuwait is by burning liquid fuels. With growing demand, Kuwait will have to forego its future revenue from oil exports, if it is not altering its energy mix,” the report states.

“As per estimates, Kuwait uses an average of 200,000 to 300,000 barrels of oil and refined products each day to generate power.”

Markaz said that the government has set a target of generating 2-3% of its power from alternative sources by 2030. It has also been encouraging private sector investment through the Partnerships Technical Bureau (PTB) launched in 2008.

One project to emerge as a result is a gas-fired plant at Al-Zour North which is expected to cost around $5.86bn and generate 4,800MW of electricity when it completes by the end of 2017. A second independent project with a value of $2.5bn at Al-Khairan is set to cost $2.5bn and deliver 2,500MW of energy.Kuwait to invest $25bn on power infrastructure.

Aug 26, 2012