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Achieving the Amir’s 2030 vision of diversifying Kuwait’s energy mix
May 20, 2017, 5:38 pm
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Kuwait is reliant on the burning of fossil fuels for its energy and water production. According to Kuwait’s Ministry of Electricity and Water (MEW), electricity consumption is growing at almost 8 percent a year, which means that generating capacity has to be doubled every decade. By 2030, approximately 900,000 barrels of oil per day will be used to cover the demand for electricity and water.

This will be one-third of Kuwait’s oil production. Such demand will pose significant challenge to the energy sector’s capacity in terms of fuel and infrastructure. In order to diversify its energy mix, Kuwait has set its renewable energy goal to increase share of renewable energy generation to 15 percent by 2030, which will be roughly equivalent to 4.5 GW of power production.

Electricity produced from renewables will ensure Kuwait’s energy security in the future, as less oil and gas has to be consumed domestically thus freeing up more oil for exports to increase the country’s revenues. Renewable energy will also positively contribute to the economy through job creation, attracting investment, and private sector growth. Renewable energy technologies will allow Kuwait to tackle the twin issues of air pollution and carbon emissions.

The target though might appear ambitious at first sight for a country that has a meager 12 MW of renewable energy generation capacity installed by the end of 2016; it is achievable as Kuwait is endowed with abundant renewable resources. Kuwait has 1900 kWh/sq. m/year of solar potential and 1605 hours /year of wind potential.

Kuwait should in-principle have no trouble reaching and exceeding its target, if the political will exists and the renewable energy program is rigorously implemented.

More progress is required in market infrastructure, policies and building technical and commercial skills. Some of the groundwork to turn the renewable energy vision into reality has already progressed.

Together with relevant stakeholders, Kuwait's oil industry has initiated a number of large-scale renewable energy projects and some in gasoline stations, power plants, green buildings etc.

With numerous projects in the pipeline, the focus now should be on implementing projects in a timely manner, building necessary local capabilities and on developing new projects to be able to reach the target. In addition, setting a vision reflects the government commitment towards renewable energy, while the next logical step would be to develop a comprehensive renewable energy framework with supporting policies and regulations to attract more investments.

Demonstrating success in Kuwait will open up additional opportunities for its finance sector and help Kuwait attain an international role in the renewable space and more importantly in achieving the United Nations Sustainable Development Goals. Realizing the opportunity will require close collaboration between policy makers, research institutes, oil sector and financial institutions.

Better policy definition and establishing a road map for a circular economy will help development of renewables, further de-risk projects, and support the development of new and innovative structures.

In the short and medium term, Kuwait will need to follow up with concrete steps towards implementation of the Amir’s vision to maintain its leadership in the energy sector and establish its credibility in the renewable energy space.
 

 

 

 

Bedanga Bordoloi

Kuwait Manager, EY’s Climate Change and Sustainability Services (CCaSS) practice. The views expressed here is of the author and does not reflect that of any organizations.

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