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New power plants to meet Kuwait’s electricity demands beyond 2030
November 7, 2015, 4:32 pm
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Kuwait has one of the highest per capita electricity consumption in the world. The country’s use of around 15,722kWh of electricity per person in 2012 placed it among the world’s top five in terms of electricity consumption. To put this profligate usage in context, much larger and highly industrialized countries such as Germany, France and the UK, all used less than half of Kuwait's per capita consumption.  

High summer temperatures, necessitating the use of air conditioning for many months of the year, are often cited for this high consumption. But even in Saudi Arabia, with an equally extreme climate, the per capita usage of electricity was only 8690kWh in 2012.

A primary reason for Kuwait's extravagant electricity consumption is the highly subsidized rate at which it is made available to the public. The production cost of electricity in Kuwait is estimated to be around 38fils per kWh, but it is sold to consumers at a subsidized unit price of two fils per kWh.  This unit price has remained unchanged for nearly 50 years, since it revised down from 27fils per kWh in 1966. In the 2012-13 financial year the government spent nearly half of its KD6.3 billion consumer services subsidy on subsidizing electricity.

With oil prices falling sharply since mid-2014, the government is keenly aware that it needs to rein-in its unsustainable subsidy programs. However, a proposal by the International Monetary Fund (IMF) to help cut the cost of subsidies through a tariff structure based on usage, did not meet with approval from parliament. The IMF recommendations were designed to generate additional revenues of up to one percent of GDP and could have potentially reduced usage by nearly 20 percent.

Besides consumer usage, Kuwait has also witnessed a steady increase in electricity demand from the increase in housing, boost in industrial growth and new infrastructure investments in many sectors. All of these have steadily taken a toll on the electricity being generated by Kuwait’s power stations.

According to Arab Union of Electricity, in 2013, Kuwait had an installed electricity generation capacity of 15.7GW but with a 44 percent capacity factor the average output has been only around 7GW. With a peak demand of 12.1GW reached in 2013, government-run power utilities are finding it increasingly difficult to meet the growth in demand, which has averaged around 5 percent annually over the last decade.

To meet the increasing demand, the government has initiated a major investment program to build new power projects. These new projects, some being implemented and others in the planning phase, are expected to increase installed capacity to 25GW to meet the anticipated peak demand of 22.5GW by 2020 and to have a 10 percent reserve margin.

Most of this increase in capacity will come from power stations fueled by oil or gas. Around 67 percent of Kuwait's power production is currently fueled by oil, but the government is increasingly looking to gas as a fuel for its power stations.

The government's new power initiatives also call for more private sector participation. Some of the power plants to be implemented through the Public Private Partnership (PPP) program include the four-phases of Al-Zour North Integrated Water and Power Producer (IWPP) project and Al-Khairan IWPP.

The first phase of Al-Zour IWPP, which is expected to be completed and commissioned by the fourth quarter of 2016, would have a power and water desalination capacity of 1,500MW of energy and 102 million imperial gallons per day (MIGD) of drinking water. When completed, the total capacity of all four phases of Al-Zour North would be 4,800MW of electricity and approximately 280MIGD of desalinated water.

A second PPP project in the planning stage is the Al-Khairan IWPP, which will have a combined electricity production and water desalination capacity of 2,500MW and 125MIGD respectively. The government is also looking to add two smaller expansion plants with 500MW each as a short-term solution to meet the rising power needs. When commissioned as planned and completed on schedule, these initiatives are projected to meet Kuwait’s electricity demands well into 2030.

In line with its shift towards more sustainable power generation, Kuwait is also aiming to generate at least five percent of its electricity from renewable sources by 2020 and 15 percent by 2030, mainly from its abundant solar radiation. Kuwait gets one of the highest daily solar radiation in the world of around 8,000Whr/m2, but so far this has remained unharnessed.  Solar power is not only more efficient and cheaper compared to other sources of renewable energy but is also very environmentally friendly.

The Abdaliya Integrated Solar Combined Cycle Project is designed as the first solar-thermal power plant in Kuwait. The total capacity of the power plant will be 280MW with contribution from solar being 60MW. An additional benefit to this plant is that its CO2 emissions will be 48,000 tons less than that emitted by a conventional plant of comparable capacity.

However, no amount of power generation will prove sustainable unless the government inculcates a sense of energy and water conservation among the people. Before any policies and frameworks are implemented, the country needs to get its sky-high energy and water consumption down to global averages.

 

 

 

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