meed-logo

line1 line2 line3
SIGN IN / REGISTER

Warming erodes Kuwait’s power and water reserves

14 August 2023

More on Kuwait’s power and water sector: 

> IWPP: Firms respond to Kuwait independent utilities request
> POWER: Local firm wins 250MW Subiya package
> PRIVATISATION: Kuwait thermal plant privatisation to go ahead

 

The temperature in Kuwait soared to 51 degrees Celsius on 1 August, sending its electricity load index up to 16,940MW. This breached its maximum expected load this year of 16,830MW by 0.7 per cent.

This year’s projected maximum load is already 4 per cent higher than the previous year's recorded maximum load. It leaves only roughly 8 per cent of reserve capacity against an available capacity understood to stand at 18,250MW.

Similarly, water consumption across the Gulf state on 2 August, when the temperature decreased to 50 degrees, exceeded production by 29 million gallons, prompting the state utility to access its strategic water reserve capacity to plug the shortfall.

The electricity consumption spike reportedly caused two feeders at the country’s main substation south of Surra in the capital to trip, which led to power outages in some parts of Zahra, a district in Kuwait’s Hawalli governorate.

Kuwait’s Electricity & Renewable Energy Ministry (MEWRE) assured the public that the maximum capacity available in the country’s electricity network during the current summer is 18,250MW, as earlier cited, and that it could safely provide up to 17,660MW.

Persistent delays

The following week MEWRE – through the Kuwait Authority for Partnership Projects (Kapp) – received prequalification applications for the contracts to develop Kuwait’s next two independent water and power producer (IWPP) projects.

The two schemes – Al-Zour North 2 & 3 and Al-Khiran 1 – will have a total combined power generation capacity of 4,500MW and a water desalination capacity of over 150 million imperial gallons a day (MIGD), which will go a long way to address Kuwait’s precarious electricity and water supply situation.

Ironically, these two schemes have been in the planning and early procurement stages since 2017 and have suffered significant delays in the intervening period.

It is the second time developers have submitted statements of qualification (SOQs) for the contracts over the preceding 11 months.

The delays have caused major frustration for some developers and contractors. One utility developer that submitted an SOQ in September last year told MEED they did not participate in the latest attempt to start the prequalification process for the IWPP schemes, without elaborating.

Others expect the country’s stakeholders to eventually approve and expedite the procurement process for the integrated power and desalination facilities.

“I’m not very optimistic, but we submitted an SOQ anyway,” another source tells MEED.

EPC projects motoring ahead

The ministry’s conventional power plant projects have been moving at a relatively faster pace. In June this year, the local company Heavy Engineering Industries & Shipbuilding (Heisco) won a contract for the phase 2 upgrade of the Subiya power plant complex in Kuwait.

Heisco saw off competition from two local companies, Alghanim International and Al-Zain United General Trading & Contracting, for the KD114.28m ($372m) contract.

The project aims to convert an existing 250MW simple-cycle plant into a combined-cycle gas-turbine plant.

In April, a consortium comprising Heisco and Japan’s Mitsubishi Power was also awarded a contract to retrofit the main thermal power generation plant at the power complex.

The contract is understood to be valued at KD90.9m. It entails the upgrade of eight steam turbines and electric generators at the Subiya power plant, which is expected to reach a capacity of 2,400MW once the project is complete.

The existing plant at the Subiya power complex was commissioned between 1998 and 2002. This implies that the steam turbines and generators in commercial operation for nearly 20 years require upgrades to continue operating and improve their performance.

Two steps forward

While the country has pledged to become carbon neutral by 2060, the state utility has yet to make any remarkable progress in procuring new renewable energy capacity.

The recent political deadlock has hampered the procurement of the next phases of the Shagaya Renewable Energy Programme (SREP), despite the award 12 months previously of the project’s transaction advisory contract to a team led by London-headquartered consultancy firm EY.

At the time, the advisory contract was understood to cover the Al-Dibdibah solar project, which will comprise SREP’s second phase, and a third phase expected to include a 720MW solar photovoltaic (PV) plant, a 1,150MW concentrated solar power (CSP) facility and a wind power farm.

Notably, two state-backed downstream operators – Kuwait National Petroleum Company and Kuwait Integrated Petroleum Industries Company (Kipic) – have launched a tender for a contract to undertake a pre-feasibility study identifying opportunities to use renewable energy in their operations.

Kuwait is also expected to make some progress on its first utility privatisation scheme, which forms part of the initiative to strengthen private sector participation in the sector.

In December last year, it was revealed that UK-headquartered Deloitte had submitted a low bid of KD1.2m ($3.9m) for the transaction advisory contract in line with the planned privatisation of the $1.26bn North Shuaiba power and water plant in Kuwait.

GCC grid

While working to boost its electricity reserves and make its electricity systems greener, Kuwait stands to benefit from the ongoing upgrade of the GCC electricity grid, through which other GCC states, such as the UAE, may decide to transmit excess clean energy.

The Al-Fadhili high-voltage direct current (HVDC) converter station upgrade in Saudi Arabia is expected to enable the exchange of 1,800MW of electricity between the six states once complete.

In October last year, the GCC Interconnection Authority (GCCIA) awarded India-based KEC International a contract for an overhead transmission line project linking the substations in Wafra in Kuwait and Fadhili in Saudi Arabia.

The estimated $120m project extends an existing double-circuit 400kV line from Al-Zour in Kuwait to Ghunan in Saudi Arabia. The line has an intermediate interconnection at Fadhili, with associated substations completed in 2009 as part of the first phase of the GCCIA network. The new project is expected to complete in 2025.

This month’s special report on Kuwait also includes: 

> ECONOMY: Stakeholders hope Kuwait can execute spending plans
> ENERGY: Kuwait’s $300bn energy target is a big test
> BANKING: Kuwaiti banks enter bounce-back mode
> INTERVIEW: Kuwait’s Gulf Centre United sets course for expansion

https://image.digitalinsightresearch.in/uploads/NewsArticle/11069881/main.gif
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Chinese and Saudi partners set up Hithium Manat

    17 October 2024

    Register for MEED's 14-day trial access 

    Chinese energy storage solutions firm Hithium Energy Storage Technology Company (Hithium) and the local Nabilah AlTunisi have formed a joint venture that will manufacture battery energy storage systems (bess) in Saudi Arabia.

    The joint venture is called Hithium Manat. The planned manufacturing facility has an annual production capacity target of 5 gigawatt-hours (GWh), according to an official statement.

    Hithium launched energy storage solutions designed for the region's harsh environment during a solar and storage conference held in Riyadh.

    According to Hithium, "These systems feature advanced sandstorm protection and robust high and low-temperature designs, supporting ultra-long discharge cycles of 12+ hours."

    It added that the new product line is "customised to meet the unique demands of the Middle East and Africa region".

    Nabilah AlTunisi is the founder and owner of Hithium Manat's local partner.

    "This strategic alliance will not only provide access to world-class energy storage technology but also generate local employment opportunities, stimulate technological innovation and actively contribute to realising the kingdom's Vision 2030 objectives," AlTunisi said.

    Battery energy storage market

    In August, National Grid Saudi Arabia, a subsidiary of state utility Saudi Electricity Company, awarded the engineering, procurement and construction (EPC) contracts for three energy storage systems to Riyadh-based investment group Algihaz Holding. The estimated $800m projects are located in Najran, Madaya and Khamis Mushait.

    National Grid also recently tendered contracts for the construction of five battery energy storage systems with a total combined capacity of 2,500MW across the kingdom.

    The planned facilities, each with a capacity of 500MW or roughly 2,000 megawatt-hours, are located in or within proximity of the following key cities and load centres:

    • Riyadh
    • Qaisumah
    • Dawadmi
    • Al-Jouf
    • Rabigh

    Every utility in the region is procuring or planning to procure bess capacity in light of growing intermittent renewable power in their grids. 

    The overall capacity of deployed bess globally is expected to reach 127GW by 2027, up from an estimated cumulative deployment of 36.7GW at the end of 2023, a GlobalData report issued in June said.

    The report cited Chinese companies BYD and CATL and South Korean companies LG Energy Solutions and Samsung SDI among the top battery technology providers globally.

    Related read: Battery storage gains foothold

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12742375/main.jpg
    Jennifer Aguinaldo
  • Kahramaa invites Ras Laffan substation bids

    17 October 2024

    Qatar state utility General Electricity & Water Corporation (Kahramaa) has tendered a contract to upgrade the Ras Laffan C substation.

    The scope of work covers the upgrade of existing 220-kilovolt (kV) and 400kV substations and the addition of 220kV gas-insulated switchgear bays and an 800-megavolt amps transformer.

    Kahramaa issued the tender on 15 October and expects to receive bids by 28 November.

    The project bid bond is valued at QR1.5m ($410,000).

    Separately, Kahramaa invited firms to submit their proposals for a contract to supply and install power transmission and distribution equipment, including providing and connecting substation main earth and equipment earthing, commissioning fitted substations and pre-commissioning protection testing for 11kV switchgear panels.

    Kahramaa expects to receive bids for this contract, with a bid bond of QR3m, by 14 November.

    Kahramaa is expanding its power generation capacity. Negotiations are under way with the sole bidder led by Japan's Sumitomo Corporation for a contract to develop and operate Qatar’s Facility E independent water and power producer (IWPP) project.

    The Facility E IWPP scheme will have a power generation capacity of 2,300MW and a water desalination capacity of 100 million imperial gallons a day.

    Earlier this month, Qatar Electricity & Water Company announced plans to develop a 500MW peak power unit in Qatar's Ras Abu Fontas area.

    Construction is also under way for two solar farms with a total combined capacity of 875MW in Mesaieed and Ras Laffan.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12742343/main.jpg
    Jennifer Aguinaldo
  • Neom starts Tabuk highway prequalifications

    17 October 2024

     

    Saudi Arabian gigaproject developer Neom expects firms to submit their prequalification applications for a project to build a mountain road near Tabuk later this month.

    The 11.5-kilometre (km) Tabuk mountain road project comprises a 4km tunnel and 7.5km dualisation of an existing road, according to an industry source.

    Neom expects to receive statements of qualifications from interested engineering, procurement and construction contractors by 29 October.

    The tender proceedings for Neom's transport infrastructure projects are gathering momentum.

    Neom received expressions of interest for a contract to build a coastal highway and infrastructure project catering to the Magna development on the Gulf of Aqaba on 15 October.

    The project, called Magna Infrastructure Packages, is split into three. Package one is 13km, package two is 42km and package three is 41km. The packages cater to the development’s north, central and south areas.

    The design-and-build project covers utilities for water, power, mobility, sewer, buildings and highways, in addition to the coastal highway. The project is expected to be completed by 2027.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12738632/main.gif
    Jennifer Aguinaldo
  • Adnoc completes Fertiglobe stake acquisition

    16 October 2024

    Register for MEED's 14-day trial access 

    Abu Dhabi National Oil Company (Adnoc) has completed the transaction to acquire a majority stake in UAE-headquartered Fertiglobe, the largest nitrogen-based fertiliser producer in the Middle East and North Africa region.

    Adnoc has increased its shareholding in Fertiglobe to 86.2% through the acquisition of 50% + 1 share held by Netherlands-based OCI Global, which is backed by Egyptian billionaire Nassef Sawiris. The Abu Dhabi energy giant previously held a 36.2% stake in Fertiglobe.

    The remaining 13.8% of Fertiglobe’s shares trade on the Abu Dhabi Securities Exchange following the company's stock listing in October 2022.

    Adnoc announced the transaction to become the majority shareholder in Fertiglobe last December. Fertiglobe’s shares were priced at AED3.2 ($0.87) a share, valuing the deal at $3.62bn.

    Following the completion of the majority acquisition, “Fertiglobe’s current management team will stay in place”, including Ahmed El-Hoshy in his role as CEO, Adnoc said in a statement on 15 October.

    “Ahmed El-Hoshy spent 15 years growing OCI’s US and European business in ammonia and methanol via greenfields, brownfields and acquisitions, generating significant value for shareholders by leading recent divestments,” Adnoc said.

    Growing chemicals business

    Fertiglobe is the world’s largest seaborne exporter of urea and ammonia combined, exporting to 53 countries with a collective market share of about 10% of global trade in these products.

    “The acquisition represents … the expansion of Adnoc’s low-carbon fuels business, and supports its goal to become a top-five global chemicals player,” Adnoc said.

    “Fertiglobe will become the platform for Adnoc’s growth in fertiliser and low-carbon ammonia,” Adnoc said in its statement.

    Adnoc added it will transfer its stakes in existing and future low-carbon ammonia projects to Fertiglobe “at cost and when ready for startup”, including its two projects in Abu Dhabi and other projects in its global portfolio. Adnoc has yet to specify the low-carbon ammonia and blue ammonia production projects.

    MEED understands that the first Abu Dhabi project in question is the blue ammonia facility in the Taziz Industrial Chemicals Zone in Ruwais. Fertiglobe has partnered with South Korea’s GS Energy Corporation and Japanese investment firm Mitsui & Company to build the complex, which will have a production capacity of 1 million tonnes a year (t/y).

    In February last year, the joint venture awarded Italian firm Tecnimont the main contract for executing the engineering, procurement and construction works on the Taziz blue ammonia project.

    The second Abu Dhabi blue ammonia project that Adnoc could be referring to in its statement is a proposed scheme for which it signed a joint feasibility study agreement with British energy producer BP in May 2022.

    Adnoc further said that the two projects in Abu Dhabi will add 2 million t/y of output potential, more than doubling Fertiglobe’s current commercial ammonia capacity of 1.6 million t/y and increasing its total sellable capacity to 8.6 million t/y of net ammonia and urea combined, in addition to other announced global projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12735570/main1542.jpg
    Indrajit Sen
  • Neom receives interest for Magna coastal highway

    16 October 2024

     

    Saudi Arabia’s gigaproject developer Neom has received interest from firms for the contract to build a coastal highway and infrastructure project linking Neom to the Magna development on the Gulf of Aqaba.

    The project, called Magna Infrastructure Packages, is split into three. 

    Package 1 is 13 kilometres, package 2 is 42km and package 3 is 41km.

    The packages cater to the development’s north, central and south areas.

    According to an industry source, the design-and-build project covers utilities for water, power, mobility, sewer, buildings and highways. It could cost between $250m and $500m.

    Local and international engineering, procurement and construction (EPC) contractors are understood to have submitted their expressions of interest to participate in the tender on 15 October.

    The coastal highway and infrastructure project is expected to be completed by 2027, the source said.

    Magna consists of 12 developments featuring 15 hotels that offer 1,600 hotel rooms, suites and apartments and over 2,500 residences.

    The development will span a 120km-long coastal strip with an average width of 3.5km. The total land area is about 430 square kilometres.

    The Magna infrastructure is divided into six districts, as follows:

    • District 1 – Northern Gateway: includes 13 bridges and underpasses with a length of 1.9km, 18 wadi culverts and five drainage culverts
    • District 2 – Romantic Bay and the Cube: includes two bridges and underpasses spanning 360 metres, 40 wadi culverts and 24 drainage culverts
    • District 3 – Wadi Tayyib: includes two bridges and underpasses, 26 wadi culverts and nine drainage culverts
    • District 4 – Jungle Club: includes three bridges and underpasses and 17 wadi culverts
    • District 5 – Magna: includes two bridges and underpasses, 14 wadi culverts and two drainage culverts
    • District 6 – Southern Gateway: includes three bridges and underpasses, 31 wadi culverts and one drainage culvert
    https://image.digitalinsightresearch.in/uploads/NewsArticle/12735899/main.jpg
    Jennifer Aguinaldo