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
  • Oman opens bids for 1GW battery storage advisory role

    4 June 2026

    Oman’s Authority for Public Services Regulation (APSR) has opened technical bids for a consultancy contract supporting a planned 1,000MW/four-hour battery energy storage system (bess) project.

    The tender seeks independent regulatory, technical and commercial validation services for the scheme. The project is planned with a rated capacity of 1,000MW and a storage duration of four hours, equivalent to 4,000 megawatt-hours (MWh) of energy storage.

    According to a tender board notice, technical bids were opened on 25 May.

    Thirteen companies submitted proposals including:

    • Tractebel Engineering Consultancy (Belgium)
    • WSP International (Canada)
    • CESI Middle East (Italy)
    • DNV Dubai Branch (Norway)
    • ILF Consulting Engineers (Austria)
    • Mott MacDonald (UK)
    • Innovision Engineering Consultancy (UAE) 
    • Sargent & Lundy Abu Dhabi (US)
    • Universal Consulting Engineering (Egypt)
    • TUV Rheinland (Germany)
    • Surbana Consultants Dubai Branch (Singapore)
    • Afry Management Consulting (Sweden)
    • Engineering Systems Group (Kuwait)

    As previously reported, APSR issued the request for proposals in April as part of wider plans to increase the share of renewable energy in the sultanate.

    The sultanate’s first utility-scale solar photovoltaic (PV) plant integrated with battery energy storage (Ibri 3) entered construction at the beginning of the year, comprising a 500MW solar PV plant and a 100MWh bess system.

    Last month, state offtaker Nama Power & Water Procurement Company signed a power-purchase agreement with local firm O-Green for Oman’s first round-the-clock renewable energy project.

    The company is also seeking consultants to provide separate environmental, social and governance and legal advisory services.

    Renewable energy is expected to increase from 4% of the generation mix in 2024 to 30% by 2030, driving the push for more utility-scale storage projects.

    Over roughly the same period, demand is forecast to double, reaching 10 terawatt-hours by 2031.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17106014/main.jpg
    Mark Dowdall
  • Building around the strait

    4 June 2026

    Commentary
    Colin Foreman
    Editor

    The closure of the Strait of Hormuz has turned a lingering, and previously unlikely, threat into reality in 2026. The shutdown of the maritime chokepoint, which is about 33 kilometres wide at its narrowest point, has plunged the global economy into crisis, with fuel prices spiking and fears of energy shortages growing. While diplomatic efforts are under way to resolve the disruption, the GCC’s geographic Achilles heel remains.

    The closure has also highlighted the importance of alternative logistics and energy corridors. Saudi Arabia’s East-West pipeline has enabled the export of 7 million barrels a day of oil from the Gulf coast across the kingdom to the Red Sea, while the UAE has rapidly scaled up operations at Fujairah and directed Adnoc to accelerate development of its 520km West-East pipeline.

    Others have had fewer options. Geographically constrained states such as Kuwait recorded zero crude exports in April, reflecting their near-total dependence on shipping oil through the Strait of Hormuz.

    For the projects market, the crisis is already having, and will continue to have, a significant impact. Ongoing projects are struggling with disrupted supply chains and resulting cost escalation, while future spending is likely to be diverted towards schemes that improve the GCC’s access to markets outside the Gulf.

    For the projects market, the crisis is already having, and will continue to have, a significant impact

    For oil and gas exports, proposed pipeline routes would run south from Kuwait through Saudi Arabia and the UAE and into Oman, enabling shipments from expanded ports on the Arabian Sea. For goods entering the region, the GCC railway scheme has taken a step forward, with procurement starting in May.

    These projects will cost tens of billions of dollars and will take years to complete, which means the events of 2026 will shape the region’s infrastructure priorities for the coming decade.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17105852/main.gif
    Colin Foreman
  • Fitch cuts global airport outlook on Iran war

    4 June 2026

    Fitch Ratings has revised its global airport sector outlook to ‘deteriorating’ from ‘neutral’, warning that disruption linked to the Iran conflict is creating a more challenging operating environment for airports and airlines and clouding traffic visibility into 2026.

    In a note issued on 3 June, Fitch said the conflict has increased uncertainty over “regional airspace availability, airline operations and travel demand”, with implications for route stability and the quality of traffic flows. While most airport operators’ traffic and earnings have remained broadly stable so far this year, the ratings agency expects a softer macro backdrop, a less favourable passenger mix and weaker non-aeronautical revenues to increase sector risks over the next 12 to 18 months.

    The revised outlook is particularly relevant for the Gulf, where major airports have built business models centred on international connectivity, long-haul flying and transfer traffic. Fitch said the disruption is particularly affecting airports with exposure to transfer passengers and internationally connected airline networks — categories that include the region’s largest hubs.

    Hub exposure

    Although the agency did not name Gulf airports specifically, its analysis implies that hubs reliant on long-haul corridors and complex network connectivity are more exposed to “rerouting risk, changing airline capacity decisions and weaker visibility on international demand”. For Gulf operators, that risk is compounded by the potential for further airspace restrictions and ongoing uncertainty around the availability of key flight paths linking Asia, Europe and parts of Africa.

    At the same time, the agency noted that some “Asia-Pacific airports have benefited from the redistribution of transit and long-haul traffic” away from disrupted Gulf hubs. Any sustained diversion of connecting passengers would be material for Gulf airports because duty-free, retail and food and beverage spending is typically stronger among international transfer travellers than point-to-point passengers.

    Fitch’s change of outlook also reflects a broader slowdown in the sector’s growth trajectory. Global passenger growth was strong in 2025 and early 2026, but the pace has started to cool from the post-pandemic recovery period. Fitch pointed to the International Air Transport Association’s latest projection of “4.9% passenger traffic growth in 2026”, a deceleration versus 2025, with early-2026 monthly data showing the slowdown already under way.

    Fitch also warned that non-aviation revenues could come under pressure, particularly where passenger mix shifts away from high-spending travellers. The agency expects a “low single-digit decline in nominal retail revenue for European airport operators” this year, highlighting how quickly discretionary spend can soften when operating conditions turn more volatile.

    Fuel availability and pricing is another risk. Fitch said there is rising uncertainty about jet fuel availability, especially in Europe due to disruption to Middle East supply, potentially increasing airline costs and encouraging capacity reductions. The agency expects fuel reserves to cover the summer months in Europe, even if the Strait of Hormuz remains effectively closed, but warned that winter operations could be more challenging if disruption persists.

    Higher airfares and fuel surcharges could also weigh on near-term demand, Fitch added — a headwind for Gulf airports that have benefited in recent years from strong leisure demand and the restoration of long-haul travel.

    Fitch expects airport performance to become more uneven, with point-to-point leisure airports typically better positioned than large hubs reliant on transfer traffic and international corridors. The ratings agency cited European examples, contrasting airports such as Barcelona or Venice with Heathrow and the Paris airports.

    The same dynamic could play out in the Middle East: airports with a large share of local origin-and-destination demand may be relatively insulated compared with major connecting hubs whose business models depend on stable long-haul routings and predictable network planning by global airlines.

    The risks for the Gulf’s aviation sector were highlighted again on 3 June when Iranian drones struck Terminal 1 at Kuwait International airport, causing significant structural damage. The incident was the third major drone strike on the hub in recent months. On 1 April, a drone strike hit fuel tanks managed by Kuwait Aviation Fuelling Company, sparking massive fires. On March 28, another multi-drone raid severely damaged the airport’s primary radar systems.

    Other airports in the region have been damaged since the conflict began, including Dubai International airport, Zayed International airport in Abu Dhabi and Hamad International airport in Doha.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17105933/main.jpg
  • Iran conflict curbs migrant labour flows to Gulf

    4 June 2026

    The International Labour Organisation (ILO) has flagged early signs that the conflict involving Iran is affecting the Gulf’s labour market. Speaking to CNBC, the ILO’s acting deputy chief, Sher Verick, said departures of migrant workers from sending countries have fallen sharply this year.

    “We don’t yet have numbers about those leaving the Gulf, but what we have are numbers that show that the departures of migrant workers from sending countries are significantly down,” Verick said. “For example, in the Philippines, the departures year on year are down by 78%.”

    Verick said disruptions in the Middle East are preventing workers from travelling to take up jobs and earn income, with knock-on effects for remittances that support household consumption, education and healthcare in sending countries. He added that the ILO would be watching for data on return flows from the Gulf back to Asian sending markets.

    Job risks

    The ILO has also assessed the share of jobs most exposed to conflict-related disruption. “Globally, we see around 15% of employment in that high exposure category, but this is much higher in the Middle East, at over 50%, and in Asia Pacific at around 22% of employment,” Verick told CNBC.

    Sectors most affected include transport, given reliance on fuel and other energy sources, and manufacturing due to supply chain exposure. Tourism-linked activities are also vulnerable, while agriculture is affected by disruption to fertiliser supply and pricing.

    A report by Fitch in early June said the conflict is placing several sectors across the GCC under severe operational and financial strain. Industries including aviation, hospitality, chemicals and residential real estate development face heightened vulnerabilities.

    Airlines are grappling with route disruption and higher fuel costs, while the hospitality sector has seen weaker occupancy amid security concerns and travel disruption. Regional chemical producers face higher feedstock prices, and residential real estate developers risk slower investment, which could dampen employment in construction – a sector that relies heavily on migrant labour.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17105894/main.gif
    Colin Foreman
  • Read the June 2026 MEED Business Review

    4 June 2026

    Download / Subscribe / 14-day trial access

    For decades, the Strait of Hormuz has served as a critical artery of the global energy system. Despite being only 33 kilometres wide at its narrowest point, this strategic maritime passage has traditionally handled around one-sixth of global oil consumption and nearly one-third of worldwide liquefied natural gas trade.

    Following Iran’s effective closure of the strait in 2026, Gulf states have been compelled to rapidly identify and develop alternative transport corridors. This effort extends beyond safeguarding oil exports from the region to ensuring the continued flow of food, consumer products and industrial supplies that underpin the Gulf’s economies. Read more here. 

    June’s market focus is on Iraq, which is entering mid-2026 with the largest project pipeline in its post-2003 history, encompassing more than $420bn in planned and ongoing investments. However, the country faces an exports collapse that could challenge its ability to deliver this ambitious programme.

    This edition also includes our Top 100 report – an annual ranking published by MEED that identifies the 100 largest publicly listed companies in the Middle East and North Africa based on their market capitalisation.

    In the latest issue, we explore why the UAE’s Opec departure fulfils multiple ends; investigate why insurers will only cover a fraction of war damage to oil and gas facilities; analyse Saudi Arabia’s real estate ownership reforms; and examine the first trade deal between the GCC and a G7 nation.

    We hope our valued subscribers enjoy the June 2026 issue of MEED Business Review. 

     

    Must-read sections in the June 2026 issue of MEED Business Review include:

    > AGENDA: Gulf races to reroute trade

    > EXPORT ROUTES: Regional war boosts oil and gas pipeline project activity

    > CURRENT AFFAIRS: UAE’s Opec departure fulfils multiple ends

    INDUSTRY REPORT:
    MEED Top 100
    > Middle East stocks recover unevenly

    > OIL & GAS: Insurers will only cover a fraction of war damage to oil and gas facilities

    > LEADERSHIP: Building the infrastructure that makes net zero possible

    > LEGAL: Saudi Arabia’s foreign property ownership milestone 

    > TRADE TALKS: UK-GCC trade deal talks conclude

    > IRAQ MARKET FOCUS: 
    > COMMENT: Iraq’s reform window narrows
    > GOVERNMENT: Al-Zaidi takes Iraq’s premiership under US shadow
    > BANKING: Financial challenge tests Iraq’s resolve
    > ECONOMY: Iraq enters era of resilience, reform and rising risks 
    > OIL & GAS:     Iraqi oil and gas sector in crisis
    > POWER & WATER: Focus shifts to delivery of Iraq utilities expansion
    > CONSTRUCTION: Momentum builds in Iraq’s post-war construction sector

    > MEED COMMENTS: 
    >     Institutional capital sees past conflict risk
    > Gulf conflict fails to slow Dubai’s projects push
    > Oman steps up hydrogen plans
    > Bidders assess partnership strategy for utilities projects

    > GULF PROJECTS INDEX: Gulf Projects Index resumes growth trajectory

    > APRIL 2026 CONTRACTS: Middle East contract awards

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: Hoping for a long, cool summer

    > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17088038/main.gif
    MEED Editorial