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Kuwait requires urgent capacity additions

30 August 2024

Commentary
Jennifer Aguinaldo
Energy & technology editor

Power outages have racked Kuwait’s electricity grid this summer as a result of high temperatures driving peak demand to its highest level, overwhelming available generation and distribution capacity.

This means the oil-rich country has joined several other countries in the region, including Egypt, Lebanon and Iraq, that have resorted to systematic power cuts to save electricity.

Related read: Heatwave causes dramatic Kuwait power outage

This development comes as the procurement process continues to drag on for Kuwait’s next two gas-fired independent water and power projects, Al-Zour North 2 & 3 and Al-Khiran 1, which will have a total combined power generation capacity of 4.5GW.

The procurement process for Kuwait’s first utility-scale solar power plant is also under way, but it is likely to take some time before the contract is awarded and construction is started. 

In the semi-likely scenario that the Al-Zour North 2 & 3 contract gets awarded six months after bids are submitted in September, early power from that plant – and relief from the routine summer power outages – may only become available by the summer of 2027.

As such, it comes as no surprise that various original equipment manufacturers have proposed to build power plants in the country on a fast-track basis.

However, these proposals will likely face the same chronic issues other projects have had to deal with in recent years.  

For one, despite the initial optimism over improved project activity upon the dissolution of Kuwait’s parliament over three months ago, indecision persists for most projects, particularly those requiring foreign direct investments.

A source familiar with Kuwait’s utility sector told MEED they are yet to see any tangible changes in the pace of decision-making related to the country’s independent utility projects.

Until the new power plants are built, Kuwait will have to rely on other options to augment its capacity during the summer by purchasing – as it has this year – emergency capacity from the regional GCC electricity grid or installing power generators at consumer premises or load centres.

The only consolation during the interim is that peak demand comes and goes, typically lasting from June to late August or early September.

This means regular, uninterrupted supply usually resumes as the temperature cools, residents return from their summer holidays and schools reopen.

This month's special report on Kuwait includes: 

> GOVERNMENT: Kuwait navigates unchartered political territory
> ECONOMY: Fiscal deficit pushes Kuwait towards reforms
> BANKING: Kuwaiti banks hunt for growth 
> OIL & GAS: Kuwait oil project activity doubles
> POWER & WATER: Kuwait utilities battle uncertainty
> CONSTRUCTION: Kuwait construction sector turns corner

https://image.digitalinsightresearch.in/uploads/NewsArticle/12432852/main.jpg
Jennifer Aguinaldo

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