With its enormous crude oil reserves, Kuwait is the fourth richest country (per capita) on Earth, but the Gulf state urgently needs to drag its power sector into the 21st century if it is to overcome the constant threat of blackouts, writes Tim Probert.
The world’s fourth richest nation in the world should not, perhaps, be prone to nationwide blackouts, but every summer the 3.1 million people of Kuwait live in fear of the dreaded load shedding that afflicts so many far less wealthy nations. With soaring oil prices and the fifth largest reserves on Earth, Kuwait can hardly plead poverty; the Kuwait Investment Authority, which manages the surplus wealth of the Middle East’s fourth-biggest oil producer has at least $213 billion in assets.
Kuwait’s power sector is typified by low prices (Kuwaitis pay among the lowest power prices in the world) and high consumption, a situation that offers little incentive to mitigating the Gulf State’s prodigious per capita consumption but contributes significantly to this ever-present problem of blackouts. Due to heavy use of air conditioning, reliance on desalination for water, and highly subsidized electricity prices, Kuwait’s per capita electricity consumption is among the highest in the world, at roughly 14 000 kWh.
Kuwaiti power demand has been growing rapidly in recent years, and is expected to continue increasing at 7-9 per cent a year in coming years. To address the problem of runaway demand, Kuwait City has taken a series of measures to nudge its citizens into using less power, with some success. Previous efforts to curb consumption included rationing and changing working hours were to no avail.
In June 2007, however, Kuwaiti officials launched a national energy conservation campaign, ‘Tarsheed’, which used television, radio and newspaper advertising to encourage people to conserve energy. Official estimates state that Tarsheed was responsible for an unprecedented and unexpected ten per cent drop in energy use last summer, thus narrowly avoiding the anticipated power cuts.
This year Kuwait was not so lucky, as hospitals were blacked out despite the sending of mobile telephone text messages to ask residents to conserve electricity as the desert summer heat peaks and air conditioning units strained the power grid. As temperatures reached 46 ºC in July, consumption regularly hit around 9290 MW, leaving a dangerously inadequate seven per cent of spare capacity in the 10 000 MW grid.
Although Kuwait is to persist with Tarsheed until at least 2011, it is little more than a sticking plaster solution. In the long term, the Gulf state urgently needs new generating capacity. According to government estimates, roughly $3.6 billion in further investment is needed to increase generating capacity by 3000 MW by 2010.
Kuwaitis live in fear of blackouts every summer
At present, Kuwait has five power stations (Doha East, Doha West, Al-Subiya, Shuaiba South, and Al-Zour South) and a total electrical generation capacity of about 10 GW. Kuwait uses roughly 100 000 barrels per day of fuel oil for power generation, but hopes to promote greater use of natural gas.
The dash for gas
Kuwait is short of gas for power generation during the peak periods of electricity demand in the summer. To this end, Kuwait is trying to strike a deal with Qatar to buy into its liquefied natural gas (LNG) supplies.
Kuwait is building a $150 million import facility for LNG and hopes to begin importing in April 2009, but has yet to source supplies. It plans to import between 14-21 million m3 per day of gas, and is also looking to Iran and Iraq as potential future suppliers of natural gas.
The need for new power capacity is not new. The Emir of Kuwait is well aware of the need for new capacity, but progress has been rather pedestrian. Kuwait does have an ambitious privatization programme in place that includes the ports, public transport and the country’s power sector, as well as the national airline.
In the past Kuwait’s inflexible tender regulations often prevented the state from building new plants even when the ministry had given the go-ahead, but this is being addressed. To attract more international contractors to bid for tenders, the ministry has finally decided to drop a long-standing rule that bidding groups must contain a turbine supplier. In the future, civil contractors will be able to select turbines from a pool of equipment manufacturers.
In tandem with this move, Kuwait announced plans in June 2008 to launch tenders for power expansion worth more than $2.5 billion to meet rapid growth in power demand through 2015.
The 1000 MW simple-cycle plant in Al-Zour South is equipped with eight Siemens SGT5-2000E gas turbines
Khaled al-Wasmi, assistant undersecretary at the Ministry of Electricity and Water, told the news agency Reuters: “The main reason for the new plants is housing plans. The government is building new residential areas where demand is high. These projects will secure electricity until 2014-2015.”
Kuwait City has shortlisted six firms for a tender to build combined-cycle gas turbine units for a northern power plant with a capacity of 2000 MW at Subiya, Wasmi said, declining to give an estimate of the cost of the project, but said it would be worth more than a previous €600 million ($926 million) project to boost capacity at another plant.
The country will launch a second tender by early 2009 to build another power plant in Al-Zour North, with a capacity of 4700 MW, said Wasmi, again declining to give a precise estimate for the cost of the plant, but was expected to cost more than €1 billion. The plant will be built in four phases, to be completed in 2011.
Two of the phases will have capacity of 1500 MW, one of 900 MW and another of 800 MW. The pre-qualified companies for the new northern plant are GE Energy, Japan’s Mitsui & Co and Marubeni Corporation, Siemens, Spain’s Iberdrola Ingenieria Y Construccion and Canada’s SNC-Lavalin. It is anticipated that build-own-operate projects will gain favour.
Kuwait is also building a power station in North Shuaiba with a capacity of 800 MW that will start operation in the summer of 2010. Kuwait is also installing two new gas turbines in its South Zour power station that will add another 320 MW starting in August.
Finally, Germany’s Siemens won the contract to extend a gas turbine power plant in Al-Zour South as part of a consortium in an €600 million deal to increase power generation capacity by 560 MW. That plant will start up by 2010.
In all, Kuwait aims to boost its power capacity to around 16 000 MW by 2012 from around 10 000 MW.
In terms of transmission and distribution, Kuwait has a relatively modern electrical system, with an interlocking computer-controlled grid with multiple redundant circuits to permit automatic switching and avoid loss of service when problems occur.
All power is routed through a control centre at Jabria and distributed using approximately 4000 transformer substations and 4800 km of above and below ground high voltage transmission lines. Fuel is provided to the power plants through pipelines leading from the oil refineries.
GCC grid interconnection
When the $7 billion Gulf Cooperation Council (GCC) power grid is commissioned, Kuwait will be linked with Saudi Arabia, Qatar, Bahrain, Oman and the United Arab Emirates (UAE) within an integrated electricity network.
Work on the project started in September 2005 and is expected to be completed by 2010. The aim of the project is to reduce the cost of power generation in the six GCC states.
The project is being carried out in three phases. In the first phase, an 800 km, 400 kV overhead line will link Kuwait’s Al-Zour power station with Doha, Oman, and a 400 kV submarine line will link Saudi Arabia with Bahrain. The second phase will link the UAE with Oman. The resulting two mega-grids will be joined in the final phase. Once the grid is ready, Kuwait and Saudi Arabia will each receive an extra 1200 MW of power capacity, the UAE will receive 900 MW, Qatar 750 MW, Bahrain 600 MW and Oman 400 MW.
The project has been divided into several work packages: substations, back-to-back HVDC (high voltage direct current) converter stations, submarine cable, overhead transmission lines and the Interconnection Central Centre.
After the completion of the interconnection project, which potentially can be linked to other international grids, such as EJILST (Egypt, Jordan, Iraq, Lebanon, Syria and Turkey) and the UTCE of Europe for energy interchange, the GCC will be able to emerge as a major regional power trading market.
As for consumption, Kuwait has been exploring changes to its current, highly subsidized tariff system but actual reform will very difficult and time-consuming, if not impossible, for the government to implement. Blackouts in a small, highly wealthy nation such as Kuwait, however, are increasingly inexusable.