Kuwait has approved plans to build the country's largest power station for US$2.65 billion (Dh9.73bn) in a bid to close its persistent electricity shortage. Bader al Shuraian, the minister of electricity and water, signed the contract with General Electric and Hyundai Heavy Industries late on Sunday to construct a 2,000 megawatt plant at Sabiya that will burn both natural gas and fuel oil.
Kuwait has experienced power cuts in summer when power demand from air conditioning rises. The shortage is a result, experts say, of low investment, poor maintenance and limited gas supplies. "This will be the largest combined cycle power plant in Kuwait and is an important step in our plans to boost power capacity to meet continuing demand, which is projected to grow at about 8 per cent per year," Dr al Shuraian said.
The new plant would "support the continued economic and social development of Kuwait", he said. The final contract for the Sabiya plant comes days after the prime minister, Sheikh Nasser Al Sabah, said the country would double its power-generating capacity over the next five years. Sheikh Nasser on Thursday said Kuwait would add 6,360mw to the existing capacity of 11,000mw in the next two years alone, according to KUNA, the state news agency.
Plans call for a number of new power plants across the country, including one to be built, operated and owned in part by a private company. The government also is exploring the possibility of launching a nuclear power programme. The Sabiya plant is scheduled to be completed by 2012. GE will supply turbines and generators and operate the plant for the first seven years under its share of the contract, which is valued at about $1.3bn. Hyundai Heavy will engineer and build the plant.
The government is under significant pressure to get new power plants online, with residents and industry living under continued threat of power cuts. Power projects have been delayed on several occasions because of excessive bureaucracy, said Robert Bryniak, a Gulf power expert and chief executive of Golden Sands, a management consultancy. "They got caught up in their own bureaucracy in making it difficult for contractors to submit competitive bids," he said.
"They need to move. Power demand has not fallen back along with the recession." Mr Bryniak predicted the government would have more success with its proposal to tender a new 1,500mw plant as a private-sector project that was built, operated and half owned by a private firm, under a structure similar to that used in Abu Dhabi and Oman. "It's a watershed moment for them," he said. "Everyone knows of the difficulty they have had with political issues."
The country's power industry has also been held back by poor maintenance of existing plants and mismanagement, said a power industry consultant who has worked in Kuwait but declined to be named for fear of angering the government. "They have an old grid and they're always try to put it to maximum [capacity]," he said. "Poor maintenance is the problem." The long-term constraint is a shortage of readily available gas. Kuwait last month began importing liquefied natural gas as an interim solution to plug the gas supply deficit.
The ministry of electricity and water has also looked to purchase electricity from Qatar through the newly connected GCC electricity grid. In the longer term, the government hopes to increase domestic production of gas and is weighing construction of nuclear reactors. @Email:cstanton@thenational.ae
