The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

BMI View: Nuclear energy may be on the distant horizon for Kuwait, but its near- to medium-term power future depends almost exclusively on oil and gas. Much of planned new generating capacity is gas-fired, with oil often as a back-up fuel. The aim is to make more of the countr? s oil available for export, even if this means a growing reliance on imported gas. Hints at a major renewables programme have yet to convince industry insiders. Low power costs means that project economics are unlikely to attract foreign investors, so Kuwait looks set to go it alone in meeting its growing power demand.

Conventional thermal sources are expected to remain the dominant fuel for electricity generation in the coming years, with many power projects that are currently planned or under construction due to use gas in order to reduce domestic oil consumption and free up additional barrels for export. The electricity and water ministry wishes to more than double generating and desalination capacity by 2017. An estimated US$2.5bn is expected to be invested over the medium-term to cater for the projected power demand until 2015. Renewables could become part of the solution, particularly given the vast solar potential of the desert state.

Key trends and recent developments in the Kuwaiti electricity market include:

• Kuwait aims to generate 10% of its electricity from sustainable sources by 2020, said Eyad Ali al-Falah, assistant undersecretary for technical services at the Ministry of Electricity and Water. To meet its clean energy target, which exceeds the 7% goal set by Abu Dhabi, Kuwait next must gather data on sunshine and wind speeds, al-Falah said.
• During the period 2011-2021, Kuwaits overall power generation is expected to increase by an annual average of 4.15%, reaching 78.83TWh. Driving this growth is an annual 5.70% gain in gas-fired and a 3.39% rise in oil-fired generation.
• Following an increase in 2011 real GDP of an estimated 6.1%, BMI forecasts average annual growth of 4.0% between 2011 and 2021. The population is expected to rise from the current level of 2.82mn to 3.45mn by 2021, and net power consumption looks set to increase from 46.1TWh to 57.0TWh by 2016, rising further to 68.4TWh by 2021. During the period 2011- 2016, the average annual growth rate for electricity demand is forecast at 4.47%, but slowing to an average 3.82% in 2016-2021.
• Thanks partly to the forecast rise in net generation, growth of which barely matches the underlying demand trend, Kuwait could end up having a small, but growing, power supply shortfall. A gradual decline in the percentage of transmission and distribution losses from around 12.4% in 2011 will help balance the market. The theoretical net import requirement by 2016 is put at 0.5TWh, but this could increase to 1.2TWh by 2021.