Abstract
The new Kuwait Power Report from BMI forecasts that by 2013 the country will
account for 3.62% of
Middle East and Africa (MEA) regional power
generation. BMI’s MEA power generation estimate for
2008 is 1,178
terawatt hours (twh), representing an increase of 5.5% over the previous year.
We are
forecasting an increase in regional generation to 1,523twh by 2013,
representing a rise of 29.3% between
2008 and the end of the period.
Thermal power generation in 2008 is estimated by BMI at 1,100twh, accounting
for 93.4% of the total
electricity supplied in the region. Our forecast
for 2013 is 1,414twh, implying 35.7% growth that reduces
slightly the
market share of thermal generation to 92.8% – thanks in part to
environmental concerns
promoting renewables, hydro-electricity and nuclear
generation. Kuwait’s thermal generation in 2008 was
an estimated
44twh, or 4.0% of the regional total. By 2013, the country is expected to
account for 3.9% of
thermal generation.
For Kuwait, in 2007 oil was
the dominant fuel, accounting for 55.3% of primary energy demand (PED),
followed by gas at 44.7%. Regional energy demand is forecast to reach 853mn
tonnes of oil equivalent
(toe) by 2013, representing 19.6% growth over the
period since 2008. Kuwait’s estimated 2008 market
share of 3.8% is
set to climb to 4.5% by 2013.
Kuwait is still ranked last, behind Algeria,
in BMI’s updated Power Business Environment rating, thanks
largely
to its modest market size, state control of the power sector and a
particularly low proportion of
renewables use. The power sector is not
competitive, with no appreciable progress towards privatisation.
The
regulatory environment is unattractive. Kuwait is now three points behind
Algeria, so is unlikely to
challenge the North African state over the next
few quarters.
BMI is now forecasting real GDP growth averaging 2.5% per
annum between 2008 and 2013, with the
2009 estimate being a decline of
1.0%. Population is expected to expand from 3.31mn to 3.40mn over the
period, with GDP per capita forecast to rise by 12% and power consumption per
capita expected to
increase by 10% from an already high base. The
country’s power consumption is expected to increase
from an
estimated 41.9twh in 2008 to 47.5twh by the end of the forecast period,
resulting in a broadly
balanced market that, at times of peak demand, will
struggle to provide adequate supply without imports
– assuming 4.9%
annual growth in electricity generation.
Between 2007 and 2018 we are
estimating an increase in Kuwaiti electricity generation of 71.9%, which
is among the highest in the MEA region. This equates to 29.5% in the 2013-2018
period, up from 25.3%
in 2008-2013. PED growth is set to decrease from
42.7% in 2008-2013 to 37.6%, representing 108.7%
for the entire forecast
period. Thermal power generation is forecast to rise by 71.9% between 2007
and
2018. More details of the longer-term BMI power forecasts can be found
in the Appendix of this report.
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