STATE OF THE MARKET: RENEWABLE ENERGY PROJECTS IN KUWAIT 1

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1 STATE OF THE MARKET: RENEWABLE ENERGY PROJECTS IN KUWAIT Copyright 2015 IQPC Middle East. All rights reserved. STATE OF THE MARKET: RENEWABLE ENERGY PROJECTS IN KUWAIT 1 Produced by IQPC Middle East in association with the Kuwait Sustainable Energy Conference & Exhibition taking place in November 2015 in Kuwait City, Kuwait.

2 The use of alternative energy in Kuwait is important for three reasons: The growing demand for electricity, the high price of oil and the optimal environment for investing in alternative energy as Kuwait is abundant with bright sun and wind. Dr. Bader Al Taweel, Chairman of Renewable Energy at Kuwait Engineers Society The use of alternative energy in Kuwait is important for three reasons: The growing demand for electricity, the high price of oil and the optimal environment for investing in alternative energy as Kuwait is abundant with bright sun and wind. Dr. Bader Al Taweel, Chairman of Renewable Energy at Kuwait Engineers Society Hydrocarbons remain at the heart of Kuwait s economy, as they account for more than 90% of the state s GDP and 80% of government revenues. Oil demands for both export and domestic power uses continue to rise as well, meaning that its uninterrupted production will continue to be a critical consideration for the government in years to come. However, overreliance on oil is a problem that the majority of governments in the GCC are aiming to mitigate as they turn increasingly to renewable sources of energy for their sustainability and environmentally friendly benefits. Kuwait attempted its first Renewable Energy Programme in by installing a number of solar facilities which were neglected when the programme was abandoned due to the expense of materials and operations. 1 The price of renewable technology has fallen quite dramatically since then, prompting both public and private sectors in Kuwait to take another look at their feasibility. Domestic energy demand is growing at a rate of 6-8% each year, according to the Ministry of Electricity and Water (MEW), making the addition of renewable energy sources to Kuwait s national capacity more valuable and vital than ever. With energy demands set to triple by 2030 and Kuwait completely dependent on the burning of fossil fuels for power and desalination purposes, the MEW hopes to achieve a rate of 10% of its national energy capacity through renewables by 2020 and 15% by Renewable Energy Projects Recently Completed and Under Construction Salmi Mini-Wind Farm Location: Salmi (West of Kuwait City) Capacity: 2.4MW Energy type: Wind Completion Date: 2013 The Salmi Mini-Wind Farm was established to test and measure the performance of small sized wind turbines. The farm is designed to operate both on and off-grid, while serving telecommunication towers in remote areas as well as the fire brigade station in Salmi. The farm is located near the future selected 1 Oxford Business Group, Kuwait: New renewable energy project in the works, 03/07/ Kuwait Institute for Scientific Research, Innovative & Renewable Energy Program (IRE), 01/07/ STATE OF THE MARKET: RENEWABLE ENERGY PROJECTS IN KUWAIT 2

3 site of the first large scale (70 megawatt) multi-technology Shagaya Renewable Energy Park a government initiative currently being managed by the Kuwait Institute for Scientific Research (KISR). Shagaya Energy Park Location: 100 square km site located west of Kuwait City Capacity: 70MW by 2016, 2000MW by 2030 Energy Type: Wind, solar thermal and photovoltaic Estimated Completion Date: 2030 Shagaya Energy Park represents the Kuwaiti Government s long-term ambitions of securing a significant renewable energy capability by the year 2030 in order to contend with rising domestic energy demands and keep additional crude oil resources for export. This government-funded facility is currently under the supervision of KISR who are dedicated to exhaustively testing solarthermal, photovoltaic and wind energy technologies in order to determine their feasibility for further deployments across Kuwait. The first phase of the energy park is almost complete and by the end of 2016 it will boast a 70MW capacity with a 50MW solar-thermal plant, 10MW PV facilities and a series of wind farms producing 10MW. 3 By the completion of phase 3 in 2030, Shagaya will be an entirely different prospect, with a total renewable energy capacity of 2GW provided by the completed array of solar, PV and wind facilities. Ultimately, the addition of this energy capacity to the Kuwaiti national grid is estimated to save the oil equivalent of 12 million barrels annually. 4 The project has been split into three parts: 10 MW wind energy, 10 MW PV, and 50 MW thermal, equipped with 10-hour energy storage that will let the plant work even after sunset. This is the mix that we hope will perform better under our harsh climatic conditions in the Kuwaiti desert. Dr. Salem Al Hajraf, KISR s Renewable Energy Program Manager, said during the prequalification meeting of the Shagaya project last October. Currently, a total of 37 international renewable construction firms are preparing bids for elements of the energy park s development. Eight groups are bidding for the solarthermal plant, 13 for the PV project and 16 for the wind farms. Kuwaiti officials have declined to announce total cost estimates for the project or to fully identify all of the bidders. 5 Al Abdaliya Solar Plant Location: Al Abdaliya Desert, south west Kabad region Capacity: 280MW Energy Type: Concentrated Solar Power (CSP) Estimated Completion Date: 2017 The Al Abdaliya solar plant is the most advanced solar energy facility of its type in Kuwait. After a lengthy feasibility study in 2007 by Japan s Toyota Tsusho Corporation, a joint development partnership to bring the 3 Photovoltaic Markets and Technology, Kuwait opens bidding for first phase of 2 GW clean energy park, 13/06/ Ibid 5 Ibid The project has been split into three parts: 10 MW wind energy, 10 MW PV, and 50 MW thermal, equipped with 10- hour energy storage that will let the plant work even after sunset. This is the mix that we hope will perform better under our harsh climatic conditions in the Kuwaiti desert. Dr. Salem Al Hajraf, KISR s Renewable Energy Program Manager STATE OF THE MARKET: RENEWABLE ENERGY PROJECTS IN KUWAIT 3

4 project to life was agreed between the Partnership Technical Bureau (PTB) and Ministry of Electricity and Water (MEW). 6 At a combined construction tenders and development cost of $3.27 billion, the Al Abdaliya plant will represent a major step forward in Kuwait s renewable energy capability aims. Its 60MW advanced solar trough collector will be part of the plant s 280 MW Integrated Solar Combined Cycle (ISCC) system. 7 Umm Gudair Field PV Plant Location: Umm Gudair Capacity: 10MW Energy Type: Photovoltaic Estimated Completion Date: End of 2015 Late last year Spanish energy facility developer Gestamp Solar signed a $28 million investment deal with the Kuwait Oil Company to build the state s first full utility-scale photovoltaic plant. Once completed by the end of 2015, the facility will be capable of producing 10MW of concentrated PV energy while adding to the test data of the PV facilities at Shagaya Energy Park. This should help further the ongoing feasibility studies into PV energy that will determine the likelihood of additional development of similar facilities in Kuwait. 8 The facility will have more than 32,000 and 12 transformation centres. Gestamp Solar estimates annual electricity production to reach 17,600 megawatt hours, saving on the emission of 9,100 tons of CO2. Gestamp Solar has developed, constructed and operated solar power plants in the US, India, South Africa, China, Japan, Spain, France and Italy to produce a total of 500 MW of solar energy projects worldwide. 9 This facility will be their first in the Middle East and Kuwait specifically, signifying the increasing international interest in the kingdom as its renewable energy ambitions are widely known. Chevron Solar Oil Extraction Project Location: Wafra field, Partition Zone Capacity: N/A use in oil production Energy Type: Solar and natural gas Estimated Completion Date: 2017 This pilot scheme by Chevron envisages the use of solar energy for enhanced oil recovery. By combining solar energy in conjunction with burning natural gas to produce the steam needed to pump the crude oil at Wafra in the 50/50 owned Partition Zone between Kuwait and Saudi Arabia. 10 This scheme is intended to rectify declining onshore oil production rates at the site which have dropped to 220,000 barrels per day. By augmenting the oil recovery rates using cleaner energy each barrel recovered in such a way will be available for upgrading, exporting or use in a planned refinery in Kuwait. 6 CSP Today, Kuwait s Solar Journey comes to Light, 12/05/ Ibid 8 Photovoltaic Magazine, Gestamp Solar signs $28 million contract with Kuwait Oil for 10 MW PV plant, 06/10/ Ibid 10 Clean Energy Authority, Kuwait becoming next mid-east country to harness the sun with solar, 15/05/ STATE OF THE MARKET: RENEWABLE ENERGY PROJECTS IN KUWAIT 4

5 Fuelling a Greener, Cleaner Kuwait The Kuwaiti Government is highly aware of the burgeoning energy demands being placed on its current infrastructure as the kingdom s population grows and rapidly becomes more urbanised. It is equally aware of the political and environmental dangers of relying on the production of crude oil to meet these rising domestic demands. While production of oil in Kuwait is ramping up from an average daily production of 3 million barrels to an estimated rate of 3.2 million bpd, this is not the government s only provision for the country s future needs.11 Together, these renewable energy projects listed above may represent a relatively small percentage of Kuwait s national energy capacity in their initial stages. However, once they are completed and fully operational, ultimately they should prove to be enablers for significant investment in renewable facilities throughout the kingdom over the course of the next 15 years. technologies. After completing its relatively modest initial phase the expanded facilities being designed will be able to bring Kuwait much closer to its goal of achieving 15% renewable energy capacity. Already the scale and diversity of competing bids from international renewable project developers for involvement in Shagaya s future demonstrates the potential for investment in the state s renewable energy sector. With a firm national target in mind and renewable energy technologies becoming an ever more attractive prospect due to falling prices and improved efficiency rates, Kuwait may quickly become a market leader in the GCC for renewable energy development. Shagaya Energy Park in particular has been designated as the national vehicle to drive analysis of renewable energy feasibility and ultimately encourage investment in the latest wind, solar and PV STATE OF THE MARKET: RENEWABLE ENERGY PROJECTS IN KUWAIT 5

6 Sources: GN_ _180808/ us327_m STATE OF THE MARKET: RENEWABLE ENERGY PROJECTS IN KUWAIT 6

7 The Kuwait Sustainable Energy Conference & Exhibition has been put together to support Kuwait s 2030 energy vision to increase energy supply from renewables to 15% and reduce energy usage per capita by bringing together key regional and international industry players to help formulate strategies, discuss the latest case studies and benchmark global best practices. The conference will serve as a vital platform to discuss both strategic and technical solutions for energy efficiency and power generation. In addition, the exhibition will facilitate networking and demonstrate the very latest technologies for renewable energy, building management systems and insulation plus power quality improvement. Visit for more information. Copyright 2015 IQPC Middle East. All rights reserved. This document may not be copied, published, or distributed, in whole or in part, or modified in any way, including by removing the copyright notice or references to IQPC Middle East, without the written permission of the copyright owners. This document and the information contained herein is provided on an AS IS basis and IQPC Middle East disclaims all warranties, expressed or implied, including but not limited to any warranty that the use of the information herein will not infringe any ownership rights or any implied warranties of merchantability or fitness for a particular purpose. Publisher contact details: Loy Pinheiro IQPC Middle East enquiry@iqpc.ae STATE OF THE MARKET: RENEWABLE ENERGY PROJECTS IN KUWAIT 7