Kuwait raises the bar on clean energy in Gulf

Sun-drenched Kuwait, a desert nation with no solar-power plants and electricity demand that’s growing about 8 percent a year, has set the most ambitious target for using renewable energy in the Gulf region. OPEC’s fifth-biggest oil producer, whose air conditioners run cheaply off state-subsidized oil-fired power plants, aims to generate 10 percent 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. Kuwait is trying free up more oil for export and expand its generation capacity to support increased tourism, manufacturing and home building in a $112bn development program. To meet its clean-energy target, which exceeds the 7 percent goal set by Abu Dhabi in the United Arab Emirates, Kuwait next must gather data on sunshine and wind speeds, al-Falah said. “Renewable energy is a new subject for Kuwait,” al-Falah, who coordinates alternative energy for the ministry, said in an interview at its headquarters outside Kuwait City. “That’s why there’s a lack of information regarding the suitability of renewables for our weather.” While analysts are skeptical Kuwait will meet its target, they don´t question the economic case that underpins it. The Arab country consumed 413,000 barrels a day of oil in 2010, about 16 percent of production, according to the BP Statistical Review of World Energy for 2011. That’s 66 percent more than in 2000, while production increased about 14 percent. In a nation where summer temperatures can top 50-degrees, domestic consumption has more than doubled in the last 10 years as production is little changed. Gulf oil producers need to generate more electricity to meet demand that’s growing an average of 10 percent a year, Jarmo Kotilaine, chief economist at National Commercial Bank in Jeddah, Saudi Arabia, said in March. “We definitely see solar potential in Kuwait,” said Rajit Nanda, chief financial officer for ACWA Power International, a Saudi Arabia-based company that develops electricity and water projects. While Kuwait hasn’t kick-started renewable energy projects, “there’s a lot of peak demand when solar resources are at their best.” Kuwait could then export more fuel and generate higher revenue instead of pumping it into electricity plants, Nanda said. Oil contributed 95 percent of the KD11.89bn ($43bn) in revenue the country recorded for the five months through Aug 31.