KUWAIT CITY, July 18: The Ministry of Electricity and Water’s monthly statistical report for June revealed significant electrical extension activities across various sectors. A total of 536 properties received electrical extensions, with a combined production capacity of 68,164 kilowatts. Private housing led the extensions, with 499 plots receiving electricity.

This sector accounted for a substantial 71 percent of the total extensions, amounting to 48,397 kilowatts. The industrial sector ranked second, with electricity extended to 8 industrial plots. This sector’s total load was 14,475 kilowatts, representing 21 percent of the total electrical loads. The government sector followed, with 8 government plots receiving electrical extensions totaling 2,009 kilowatts, accounting for 2.9 percent of the total loads for June.

The commercial sector saw extensions to 5 plots, with a total load of 1,279 kilowatts, making up 1.9 percent of the total electrical extensions. The investment sector received electrical extensions for 3 plots, totaling 1,033 kilowatts and representing 1.5 percent of the total. The agricultural sector, with 13 plots, had a total load of 969 kilowatts, accounting for 1.4 percent of the total electrical extensions. These figures highlight the Ministry’s efforts to enhance electrical infrastructure across various sectors, reflecting the ongoing development and expansion within the country.

Ministry of Electricity, Water and Renewable Energy said the independent supplier system has become the most accepted option for producing electricity, reports Al-Anba daily quoting MEW sources. The final report prepared by the Ministry’s advisors strongly recommends this system as it is cost-effective, time-efficient, and reduces bureaucracy. The move towards its approval is imminent, especially since the Council of Ministers has repeatedly tasked the Ministry of Electricity to coordinate with the “Fatwa and Legislation” department on this matter.

Partnership
Establishing electricity and water production stations through direct offering or partnership systems can take up to five years or more. This lengthy process poses a significant obstacle in meeting the increasing demand for electricity and water. The government spends over 2.5 billion dinars annually on these services, a cost that continues to rise. The cost of producing electricity from the Ministry’s generating stations is 23 fils per kilowatt, whereas production from a private sector station is around 12 fils.

Annual electricity consumption increases by 5-6%, raising the risk of shortages during peak summer times. This risk is exacerbated by the lack of new generating stations ready for operation until 2028. The independent supplier system, where investors build, operate, and maintain generation stations at their own expense and sell electricity at reduced prices to the state, has proven successful in Gulf countries and globally. This system allows for faster and easier project implementation compared to partnership contracts. MEW aims to meet the growing demand for electrical energy through contributions from international developers who will finance, construct, manage, and operate power production and water desalination plants under the independent supplier system.

This approach has become the only viable solution for financing the construction and operation of these facilities, with the government purchasing electricity or water at an agreed tariff through an energy purchase agreement with the developer. The government will not participate in the capital, and the investor will bear all costs for implementing, operating, and maintaining the project for up to 25 years. This arrangement eliminates risks for the government and fosters competition among companies to supply electricity at the lowest cost, resulting in financial savings for the state.

Implementing the independent supplier system guarantees the provision of electricity and water. Decree No. 207 of 2023 allows the Ministry of Electricity to purchase electricity and water from external sources. The Ministry is encouraged to initiate the offering of solar energy plants under this system at no cost to the state and to announce its need to purchase electrical energy or water. International developers can then submit initiatives through the Kuwait Direct Investment Promotion Authority, with the Ministry selecting the best proposals based on price and timetable.

The challenge of finding new energy sources or building new power plants is significant due to high costs and long timelines. Saudi Arabia, Qatar, and the UAE have successfully established companies to build, manage, operate, and maintain power plants using the independent supplier system, particularly excelling in renewable energy. With the increasing annual demand for electricity, establishing new generation stations remains a critical necessity to meet Kuwait’s needs in the coming years. The independent supplier system offers the best and most appropriate solution to shorten timelines and fulfill the country’s requirements promptly.

By Mohammad Ghanem
Al-Seyassah/Arab Times Staff and Agencies