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Kuwait Power Report Q4 2010
Business Monitor International, Oct 2010, Pages: 47
The new Kuwait Power Report from BMI forecasts that by 2014 the country will account for 4.10% of Middle East and Africa (MEA) regional power generation, with shortages possible at times of peak demand. BMI’s MEA power generation estimate for 2010 is 1,221 terawatt hours (TWh), representing an increase of 4.0% over the previous year (where markets were depressed by the economic slowdown). We are forecasting an increase in regional generation to 1,463TWh by 2014, representing a rise of 19.8% between 2010 and the end of the period.
MEA thermal power generation in 2010 is estimated by BMI at 1,138TWh, accounting for 93.2% of the total electricity supplied in the region. The forecasts for 2014 is 1,333TWh, implying 17.2% growth in 2010-2014 that reduces slightly the market share of thermal generation to 91.1% – thanks in part to environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Kuwait’s thermal generation in 2010 will have been an estimated 53.5TWh, or 4.70% of the regional total. By 2014, the country is expected to account for 4.50% of thermal generation.
Oil will have been the dominant fuel in Kuwait in 2010, accounting for an estimated 61% of primary energy demand (PED), followed by gas at 39%. Regional energy demand is forecast to reach 1,074mn tonnes of oil equivalent (toe) by 2014, representing 16.3% growth over the period since 2010. Kuwait’s estimated 2010 market share of 3.46% is set to remain around this level in 2014.
Kuwait is now ranked last behind even Algeria in BMI’s updated Power Business Environment Ratings, thanks 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 three points behind Algeria, so is unlikely to challenge for promotion over the next few quarters.
BMI is now forecasting real GDP growth averaging 2.84% per annum between 2010 and 2014, with the 2010 assumption being an increase of 2.00%. Population is expected to expand from 2.90mn to 3.10mn over the period, with GDP per capita forecast to rise by 19% and power consumption per capita expected to increase by 7% from an already high base. The country’s power consumption is expected to increase from an estimated 50TWh in 2010 to 57TWh 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 2.5% average annual growth in electricity generation.
Between 2010 and 2019 BMI are forecasting an increase in Kuwaiti electricity generation of 33.2%, which is among the lowest in the MEA region. This equates to 18.8% in the 2014-2019 period, up from 12.1% in 2010-2014. PED growth is set to increase from 16.1% in 2010-2014 to 19.3%, representing 38.5% for the entire forecast period. Thermal power generation is forecast to rise 33% between 2010 and 2019. More details of the longer-term BMI power forecasts can be found at the end of this report.
Kuwait Power Report provides industry professionals and strategists, corporate analysts, power associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kuwait's power industry.
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