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Kuwait Power Report Q2 2011
Business Monitor International, April 2011, Pages: 45
The new Kuwait Power Report from BMI forecasts that by 2015 the country will account for 4.23% of Middle East and Africa (MEA) regional power generation, with shortages possible at times of peak demand. BMI’s MEA power generation assumption for 2010 is 1,222 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 1,508TWh by 2015, representing a rise of 18.5% between 2011 and the end of the period.
MEA thermal power generation in 2010 is estimated by BMI to have been 1,140TWh, accounting for 93.3% of the total electricity supplied in the region. Our forecast for 2015 is 1,370TWh, implying 16.1% growth in 2011-2015 that reduces slightly the market share of thermal generation to 90.8% - 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 54TWh, or 4.74% of the regional total. By 2015, the country is expected to account for 4.66% 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 1,114mn tonnes of oil equivalent (toe) by 2015, representing 15.9% growth over the period since 2011. Kuwait’s estimated 2010 market share of 3.46% is set to fall to around 3.41% in 2015.
Kuwait is 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, and is unlikely to challenge for promotion over the next few quarters.
BMI is now forecasting real GDP growth averaging 3.57% per annum between 2011 and 2015, with the 2011 assumption being an increase of 3.40%. Population is expected to expand from 2.90mn to 3.20mn over the period, with GDP per capita forecast to rise by 17% and power consumption per capita expected to increase by 5% from an already high base. The country’s power consumption is expected to increase from an estimated 34.3TWh in 2010 to 41.0TWh 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 3.4% average annual growth (2011-2015) in electricity generation.
Between 2011 and 2020 we are forecasting an increase in Kuwaiti electricity generation of 33.5%, which is among the lowest in the MEA region. This equates to 17.1% in the 2015-2020 period, up from 14.1% in 2011-2015. PED growth is set to decrease from 15.8% in 2011-2015 to 18.4%, representing 37.2% for the entire forecast period. Thermal power generation is forecast to rise 34% between 2011 and 2020. More details of the longer-term BMI power forecasts can be found at the end of this report.
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