Kuwait may face power shortage risk next year

KUWAIT: Kuwait faces the risk of being unable to meet its energy requirements during the summer of 2014 and 2015 if a planned mega power plant project was to be delayed, a senior Ministry of Electricity and Water official said in a recent press statement. Undersecretary Assistant for Planning and Training Dr. Meshan Al-Otaibi indicated in his statement on Saturday about completing projects to increase the daily production capacity of the Subbiya power plant and South Zoor power plant by 500 megawatts each, and added that the latter was expected to start generating an additional 370 megawatts before next summer.

However, Al-Otaibi stressed that these steps were still not enough to meet the growing demand of electricity unless the North Zoor power plant was built. In related news, Al-Qabas newspaper quoted official statistics yesterday which suggested that thanks to extremely low tariffs, power generation losses have reached 95 percent. Power tariff in Kuwait is considered the lowest in the world.

The percentage is based on the difference between the annual cost of electricity generation which is pegged at KD3.2 billion, and the average amount of fees collected every year which is estimated at KD160 million, charged at the rate of 2 fils per kilowatt. Meanwhile, statistics showed that the government was spending 38 fils for every kilowatt produced and then sold it for 2 fils, the lowest rate in the region. The rates were as much as 20, 22 and 30 fils per kilowatts in Saudi Arabia, Oman and Dubai, respectively. Experts predict that the production cost would increase to 50 fils per kilowatt in the next few years, putting Kuwait at risk of further financial loss. According to international reports, Kuwait uses 10 percent of its daily oil production to produce electricity and water.

The rate is estimated to increase to 20 percent by 2017, at which point nearly 600 thousand barrels will be pumped every day into power plants to meet the demand that continues to increase as a result of population growth and residential expansion projects. In another development, sources revealed that nine ministries have been found to have spent KD 901.6 million without any authorization on their employees and companies contracted by those ministries. Expenses also included those borne on account of unnecessary medical treatment abroad, in addition to uncollected dues. Out of this figure, KD 280.2 million were wasted by the MEW, KD 206.5 million by the oil sector, KD 115.50 million by the Ministry of Communication, KD 109 by the Ministry of Finance, KD 13 million by Justice Ministry, KD 10.7 million by the Ministry of Information, KD 7.4 million by the Ministry of Public Works, and KD 6.8 million by the Ministry of Higher Education. Sources said real financial regulation was almost absent in these ministries due to corruption indulged in one or the other leader.