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Kuwait plans 2000 MW of renewable energy

by John Brian Shannon John Brian Shannon

Kuwait Towers at Sunset. Image courtesy of www.itinerarist.com
Kuwait citizens use more energy per capita than 90 percent of the world’s nations. Kuwait Towers at Sunset. Image courtesy of: www.itinerarist.com

Kuwait will invest USD 100 billion on its domestic energy sector over the next 5 years, and some of that spending is earmarked for renewable energy.

Kuwait has embarked on its first renewable energy project and will now be able to export the oil that would have been used to  produce domestic electricity. Solar and wind will produce 70MW for the GCC nation by September, 2016. And by 2030, 15% of Kuwait’s total energy mix will be powered by renewable energy according to a new government policy.

Phase I of the country’s first renewable energy project is already underway and it will be in the form of a 70 MW hybrid power plant with PV-solar, thermal solar, and small wind power, set to come online by Q3 of 2016, in Shagaya, Kuwait – near its border with Iraq and Saudi Arabia.

By 2030 the 2000 MW renewable energy plant will be fully operational and the project will save Kuwait 12.5 million barrels of oil (BOe) per year — and power 100,000 Kuwaiti homes.

Saving 12.5 million barrels (BOe) per year will allow Kuwait to export that same amount of oil at the going rate. (12.5 million barrels of crude oil, is about equal to four of the largest and most modern, fully-loaded supertankers, the TI-class double-hulled supertanker)

Oil prices have been hovering around the USD 80.–100. mark recently, but this will certainly rise and some energy experts see oil rising as high as USD 250. per barrel, mid-century.

For demonstration purposes only, if those four supertanker loads of ‘saved oil’ is priced near today’s USD 90. per barrel ($90. x 12.5 million barrels per year) it means Kuwait will rake in an extra USD 1.12 billion, per year, every year, due to this renewable energy project.

If the oil price shoots up as expected, the government will see even greater benefits. By the time oil hits USD 180. per barrel, this 3-Phase project should be complete — allowing Kuwait to take in USD 2.25 billion, per year, every year, due to this renewable energy project.

Separate from all of the foregoing, is the additional income that could be garnered from those ‘saved’ 12.5 million barrels per year — IF Kuwait  added some value to that crude oil by refining it into valuable products before exporting it, instead of merely exporting it as raw crude oil. Gasoline, diesel, aviation fuel, plastics and synthetic rubber, are all examples of value-added products that can be made from crude oil.

At that point, the relatively small amount of 12.5 million barrels per year could become worth much more than crude oil sold for USD 1 or 2 billion per year. Instead, when sold as finished fuels or plastics, it becomes many billions of dollars contributing to the national GDP of Kuwait.

To extrapolate this further, Kuwait must take out of their yearly oil and gas production, a total of 126 million BOe (barrels-of-oil-equivalent) per year, to power their national electricity grid power grid which has a total capacity of 14,000 MW.

Based on USD 90. per barrel, with 126 million barrels (BOe) saved: If Kuwait switched completely to renewable energy, and instead, exported all the crude oil and gas it burns to produce domestic electricity, yearly GDP could increase by USD 11.3 billion.

Based on USD 180. per barrel, with 126 million barrels (BOe) saved: If Kuwait switched completely to renewable energy, and instead, exported all the crude oil and gas it burns to produce domestic electricity, yearly GDP could increase by USD 22.6 billion.

Based on value-added products made from crude oil, with 126 million barrels (BOe) saved: If Kuwait switched completely to renewable energy, and instead, refined all the oil and gas it burns to produce domestic electricity, yearly GDP could increase by USD 56.7 billion, or more.

Only now, with the recent combination of high crude oil prices and the dramatic fall in the cost of renewable energy has it made economic sense for OPEC nations to consider the switch to renewable energy.

Simply put, OPEC nations can make more money by exporting their oil – instead of burning it to produce electricity for domestic consumption.

Adding value to the ‘saved’ crude oil, means that OPEC nations have the opportunity to make money many times over, when compared to simply exporting raw crude product.

Embracing this new vision can work miracles for GCC economies, which are blessed with plentiful sunshine and wind resources, and already have the technology to refine their crude oil, thereby adding value to the resource, while creating thousands of jobs for the region’s chronically under-employed youth.

Cleaner air for GCC citizens, billions more dollars via value-added exports, and a lower unemployment rate among region’s youth. Now that’s something to celebrate!

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Note:  Kuwait pumps 2.8 million barrels of crude oil daily, totaling 1.02 billion barrels of crude per year. — Salem al-Hajraf, head of energy research at the Kuwait Institute for Scientific Research

Note:  Construction phases are as follows:

  • Phase I – 70 MW.
  • Phase II – 930 MW.
  • Phase III – 1000 MW.

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Planetary Energy Graphic

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U.S. Energy Subsidies

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U.S. Jobs by Energy Type

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Energy Water Useage

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U.S. Energy Rates by State

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Our energy comes from many sources, including coal, natural gas, nuclear and renewables.

As nonrenewable sources such as coal diminish due to market forces and consumer preference, the need for renewable energy sources grows.

Some U.S. states satisfy their growing renewable energy needs with wind, solar and hydropower.

Wind: Texas has the capacity to generate 18,500 megawatts hours of electricity through wind, and expects to add another 5,000 megawatts of wind generation capacity from facilities under construction.

Solar: California’s solar farms and small-scale solar power systems have 14,000 megawatts of solar power generating capacity.

Hydroelectric: Washington state hydroelectric power produces two-thirds of its net electricity.

Information courtesy of ChooseEnergy.com

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