A new electricity tariff system based on the energy efficiency of buildings is being considered in Kuwait, the MEED Kuwait Energy & Water Efficiency Conference was told today.
The aim is to encourage electricity saving while countering opposition to attempts to cut government electricity subsidies which now account for more than 95 per cent of the cost of the power consumed in Kuwait.
“Kuwait’s electricity consumption per capita is now 16MW-hours a year,” Ministry of Electricity & Water Ministry (MEW) advisor Mike Wood told the conference. “This is the world’s highest and it will rise on present trends by two thirds in 2030.”
MEW assistant undersecretary for planning and training Meshan al-Otaibi had earlier told the conference that peak power demand would hit 13,000MW this summer and is projected on present trends to rise to 30,000MW in 2030. He said that this trend is unsustainable and that a new tariff system that would lift the price to up to 12 fils a kilowatt hour for heavy power consumers is under consideration.
At present, all consumers are charged 2 fils a kilowatt hour compared with average production costs of 42 fils an hour. Wood said the new tariff would be based on the measured energy intensity of a building. He said this could be easily measured in terms of kilowatt hours a square metre. Tenants and owners that used more electricity than a building’s energy intensity required would be penalised with higher tariffs.
“The proposal under consideration is based on Intensity monitoring with a subsidy reduction for consumption above target value,” Wood said. “You give people a rate of 2 fils (a kilowatt hour) if they hit the target but they pay more if they don’t. It’s simple to apply, it’s socially acceptable and there is a high probability of legislative acceptance.”
Wood said that the proposed new tariff system would counter objections to sharp increases in power bills and address calls for lower-income people and those with large families to be protected against higher electricity charges.
Wood said the need to increase power tariffs as a way of containing demand was increasingly obvious. He said that new homes being built in Kuwait were growing in size and this would intensify power consumption.
“40 per cent of the new houses occupy 600-square-metre sites and 40 per cent have sites of 400 square metres,” Wood said. “They are built by an industry preoccupied by first cost and not long-term cost.”
Wood said that Kuwait is developing new power generation, transmission and transmission capacity to meet demand.
The MEW has updated the building code. Plans for new cities call for the comprehensive use of district cooling and combined cooling and power. Retrofitting projects to reduce energy and water waste and the introduction of smart meters were also on the agenda. Wood said that it is technically possible to reduce the growth in domestic fuel consumption by half by 2030.
Al-Otaibi had earlier told the conference that Kuwait was burning 350,000 barrels a day (b/d) oil liquids in Kuwait’s power stations and that this would rise to 800,000 b/d in 2030 on present trends.
The Kuwait Energy & Water Efficiency Conference is being held in the Jumeirah Messilah Beach hotel in Kuwait City.
The conference is supported by the Ministry of Electricity & Water and endorsed by the Kuwait Foundation for the Advancement of Sciences (KFAS). Drake & Scull and Kimmco are conference sponsors. Commercial Bank of Kuwait (CBK) and Mushrif Trading & Contracting Company are networking sponsors.