Kuwait has signed a US $2.65 billion contract with General Electric and Hyundai Heavy Industries to build and operate a power plant in the north of the country. The Subbiya power plant, expected to come on line in the summer of 2011, will have a capacity of 2,000 megawatts.
According to a GE statement, GE will supply six gas turbines and three steam turbines. GE will have a US $ 1.3 billion share in the contract. Hyundai will carry out the engineering, procurement and construction of the plant. The plant will come on line in two stages, the first in 2011 and generating 1,300 megawatts, and the second in 2012 generating 700 megawatts.
The US giant beat other pre-qualified firms for the projects such as Germany's Siemens, Japan's Mitsui & Co and Marubeni Corp, Spain's Iberdrola, and Canada's SNC-Lavalin Limited.
Kuwait, with one of the world's highest per capita power consumption rates, has said it plans to boost power capacity to around 16,000 megawatts from 10,000 MW by 2012.
Analysis and forecast: decreasing risk
Kuwait has one of the world’s highest per capita power consumption rates. Rapid development in the past several years has resulted in an increase of power demand of 8 percent. There have been occasions, particularly during the summer months, of electrical shutdowns as demand exceeded supply. Kuwait resorted to buying power from neighboring states, but this has proved not a viable long-term solution. The combined GCC power grid of which Kuwait is part of, will be an important step in addressing chronic power shortages, both in Kuwait and in other GCC states.
As Kuwait plans to increase its power capacity to 16,000 megawatts by 2012 from the current 10,000 megawatts, the signing of the contract for the Subiyya plant is an important step in realizing this. Without such projects and massive and rapid increase in supply, development efforts in Kuwait may be hampered as well as plans to diversify the economy.
