Kuwait is facing significant challenges in its power sector, including intense heat, aging infrastructure, and frequent power outages. These issues have prompted the government to make major investments in improving grid reliability. Currently, only about 1% of Kuwait’s electricity generation comes from renewable sources, but the country aims to increase this figure to 15% by 2030. Natural gas is expected to play a vital role in this transition, serving as a crucial transitional fuel.
According to a recent analysis by Rystad Energy, achieving the ambitious 15% target for renewable energy may be unrealistic. The analysis estimates that renewable capacity will only reach 3.3 gigawatts (GW) by 2030, representing just 7% of Kuwait’s total power generation. A more feasible goal might be 15% by 2035, with renewable capacity projected to exceed 11 GW by that year, accounting for around 20% of the country’s power generation.
Kuwait currently has 21 GW of installed capacity, but only about 17 GW is reliably available during peak demand months due to maintenance and aging plants. The country has witnessed temperatures soaring to 50 degrees Celsius in recent years, leading to demand peaks of 17.7 GW in July. In May, scheduled power cuts began earlier than in previous years, and unplanned outages caused shortages exceeding 1.5 GW during peak demand.
The persistent blackouts highlight the strain on Kuwait’s power system and necessitate imports if outages continue. As the nation modernizes and shifts towards renewable sources, concerns about the reliability of renewables have been raised, especially following events like the 2025 Iberian outage. Nonetheless, it is important not to overlook the potential of renewable energy in Kuwait, particularly solar power. With more than 3,300 hours of sunlight annually, the country has optimal conditions for solar photovoltaic (PV) output, estimated at 4.6 to 4.9 kilowatt-hours (kWh) per kilowatt-peak per day.
As this transition unfolds, natural gas will remain a cornerstone of Kuwait’s energy landscape. Rystad Energy forecasts a 17% increase in gas power generation, reaching 77 terawatt-hours (TWh) by 2030. Consequently, gas production is expected to rise by 38%, while overall gas demand will increase by 30% over the next five years. This demand surge will be met through a combination of enhanced domestic gas production and ongoing liquefied natural gas (LNG) imports, ensuring a consistent supply.
Kuwait is planning to construct five large-scale gas-fired power plants, which will add 18 GW of capacity, raising total gas power capacity to over 32 GW by 2035, up from 14 GW today. On the import side, the state-owned Kuwait Petroleum Corporation (KPC) has secured a 15-year LNG sale and purchase agreement with QatarEnergy, guaranteeing a supply of up to 3 million tonnes per annum.
The shift towards natural gas in power generation aims to reduce domestic oil consumption, which currently constitutes 40% of Kuwait’s energy needs. This transition is crucial for freeing up more crude oil for export, as oil sales are essential to the Kuwaiti economy and government revenue. By prioritizing gas in the energy mix, Kuwait seeks to maximize export earnings and strengthen its fiscal position amid rising domestic power demands.
Currently, Kuwait’s annual gas demand is between 24 billion and 25 billion cubic meters (Bcm), with the power sector being the largest consumer. Approximately 40% of this demand is met through LNG imports, while associated gas production supplies around 35%. This reliance on associated gas makes Kuwait susceptible to OPEC+ crude output cuts, which directly impact gas availability.
To mitigate these risks, Kuwait has invested significantly in non-associated gas through both onshore developments and offshore exploration, achieving notable progress. Non-associated gas now contributes nearly 600 million cubic feet per day, or about 25% of total demand, with all of this volume currently sourced from the onshore Jurassic project in northern Kuwait.
As Kuwait navigates its energy challenges, the dual strategy of increasing gas power generation while investing in renewables may provide a balanced approach, ensuring energy security and sustainability for the future.
