The double shock caused by the Corona pandemic crisis and the drop in oil prices continue to affect Kuwait's public revenues, this time, to negatively affect its renewable energy projects.

The Council of Ministers announced the cancellation of the project to establish the "Dibdaba" station to generate electricity from solar energy, as part of plans aimed at securing 15% of the country's total energy need through renewable sources by 2030.

The government indicated that canceling the project would contribute to increasing the Petroleum Corporation's focus on its priorities for the next stage, in addition to preserving its position in the oil markets, as well as reducing the financial burden on it and then doubling its ability to finance investment programs.

The "Dabdaba" project was planned to produce 1500 megawatts within the second phase of the "Shagaya" renewable energy complex, which is being developed by the Kuwait Institute for Renewable Energy in partnership with the Ministry of Electricity and Water.

A step backward

Ayman Al-Qattan, head of the Shagaya project, considered the cancellation decision an unexpected and a step backward, adding that the Dabdaba project would have put Kuwait on the map of achievement like all the neighboring Gulf states, taking into account the success of the first phase of the Shagaya project by producing 70 megawatts.

In his speech - to Al-Jazeera Net - Al-Qattan believes that the drop in oil prices has favored the decision of the leaders of the Petroleum Corporation not to enter into such an integrated project, which would have provided 15% of the electrical energy consumed by the oil sector, and to continue instead of it in small scattered projects.

Al-Qattan indicated that the government instructed, upon the cancellation of the "Dabdaba" project - which was scheduled to be implemented by the National Petroleum Corporation in February 2021 - not to stop and transfer it to the Partnership Authority that allows entering into partnership contracts between the public and private sectors to implement the project instead of the oil sector.

He explained that resorting to the private sector to implement renewable energy projects, without incurring any burdens to the state treasury, represents the best solution to get out of the liquidity shortage that Kuwait suffers from due to the drop in oil prices.

Al-Qattan considered that the recent approval by the National Assembly Legislative Committee to establish an independent body for optimal investment in alternative energy is very positive, given what he described as the rich natural wealth represented by the sun belt that covers not only Kuwait but the entire Arab world, indicating that the need imposes the exploitation of this wealth and investment in it. To preserve the country's oil resources.

The "Dabdaba" project was to produce 1500 megawatts in the second phase of the Shagaya Renewable Energy Complex (Qena).

Solutions and Recommendations

The decision to cancel the "Dabdaba" project was not applauded by Dr. Adnan Shihab Al-Din, an energy expert and former director general of the Kuwait Foundation for the Advancement of Sciences, who believed that the step to cancel the project to establish the station was behind procedural and possibly technical reasons related to specifications, he said.

From the strategic point of view, Shihab al-Din believes - in his speech to Al-Jazeera Net - that the tender must be re-offered quickly and that several specialized parties from the private sector in the region and the world are ready to implement the project with local participation, if the reason is the lack of government liquidity to finance it, in exchange for the government's commitment By purchasing the electricity generated from the project.

Since the matter is within his jurisdiction, Dr. Shihabuddin indicated that solutions to achieve Kuwait's aspirations to secure its growing energy needs were presented in a file that included several recommendations prepared under the leadership of the Kuwait Foundation for the Advancement of Sciences, the ministries of oil and electricity, and the Scientific Research Institute, before they were approved by the Council of Ministers.

The most important recommendations were to resort to renewable energy whenever possible from an economic point of view, while the second solution focuses on rationalizing consumption, or reducing energy demand by making an adjustment to electricity prices, taking into account the middle and low-income consumer.

Implementation of this requires amending the laws and regulations governing electricity prices, but Shihabuddin stated that it usually takes a long time due to the tensions that take place in the relationship between the National Assembly and the government, and at other times when the parliament is dissolved and the governments are reconfigured.

Shihabuddin demanded that the Independent Commission for Optimal Investment for Alternative Energy - which the Legislative Committee approved establishing - be given the necessary powers to contract with companies specialized in generating electricity, provided that it at the same time ensure the use of this energy generated at reasonable prices, which makes the Ministry of Electricity a regulator, not a supervisor. Employment.

Dr. Adnan: It is worthwhile to assign the private sector the responsibility of establishing projects in light of the lack of liquidity (Al-Jazeera)

Project barriers

While the demand for electric power in Kuwait is expected to reach 30,000 megawatts per day by 2030, writer and economic researcher Muhammad Ramadan said that many problems have surrounded the "Dabdaba" project since its inception.

And the number of Ramadan - for Al-Jazeera Net - these problems are the first of which are in the Supreme Petroleum Council, which from the beginning had a different opinion of the oil sector that set out to establish that station, so that it is assigned to the private sector in terms of its ownership, operation and provision of the capital cost for it, but the Petroleum Corporation She changed her position and assigned the National Petroleum Corporation to build the station.

In contrast to the bureaucracy, the second problem was embodied in a warning issued by the Audit Bureau against continuing with the "Dabdaba" project, in view of several observations that were monitored in the entirety of the study it conducted on the first phase of the project.

Ramadan said that the Corona crisis and the drop in oil prices, and thus the lack of liquidity, were used to be the right time to cancel the project, as the economic feasibility presented in 2016 did not expect oil prices to drop to current levels.