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For Qatari residents: Do you prefer a summer or winter World Cup 2022?

Qatar spends billions of USD to upgrade electricity sector

Written by  Author |   Tue, 01 October 2013 08:08

Qatar's water and electricity sectors are expected to gain significantly from investments worth about $22 billion that are planned for the next eight years, in particular in the five-year period between now and 2018.

The plan includes the setting up of 140 new electricity substations and adding new water lines of more than 810km across the country. Among the new projects on the anvil are five new water reservoirs in as many different locations, which he said would be capable of storing 2,700 MIGD (million gallons a day) of water. 

The current installed capacity of electricity in Qatar is about 8700MW. Additional 2100 mw power will be generated in the next five years, which includes the building of at least two major power stations in the north of the country. A similar boost is also expected to happen in the drinking water sector the availability of which would go up by about 180 MIGD. With the installation of the new capacities, the daily availability of water is expected to cross more than 500 MIGD by 2018.

Kahramaa, Qatar General Electricity & Water Corporation, is exploring the possibility of availing of the thermal and reverse osmosis technologies for the generation of drinking water. More agreements on this score are expected towards the end of 2013. By the end of this year, the water availability would shoot up by at least 40 MIGD with the commissioning of a new project in Ras Laffan area.

Investments worth more than $2.74 billion are expected for such major upgrading of the power sector in the years running up to 2018. All the new 140 sub-stations which are planned for the next five years would be in the capacities between 66kv and 400kv.

On the other hand, Qatar's participation in the GCC's interconnectivity grid project will expand the market for the country's surplus power and, through sharing of regional generation capacity, may also provide more flexibility in meeting future domestic energy needs. Depending on market structure and pricing agreements, a regional grid could add to the value of Qatar's gas and could also provide some decoupling from volatile oil prices.

For the GCC as a whole, there are wider opportunities. Off-peak demand and spare capacity in the region coincides with periods of peak demand during European winters. The extension of the grid using a high voltage line through a suitable gateway would offer the possibility of selling electricity in European wholesale markets.

Given Qatar's low costs of generation and Europe's high peak-load prices, this would create significant value. And with increased power generation in winter months, Qatar could step up its production of desalinated water to replenish its aquifers or allocate it to other uses that have high social value (perhaps in high value-added agronomy).

Qatar's low-cost power also creates potential diversification opportunities in other areas, including in high value, specialty steels, particularly those that are used in the oil and gas business and in automotive industries.

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October / 10 / 2014
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