An Exclusive Feature from bizbahrain, Bahrain’s leading business network.
The Kingdom of Bahrain has embarked on a new era of modernisation and development of the existing power infrastructure to meet the increasing demand due to population growth and industrial expansion.
Known for its astute analysis of economic, business and industry matters, in depth interviews with decision makers and game changers, and extensive coverage of market events, bizbahrain takes a look at the power sector.
The Government has allocated $4 billion to be invested in the power and water sector by the year 2020. In this, the private sector role remains crucial in implementing the strategy especially at a time when the public sector spending is being squeezed due to the record and persistent low oil prices.
The private sector’s participation in the power and water sector reflects the Bahrain Government’s national strategy that clearly advice outsourcing most of the electricity and water production facilities to the private sector. The private sector is responsible for around 80% of the total electricity generation capacity and this has been in the form of Independent Power Production (IPP) or Independent Water and Power Production (IWPP). The official studies indicated that involvement of the private sector would reduce the public exchequer bill, in form of salaries of the staff, low expenditures on maintenance side while bringing more efficiency through an open competition.
Statistically, Al-Dur Electricity and Water Company (ADEWC) owns nearly 31% of the power generation capacity in Bahrain and Hidd Power Company (HPC) and Al Ezzel Power Company (AAPC) owns each nearly 24% of the power generation capacity.
The official believe that the private sector investment in the electricity and water infrastructure is very much safeguarded by the Government through legislation and the government guarantees in the form of the long term power and water purchase agreement with the private companies. Where the Government is trying to enhance the scope of attracting foreign or domestic investments by making the power sector an attractive sector. The power and water sector is facing great challenges including the massive growth in demand and the associated required expansion of the networks and the investments to satisfy these demands to achieve the required performance standards as spelt out in the Electricity and Water Authority’s (EWA’s) corporate plan and the National Strategy 2030.
In line with the national strategy and the guidelines from the leadership for ensuring the provision of basic facilities such as power and water, the power sector faces major challenges such as, maximising the utilisation of available financial resources and reduction of production cost of the electricity unit delivered to the customer as well as reducing the gap between the level of the cost and the average cost of unit sold. There are various opinions that such high demand for power is not only attributable to the ensuing fast economic growth, but may also be as a result of the cheap tariffs which may encourage wastage, with the resulting depletion of natural and financial resources, at the expense of social and economic development.
The Government is required to address the increase in demand for the financial resources available for the sector through strengthening the collection of the debts efforts and the consideration of adoption of tariffs closer to the cost, thereby leading to greater awareness on the part of the consumers of the consumption patterns and enforcement of few initiatives to enhance consumption efficiency, conservation, and load management. EWA is working on introducing various awareness campaigns for the conservation of energy, electricity and water.
The Kingdom of Bahrain’s available generation capacity at the moment is 3922 MW during high summer hot season, with around 600 MW of spare emergency import capacity via the GCC interconnection from neighboring countries, which can be imported in emergencies or via prior arrangements.
Domestic sector consumption makes up around half of the total energy sold in the system. The domestic consumption pattern is very sensitive to the climatic conditions and hence the consumption shoots up during the summer period (May to October). Air conditioning alone is responsible for more than 60% of electricity consumption and this demand is very seasonal during the summer where people use air conditioning on a large scale.
The Kingdom of Bahrain is working on the revamp of the transmission and distribution networks; partially associated with the commissioning of a number of new 66 kV transmission stations and there are a large number of new 11 kV outlets being installed in a timely manner related to the commissioning schedule of the new primary substations.
The distribution network reinforcement over the past three years has witnessed the increase of the 11 kV substations by nearly 1500, new 11 kV substations amounting to an increase of 26%, coinciding with the commissioning of new primary substations in various areas across the country and the associated connection of the feeder outlets.
The planned and emergency maintenance got EWA’s attention with the allocation of BD7.5 million to carry out the maintenance of the distribution networks comprising 8560 distribution substations and 345 running Kilometers of distribution feeders.
The procedures for emergency fault repairs entails the temporary supply using diesel generators with various capacities according to the type of fault and the anticipated repair time. EWA has recently added 169 diesel generators costing BD1.8 million, to its existing fleet, bringing the total number of emergency diesel generators to over 300 units with various capacity sizes.
The issues related to energy and water efficiency and conservation are of paramount importance to the strategy formulation of the Ministry of Energy. Several measures are being undertaken by EWA to achieve the most efficient usage of water and power consumption.
EWA is constantly putting in efforts to implement measures, techniques, laws and regulations to ensure consumers attention to the critical issues of demand side management, and conservation to meet the national demand efficiently.
Decision makers in the Energy sectors in GCC countries realise the high per capita electricity consumption in all the GCC states. This is attributed to several reasons, including rising domestic consumption due to rapid population growth, harsh and extreme summer weather conditions with record high temperatures and humidity, in addition to the rapid growth in economic sectors like industrial and commercial fields.
The GCC needs to focus seriously on two vital themes of sustainability, namely raising the efficiency of production and energy conservation, adjusting the tariffs and devising methods and systems that can better facilitate the options of alternative energies, including renewable energies.
By: bizbahrain