Why the most oil-rich country can’t keep the lights on
By David Fickling
IF YOU WANT an image of where the internal contradictions of the fossil fuel economy are headed as disruptive clean energy and a warming planet transform the 21st century, consider Kuwait.
The first real boomtown of the 1960s Arab oil rush, its people have a richer endowment of crude than any other nation on earth. The 101.5 billion barrels of reserves are equivalent to about 23,000 barrels for every resident — more than double the next-placed country. At current prices, this geological inheritance works out at about $4.3 million per citizen.*
And yet Kuwait is struggling to keep the lights on. In what was for decades one of the richest countries on the planet, rolling power outages have become a fact of life over the past two summers.
Electricity was cut to 30 regions in April as temperatures soared and households cranked up the air conditioning. At the peak, about 7.3% of demand went unmet, and the fire service warned locals not to use elevators in case they got stuck in apartment blocks that lost power for hours at a time. Factories were ordered to halt all operations between 11 a.m. and 5 p.m., a situation that persisted for five months until the bans were finally lifted last week.
Blackouts were still happening through May, with outages in 40 residential and 10 agricultural and industrial areas. By June, with temperatures hitting 51° Celsius (124° Fahrenheit), the government was begging residents to turn down air conditioners, install efficient light bulbs, and switch off appliances. Ministers even sent out drones to spot illicit cryptocurrency mining operations.
The simplistic explanation for this would be to tell the story that defenders of fossil fuels trot out to blame any network disruption on renewables. That’s not going to work in a country where 99.6% of generation is fueled by oil or gas, though. Every honest grid manager knows that such problems are never the fault of a single technology, but rather the result of years of miscalculations and under-investment.
In Kuwait, the biggest factors have been political gridlock, combined with a refusal to stare the reality of the energy transition and a changing climate in the face.
Unusually for the Gulf, Kuwait had a parliament with a measure of influence until the emir suspended democracy last year, but infighting has been endemic. With 15 different energy ministers over the past decade alone, decisions on necessary upgrades to creaking infrastructure were deferred until it was too late.
Added to that is the wasteful way the country consumes power. Subsidies of $3,200 per person mean electricity bills cover just 5% of grid costs. Some 60% of energy is used by air conditioners, but the sorts of narrow, shady streets that Middle Eastern people have been building for millennia to protect themselves from the heat are effectively illegal due to outdated building codes for the suburban sprawl of villas where citizens live.
There’s also been a dismal failure to take advantage of all that sunlight by installing photovoltaic panels. Imports in 2024 came to about $1.5 million, less than struggling states such as Liberia and South Sudan. Neighboring Saudi Arabia may be on track to shift 50% of its power generation to renewables by 2030, but even a more modest target of 15% in Kuwait “could be out of reach,” Nishant Kumar, an analyst with consultants Rystad Energy AS, wrote last week.
Kuwait could afford to be far more ambitious. It’s a small country, but about 90% is desert. Roughly 50 gigawatts of solar would be sufficient to meet all existing electricity demand, equivalent to what China installed in April alone. That would cover just 5% of the country, or 900 square kilometers — not a vast area, compared to the 116 sq km recently set aside for a new port northeast of the capital. It would also be cheaper than fossil power, and free up more oil and gas for export.
Such a move would also leave the country less at the mercy of foreign governments. About two-thirds of domestic gas production comes out of the same wells as its crude, so when the Organization of the Petroleum Exporting Countries cuts its oil output quota the emirate must pump less methane, too, forcing it to import from Qatar instead to fuel its generators. The result is a bizarre situation where a petrostate is also one of the world’s biggest LNG importers, bringing in about the same amount last year as the UK, which has 14 times as many people.
Cooler fall temperatures will give Kuwaitis some respite over the months ahead, but in a best-case scenario it will be years before the backlog of decaying infrastructure is fixed. While other Gulf emirates have diversified their economies for a post-petroleum era, Kuwait is still wedded to the dreams of the 1960s oil boom. The economy shrank in three out of the past five years.
Back in 2007, Kuwait was by some measures the richest nation in the world after Qatar and the United Arab Emirates. Right now, it’s barely ahead of Poland and Estonia. At a time when President Donald Trump is waging war on clean energy and even the European Union may be wavering, it’s a cautionary tale of where fossil fuel addiction can lead.
BLOOMBERG OPINION
*About two-thirds of Kuwait’s 4.4 million residents are non-citizen guest workers.
