Qatar Power Report Q2 2008

The new Qatar Power Report from BMI forecasts that the country will account for 1.72% of Middle East/Africa regional power generation by 2012. BMI's MEA power generation estimate for 2007 is 1,130 terawatt hours (twh), representing an increase of 5.2% over the previous year. We are forecasting an increase in regional generation to 1,573twh by 2012, representing a rise of 39.3% between 2007 and the end of the period.

Thermal power generation in 2007 is estimated by BMI at 999twh, accounting for 88.4% of the total electricity supplied in the region. Our forecast for 2012 is 1,372twh, implying 37.4% growth that reduces slightly the market share of thermal generation to 87.2% - thanks in part to environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Qatar's thermal generation in 2007 is estimated at 16.5twh, or 1.65% of the regional total. By 2012, the country is expected to account for 1.97% of thermal generation.

For Qatar, gas was the dominant fuel in 2006, accounting for 80.0% of PED, followed by oil at 20.0%.

Regional energy demand is forecast to reach 865.6mn tonnes of oil equivalent (toe) by 2012, representing 27.2% growth over the period since 2007. Qatar's estimated 2007 market share of 3.32% is set to climb to 3.38% by 2012.

Qatar is ranked equal fifth, alongside Saudi Arabia, in BMI's newly revised Power Business Environment rating, thanks largely to its modest market size, low level of energy import dependency and particularly low proportion of renewables use. The power sector is competitive, with good progress towards privatisation. The regulatory environment remains relatively unattractive. While Qatar is currently keeping company with much bigger Gulf neighbour Saudi Arabia, it has the potential to break away and move clear over the medium term.

BMI is forecasting real GDP growth averaging 7.50% per annum between 2007-2012, with the 2008 forecast being 7.7050%. The population is expected to expand from 850,000 to 950,000 over the period, with GDP per capita and electricity consumption per capita forecast to increase significantly (by 27.6% and 42.4%, respectively). The country's power consumption is expected to increase from an estimated 16.7twh in 2007 to 26.6twh by the end of the forecast period, providing a reasonably balanced market that may require occasional import top-ups to meet peak demand - assuming 10.2% annual growth in generating capacity.