The creation of renewables opportunities

Kuwait

Hamad R. Alradhan, CEO of Life Energy, talks to The Energy Year about the challenges that come with developing a business in Kuwait and the state of the local market for renewable energy technologies. Life Energy is a Kuwaiti company looking to secure a sustainable environmental future through smart renewable energy solutions.

What have been the main challenges for Life Energy to develop the business in Kuwait?
The first step for Life Energy has been to build awareness around our renewable energy solutions, given that there was no market for such products when we established the company in 2009. We had to create opportunities by creating the awareness and need for the clients, in such a way, proving the quality of what we offer. We did this by visiting many clients and providing free pilot projects, meaning we were working as consultants. Building on this, our team grew and acquired competencies.
We started with solar, which was the easy part. We did off-grid solar, rooftops, car parks, normal grid-connected types of solutions and streetlights. Our approach was to look for the best technology in the market and bring it here. Rather than simply offering a cost-effective or cheap type of solution, we built a technology- and quality-driven business. Only in this way can one provide a long-term integrated solution which minimises operation maintenance and side costs. These solutions, however, come at a higher price, making it more difficult to persuade clients to choose us.
Thanks to these efforts, Life Energy diverted from advising clients to becoming a provider of integrated solutions, high-quality engineering design and implementation and operation maintenance.

Which key projects did Life Energy contribute to here in Kuwait?
We completed the majority of the projects, roughly 70–75% were crucial ones for country, as the Kuwait Institute for Scientific Research (KISR) programme promoted them. Kuwait started a program in 2012 focused on renewables led by KISR, and we implemented most of the projects for which they issued a tender. For instance, we implemented the first solar gas station and the largest car park in the region. We did a rooftop for schools and built a test facility for KISR to test various technologies, especially thermal and solar-related ones.
Finally, we took on some pilot projects in the oil sector for KNPC and KOC, including the car parks inside the gas filling plant in Kuwait and, recently, 20 gas stations, of which some are new designs, in addition to the standard ones above which we installed solar capabilities.

How mature is the local market for renewable energy technologies in terms of awareness?
On the government side, some are still lagging. For instance, the Ministry of Awqaf, which overviews the mosques, implemented few pilot projects. We approached them to present energy-saving technologies for applications on these mosques. However, nothing has yet materialised.
Nevertheless, other entities like the Ministry of Electricity & Water & Renewable Energy (MEW) have been promoting policies and started to tender field projects, like the new water reservoir project. The situation is also better in new constructions, thanks to energy-saving requirements in public building-construction tenders. The challenge of how to adopt these measures remains. However, people’s interest in renewables is growing, with a shift happening even in the private sector.

What is your assessment of the K-companies’ strategy to grow the sustainable energy market in Kuwait?
The K companies had the strategy in place for a long time, but for sustainability rather than renewables. Despite being a government entity, they are faster at implementing because they can count on a wide range of people with different backgrounds. They intend to replace their consumptions with renewables and have a solid plan to materialise this. However, they are looking for bigger projects and focusing only on producing clean energy rather than saving energy and producing at the same time. That is a significant problem because efficiency is a big chunk of the solution for implementing renewables in Kuwait and any other country.

What are the key challenges in the renewable energy market in Kuwait?
While there are several upcoming projects, they are also quite large, making it difficult for private companies to participate. They are more suited to government players, especially the MEW. We hope the MEW will finally push for some of the launched programs to materialise. The private sector would highly benefit from this.
For most of the projects we see, there are two or three tenders a year, but things do not move forward, and projects do not happen. Therefore, competition in the market is only apparent given that companies cannot grow as they lack experience in the market. Most of them do not have proper engineers, designers or experienced implementers and are thus disqualified when submitting a project.
Another critical problem is the category for qualification still needs to introduce a solar type of qualification in the tendering process. There exist an electrical category and a construction one as well, but none for solar. The result is that most of the projects are done by the main contractors. They are big construction companies; they handle the financial side and have project management experts that hire subcontractors to do the solar side.
That is problematic, making it difficult for any company to come in and try to compete unless they are extremely solid. It is, in fact, essential that when you implement your project with a partner, you can always oversee the facility, the workers, the actual growth and the technology utilised to ensure that the products you deliver are working. We met several times with K people to push for this change to happen.

What are your key goals for the coming years?
Our vision was to become the market leader, and today no doubt we are. We also expanded beyond Kuwait, having opened an office in UAE. Now, we are pushing to share our experience by implementing things abroad as the nature of this market requires. We are looking at Singapore, where we had already opened an office in 2018-2019. Many international companies with manufacturing go there and implement PPA-type projects to produce and sell energy. That is certainly on our radar for the coming years.
At the same time, Kuwait is now focusing on renewable energy, and we are trying to build up the business here again as we recover from the Covid-19 pandemic. For instance, we are targeting the second phase of the Shagaya project. For that, we need to select the right partner that understands the market and the value of Life Energy. Even if we do not participate directly, I am confident we will have the chance to be part of the team that will implement it, as these companies will require local support.

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