Kuwait looks to the cloud as power grid feels the strain

• Bids invited for three power substations
• Needed for Google Cloud storage centres
• Kuwait’s neighbours have reliable energy

Kuwait has invited bids to construct three power substations that will supply electricity to Google Cloud data storage centres, a move that highlights the country’s push to expand its digital infrastructure while grappling with growing pressure on its national power grid.

The Central Agency for Public Tenders has set February 10 as the deadline for submissions. 

The move reflects Kuwait’s effort to narrow the gap with neighbouring Gulf states that have already established large-scale cloud regions through partnerships with global technology firms. 

Saudi Arabia, the UAE, Qatar and Bahrain host major cloud operations supported by resilient energy systems, while Kuwait has faced challenges in maintaining uninterrupted electricity supply. 

Analysts say the push comes amid persistent constraints in Kuwait’s power sector, raising questions about the country’s readiness to support energy-intensive cloud infrastructure as electricity demand continues to rise. 

Those challenges became evident again last year, when power was cut to parts of residential, agricultural and industrial areas during periods of peak demand. The outages highlighted strain on the grid and renewed concerns over the country’s energy security. 

According to tender documents, the deadline for the substations was initially set for January 4 before being postponed to January 20 and later extended to February 10. 

Robin Mills, CEO of energy consultancy Qamar Energy, said Kuwait faced deep-rooted structural challenges in its power sector, particularly a mismatch between generation capacity and demand. 

“The fundamental problem is that Kuwait does not have enough power generation to meet peak consumption, and adding further demand from data centres will only intensify that pressure,” he said. 

Mills said the situation was compounded by high production costs due to reliance on oil and imported LNG, while electricity tariffs remain heavily subsidised. 

“Kuwait has struggled to build new power plants quickly enough,” he said, adding that “reforming subsidies, refurbishing ageing plants and the grid, and significantly expanding renewable energy are all essential parts of the solution”. 

“However, delivering this will require a major improvement in the investment climate if Kuwait is to compete with other GCC countries pursuing ambitious data-centre strategies.” 

Karen Young, a senior fellow at the US-based Middle East Institute, said she did not view Kuwait as “catching up” with the UAE or Saudi Arabia on large-scale data centres. 

She argued that its approach resembled Bahrain’s strategy to attract cloud infrastructure, such as Amazon Web Services’ establishment of a regional hub in Bahrain in 2019. 

Young, who is also a senior research scholar at Columbia University’s Center on Global Energy Policy, said Kuwait’s ambitions were constrained by its power supply. 

She said the country has been importing significant volumes of electricity each month through the GCC Interconnection Authority since March of last year, with no major new domestic generation capacity expected “before 2028″. 

“That leaves Kuwait increasingly reliant on imports, which is not a sustainable foundation for energy-intensive data centres,” Young said. 

The establishment of cloud infrastructure depends on the availability of sufficient electricity. 

Reliable power will be critical once the Google Cloud facilities become operational, given the continuous energy requirements of large data centres. 

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The Ministry of Electricity and Water is working to address technical hurdles to ensure the substation project is completed on schedule, The Times Kuwait reported. 

To secure its long-term power supply, Kuwait is advancing several major projects, including Al-Zour North and Al-Khairan power stations, Phase Four of the Al-Subiya station, and the Shagaya Renewable Energy Project. 

Under an agreement between the government and Google, the Electricity and Water Ministry will build three main transformer stations in Sulaibiya, north of South Saad Al-Abdullah City, and Al-Mutlaa, at an estimated cost exceeding 22 million dinars ($71.5 million).

AGBI has contacted Google Cloud for comment.