Kuwait has five power stations (Doha East, Doha West, al-Subiya, Shuaiba South, and al-Zour South) and a total electrical generation capacity of about 9.4 gigawatts (GW). Due to heavy use of air conditioning, reliance on desalination for water, and highly subsidized electricity prices, Kuwait's per capita electricity consumption is amongst the highest in the world, at roughly 14,000 kilowatt hours. Overall, Kuwaiti power demand has been growing rapidly in recent years, and is expected to continue increasing at 7-9 percent a year in coming years, necessitating construction of new generating capacity. According to government estimates, roughly $3.6 billion in further investment is needed to increase generating capacity by 3,000 megawatts (MW) by 2010. Kuwait currently uses roughly 100,000 bbl/d of fuel oil for power generation but hopes to promote greater use of natural gas.

In March 2005, Siemens completed construction of the Al-Zour South power plant, which has a total generating capacity of 1,000 MW. Bids have been solicited for the 2,500-MW Al-Zour North power project, which involves five 500-MW steam turbine generating units and 75 million gallons-per-day of desalination capacity, with seven firms prequalified. The tender for construction of the plant is ongoing in 2006, with the first generating unit expected to be commissioned in 2008 and reaching full capacity by the end of 2009. The next project planned following Al-Zour North is Al-Zour South II, which will also involve 1,000 MW of generating capacity.

Currently, Kuwaitis pay among the lowest prices for power in the world, and the government has urged them to use power more judiciously to reduce waste. Meanwhile, Kuwait continues to expand its national power grid, and has accepted a proposal to link up with the grids of other Gulf Cooperation Council (GCC) countries. This grid linkup will provide each GCC country with additional spare capacity to handle peak demand periods and the ability to sell off spare capacity as available. Kuwait also has discussed broader linkages and cooperation with other Arab countries and its non-Arab neighbor, Iran. In the summer of 2006, Kuwait suffered from widespread electricity and water shortages. In response, the energy minister suspended five senior officials from their posts in September 2006 and ordered an inquiry be conducted.