In 2004, Qatar had 2,670 megawatts (MW) of installed electric generating capacity and generated 12.4 billion kilowatthours (Bkwh) of total electricity, up 44 percent from electricity generation levels in 2000. All of Qatar’s power plants are natural gas-fired. Electricity demand in Qatar has grown rapidly in recent years, and the government expects demand to continue growing at double-digit rates.

Electricity generation shortfalls led the Qatari government to encourage greater foreign investment through independent power projects (IPPs) and to begin restructuring of the country’s power sector. In May 2000, the Qatari government transferred assets owned by the Ministry of Electricity and Water (MEW) to the Qatar Electricity & Water Company (QEWC), a semi-public body which is 57 percent controlled by local investors and 43 percent controlled by the government. QEWC is responsible for adding new electric generating capacity, and is working on several large-scale power projects with foreign companies such as AES and International Power. State-owned Qatar General Electricity & Water Corporation (known as ‘Kahramaa’) retains control of electricity transmission and distribution activities, and is the sole purchaser of electricity generated in Qatar. The government has considered plans to privatize transmission and distribution functions, but Qatari nationals currently receive free electricity and water supplies, which poses a significant barrier to complete privatization.

The newest IPP is the Ras Laffan B power and water station project, which came online in late 2006. The plant has an initial capacity of 640 MW, which is expected to increase to 1,025 MW as part of a phase two expansion plan by 2008. Ras Laffan B increased Qatar’s 2006 generation capacity to more than 3,500 MW, according to industry sources. The next power station expected to begin operations is the 567-MW Ras Abu Fontas B/2 unit, which is currently being built by QEWC. This power plant is expected online in 2007. In October 2006, Japanese company Marubeni was awarded a $2.3-billion contract for the construction of the Mesaieed power plant, which will be the largest power station in Qatar at 2,000 MW. Marubeni will take a 40 percent stake in the project, while QEWC (40 percent) and QP (20 percent) are also part of the consortium. The Mesaieed station is expected to be completed in 2010.