Opinion: Half of Kuwait's Electricity from Nuclear Energy... Is It Worth the Billions?

Kuwait faces an economic question that goes beyond meeting its growing electricity needs: how can it maintain energy security while simultaneously maximizing the value of its oil and gas resources?

Every barrel of oil or unit of gas consumed domestically represents an alternative opportunity for export, manufacturing, or avoiding imports. In this context, nuclear energy deserves consideration, not as a foregone conclusion, but as a potential means to supply electricity and redirect some hydrocarbon resources toward higher-value uses.

However, the viability of this approach hinges on a clear equation: do the net economic benefits of the saved fuel exceed the additional cost of alternative electricity, after accounting for investments, financing, and risks?

According to updated data from Ember, Kuwait generated approximately 89.2 terawatt-hours (TWh) of electricity in 2025, with natural gas accounting for about 62 percent and other fossil sources making up roughly 35 percent.

The International Energy Agency (IEA) indicates that electricity demand in the Middle East and North Africa could rise by approximately 50 percent by 2035. It warns that delays in diversifying generation sources could reduce regional oil and gas export revenues by around $80 billion and increase the import bill by approximately $20 billion in that year.

The construction costs for this capacity range between $46.5 billion and $83.7 billion, assuming costs of $5,000 to $9,000 per kilowatt, before accounting for full financing and supporting infrastructure costs. These are preliminary estimates, not the cost of a specific project.

According to a report by Lazard issued in July 2026, the reference cost of electricity from new combined-cycle gas plants ranges from $51 to $129 per megawatt-hour (MWh), compared to $175 to $255 per MWh for new U.S. nuclear plants, and $40 to $98 per MWh for large-scale solar energy.

These U.S. prices cannot be directly applied to Kuwait due to differences in financing, fuel, construction, and operational costs.

Furthermore, it is essential to distinguish between the operating costs of existing gas plants and the construction costs of new plants, while accounting for grid requirements, electricity reserves, and water desalination. A correct comparison is not merely between electricity prices, but between the economic cost of the entire system.

If nuclear electricity replaces 44.6 TWh currently generated by gas, and assuming a generation efficiency of 50 percent, it could save approximately 834 million cubic feet of gas per day.

The theoretical value of this quantity amounts to between $1.5 billion and $3.7 billion annually, at prices ranging from $5 to $12 per million British thermal units (MMBtu).

However, this value does not represent net profit. The calculation assumes that nuclear energy specifically replaces gas-fired electricity, rather than the current mix of gas and oil-based fuels.

It is also necessary to distinguish between imported gas, the conservation of which could reduce the import bill, and domestic gas, which could be allocated for export or industrial use depending on its quality and cost.

Methane can be directed toward methanol, ammonia, and their derivatives, while ethane is suitable for producing ethylene and polymers, extending to advanced materials for packaging, medical, and engineering industries. However, a higher value for the final product does not necessarily imply higher profitability, as advanced manufacturing requires investments, technologies, and competitive markets.

Therefore, the true benchmark is the net value added and return on capital, after deducting all costs and risks.

Assume that the cost of producing gas-fired electricity is $90 per megawatt-hour, compared to $175 for nuclear, when generating 44.6 million megawatt-hours annually. The total cost would be approximately $4 billion for gas, versus $7.8 billion for nuclear, representing an annual difference of nearly $3.8 billion.

At a gas valuation of $8 per million British thermal units (MMBtu), compensating for this difference would require an additional economic benefit of approximately $12.5 per MMBtu above the gas value already factored into the cost of gas-fired electricity. This represents a simplified accounting breakeven point, not an expected industrial return, and it does not account for additional industrial investments, the timing of cash flows, or implementation risks.

A partnership with the Kingdom of Saudi Arabia could offer an opportunity to share investments and risks, develop expertise, establish interconnection, and improve financing and contracting terms. However, its success requires clear arrangements regarding ownership, electricity purchase, and allocation of responsibilities, particularly in cases of cost overruns or operational delays.

The project also demands independent nuclear oversight, stringent safety standards, and robust management of spent fuel, waste, and decommissioning. The Barakah nuclear power plant in the United Arab Emirates provides a valuable regional experience for institutional learning, without assuming that its economic conditions align with those in Kuwait.

The comparison must also include solar energy, consumption efficiency, and the impact of each pathway on supply security, public finances, the trade balance, and return on capital.

I propose preparing an independent economic study within 12 months, through Kuwaiti-Saudi cooperation, that tests various nuclear energy shares, including zero and 50 percent, and identifies the most viable energy mix under clear scenarios up to 2050.

Nuclear energy may be part of the solution, but its viability must be demonstrated through a comprehensive comparison with gas, solar energy, consumption efficiency, and alternative industrial opportunities.