Potential of Deregulation of the Electricity Sector in the State of Qatar - Essay Example

? An analysis for the potential of Deregulation of the Electri Sector in the of Qatar Table of Contents Background 2. Literature Review 3. Research objectives 4. Methodology 5. Plan of work 6. Ethical Considerations 7. Bibliography Background Basic purpose of this research is to find an ideal structure for the electricity sector in the state of Qatar. This topic is not only of interest for the researcher, but is chosen also because it is a very challenging topic. No similar research has been done so far about Qatar. Similar studies have been done for UAE, KSA and even Oman, but no research has been done about Qatar so far. The concept under study is internationally an important one. State of Qatar is locally known as Dawlat Qatar. Capital of Qatar is Doha. Area of Qatar is 11,437sq. km. Population of Qatar, according to 2010 census is 1.5 million. Arabic is most spoken language of Qatar and Islam is the major religion. Major exports are oil and gas. Passage of Gulf disconnects Qatar from a neighboring island called Bahrain. Meeting of Islamic Conference and World Trade Organization is hosted by Qatar. Qatar is three plus from Greenwich Mean Time (Scott, 2011). Qatar is located on Persian Gulf. The shape of land is in rectangular shape, just like palm of human hand. Southern boundary of Qatar is shared with Saudi Arabia, the other three sides of the small Qatar Peninsula meet Persian Gulf. There is an island on west of Qatar which is called as Hawar Island. Both countries Bahrain and Qatar claims its nationality. The resource of Water due to the coastal area generates number of opportunities. These opportunities include fishing, trade route from sea and pearl diving (Chaddock, 2008). The currency of Qatar is Qatar Riyal. The estimated GDP of 2011 is QR153.73bn. The increase in GDP is 41.8%, as compared to 2010 statics. In 2010 it was QR108.42bn. GPD share of world total in 2010 was 0.2%. The estimated value of GDP share in 2015 will be 0.24%.Purchasing power parity of GDP in 2009 was US$ 109,881. Composition of GDP in 2009 per sector includes 0.1% of agriculture, 68.4% of industry and 31.5% of services. The increase in GDP value is due to the increase in production of natural gas. The prices of energy resources are increasing rapidly (Scott, 2011). The highest number of vacancies in employment sector is related to Oil and gas industry. Examples of posts are Rotating Equipment Engineer, Terminal Supervisor, and Mobile Concrete Pump Operator and many others. Least job opportunities are available in retailing services and IT related jobs (Chaddock, 2008). Estimated percentage of literacy in 1985 was 74%. The percentage increased to 81% in 2000. Centre for eliminate literacy rate was formed in 1954 in Qatar. There were seven schools in 1956, which could cater to the requirement of 614 students. By paying utmost attention to this sector, literacy has increased dramatically. Elementary schooling is of four year period in Qatar. Illiterate students were educated under this program and were granted certificates. Incentive allowance is given to such students, which was QR150 per month (Guides, 2010). The estimated population in 1998 was 579,000. 20% among this population was Qatari. The remaining population is of foreign workers. The population living in urban areas is 91.4 % and the remaining 9.6% lives in rural areas. The total population is an imbalance. The number of males is greater than females. Basic reason is that the foreign workers are not living with their families, as they come alone. The type of visa allotted to foreign workers is work visa, which are temporary visas. Most of the foreign workers come from Pakistan and India (Chaddock, 2008). Production The production of electricity in 2008 was approximately 4263 Megawatts (MW). It is assumed that in 2011 it will double and increase up to 8707 MW. These values prove the development of electricity sector in Qatar. The number of substations of high voltage has increased to 139 in 2008. By the turn of century there were 87 substations in Qatar. The excepted target of substation is 269 in end of 2011 (Scott, 2011). The distributed substations, which are the primary stations, also increase high voltage transmission; the number of distributed substations is more than 8000. The goal is to build 10000 distributers till 2011. This increase in sub stations helps the economy of Qatar to fulfill their activities in a more convenient and perfect manner (James). Cables & OHL The numbers of substations has increased. Cables are used to transmit electricity. The values of voltage in OHL network are 11, 66,132 and 220. All these quantity are measured in kV. In 2006 the length of cable which is double circuit has increased to 1064km. The length of OHL is around 1820 km. The investment done in sector of electricity is US$9.64 billion (McKinnon, et. al., 2010). NCC & DCC KAHRAMAA’s NCC monitors also manage the electric transmission in Qatar. Duty of DCC is to distribute and manage electric supply. Both of these centers are operated by experienced staff and they are highly qualified (Kemp, 2009). Electricity Expansion Projects The expansion of power stations is done by placing complex power equipment in different substations. This activity is performed by the employees of KAHRAMAA. They are making the electric power system highly developed and dependable as well. Many international companies are interested in the project launch of Qatar Electricity Transmission Networks. There basic goal is to expand their transmitted network. The projects of KAHRAMAA are considered as the largest projects in the world. Phase VIII was the largest project of network expansion. The contracts of this project are worth US$ 3.5 billion. Phase IX is the next upcoming network project. KAHRAMAA has also decided to expand the network of Phase VIII. Their technical department is responsible for tracking deadlines (Scott, 2011). GCC Grid KAHRAMAA has decided to join the Interconnection Grid of GCC Electricity. Electric Stations which transmit 400 kV, cable circuits, overhead lines, and NCC development projects are in the process of construction. They also ensure that completion of project is done on the required time. Electricity Demand In last five years the demand of Electricity in Qatar has increased. Every developed and developing country needs electricity to prosper. The increase in amount from 1988 to 2007 is from 941MW to 3550MW. The last recorded figure is of 2008 and the requirement is 3990MW. The increase in use of electricity is also increasing per capita figure of income and electricity usage. Increase in this figure is from 12.963 kWh in 1997. Total number of customers has also increased. The increased number of customer needs more production. In the last few years, from 1998 to 2007, the requirement has increased from 132.429 to 191.476. This increase in number of consumers has resulted in increased demand and supply of electricity (Kemp, 2009). Basic target of the researcher is to research and find the best suitable structure for electricity production and management in Qatar. It will not be easy to regulate electricity sector in Qatar. Few of the problems that might come in the way of this research include: Presence of subsidiaries in this field. There is no regulator of electricity sector in Qatar In the presence of subsidiaries, highly sophisticated modeling is required Another problem to be faced while conducting this research is that in absence of deregulation education, it is difficult to conduct a survey Electricity is free for Qatar Nationals. Literature Review Energy Resources in Qatar: There are several energy resources used by countries to fulfill their elementary needs. These elementary aspects are required to run a country and such countries compete with other countries side by side. Energy resources include wind potential, Coal reserves, solar potential, Reservoirs of Natural Gas and Oil. Oil is the most required and has high demand in market. It is considered as a golden asset of a country (ESTIF, 2008). The use of Wind Potential is zero in Qatar. As other energy resources are available in abundance. Value of Solar Potential is 32,966,799 MWh/year. The rank was 161st in 2008. This is recorded by NREL. According to EIA in 2008, the reservoir of coal is not available in Qatar. The shortage is in millions. Qatar has quiet large Natural Gas Reserves. The value of reserves is 25,470,000,000,000 Cubic Meters (cu m), third biggest reserves in the world. It was recorded by CIA World Factbook in 2010. CIA World Factbook also calculates the reserves of oil. Those are found to be 25,410,000,000Barrels (bbl). Quantity of reservoirs is 12th in comparison to other countries of the world (Scott, 2011). In Qatar, oil was discovered in 1935 and was produced by Qatar Petroleum. The company digs high quality of petroleum. Increase in production of oil has resulted in removal of its name from the list of poor economies. Oil production makes 62% revenue total of government. The exports of LNG started in 1996. Qatar is accepted as largest exporters of LNG gas (Mills, 2003). Qatar comes on 15th rank in exporters list of crude oil. It had around 15.2 barrels of oil in 2009. It is also an active member of Group of Petroleum Exporting Companies. Most of the oil is exported to Asian countries. Qatar is the largest provider of energy resources to Japan. It is third largest producer of gas. RasLaffan use gas tankers to export gas to the world and the reaming Gulf States with the help of gas pipelines. Qatar got the third largest reserves of natural gas and 15% of the total world’s share. The exports of LNG are operated under Qatargas. RasLaffan has decided to increase the production capacity by 2014 (Scott, 2011). Hydropower is a process from which electricity is produce with the help of water. Water runs turbines and produces electricity. In Qatar this energy resource is not utilized. The main reason behind this factor is that the Qatar is rich in availability of petroleum and gas. They are the major fuels used in this country. The quality of oil is high as Qatari oil has few impurities. Thus hydroelectric potential is not used to produce electricity in Qatar. Oil and gas reserves are more than enough for Qatar. They easily fulfill their requirement and also export to other countries. Most of energy resources of Japan are fulfilled by Qatar. Qatar Petroleum controls the companies of petroleum in country. Qatar Petroleum overlooks exploration of oil, production and refining of petroleum, transport, and storage. Potential of Deregulation of Electricity sector in state of Qatar: Total Mega Watt electricity produced by Qatar is 7,881. This value is up to the mark and fulfills the requirement of electricity. At the present the requirement is 6,100 MW or may be slightly more than this. Ras Girtas project is about to complete and the total expected output will be 2,730 MW. Due to this project power generation will be increased quickly. Production can exceed 9,000 MW. At the current moment, the country is not facing any shortage in electricity. And the estimated calculation gives a clear idea that the country will not be facing any shortage till 2015, until and unless any natural disaster or huge human error occurs. Development in electricity sector in Qatar is expanding like a rapid fire or on the speed of light. This will be one of the hot topics in coming years. In 2010 to 2014 the consumption rate is also expected to increase up to 15%. The estimated value of electricity power production is about 90.7%. This amount is considered as the highest in MEA region. Equations which can be concluded after viewing this percentage say that it will be 37.7% from 2015 to 2020. KAHRAMAA or Qatar General Electricity and Water Corporation are the only company which transmit electric power and distribute with help primary sub stations. Water distribution is also managed by KAHRAMAA. The production rate of electricity gives a clear idea about the perfect implementation of best practices and strategies in this sector. The technology of GIS will be introduced in electric sector for the better performance. The increase in demand of electricity is most common and essential issue in the world. All the machinery and systems are running with the help of electricity. Electricity is one of the basic necessities of life and is acting as oxygen in this era. This is a challenge every county is facing to fight for the survival in this world with the help of expensive yet necessary product in life (Chaddock, 2008). KAHRAMAA is managing its own records in proper data base management system. The database maintained by KAHRAMAA is a GIS database. The records of GIS data base include transmission of electricity over network, proper and required distribution of electricity in all sectors and the electric network which are defined and properly explained. Other public data bases are also accessed by GIS database. Public data base stores the values of topography, roads, parcels, imaginary reading and others. GIS data base is deployed on Citrix servers. A Citrix server includes the functionalities of creating Desktop as a server (Scott, 2011). Business world is changing. Globalization has a deep impact on the way business is don in the current era (Symon, et. al. 2000). With the increase in population, electricity demand, and future developments Qatar needs a centrally planned system of electricity distribution. Research objectives The objectives of my research, in a nutshell, are as follows: Instructed to limit the objectives to 4 not 5. a. To study the barriers to promoting regulators b. To study the underlying reasons of ‘Why potential of deregulation has not been discovered so far’. c. To research if there has been any improvements in the existing technology to make it cost effective solution to cater to the whole energy needs of a house or small business. If not, what are the constraints and need for improvements. d. Finding the economically viable solution for small businesses. How to make it practically viable for small business and households, and how it can be taken to masses. Methodology Anderson (1986) defines the qualitative approach as a way to gaining insights through discovering meanings by improving our comprehension of the whole. Any research where findings are not produced through statistical analysis can be a qualitative, interpretive research (Cassell, 2006). In my case, I need to do an in-depth exploratory study to establish the underlying reasons. As the qualitative methods answer the ‘why’ questions (Biggam, 2008); they provide justification for my research objectives. The qualitative methods are closely associated to the interpretive philosophy (Biggam, 2008), which implies that my underlying research philosophy would be Interpretive; where human interpretations and observations are important. The research approach I adopt will be inductive as is the case with Phenomenology. I will explore the case studies and other secondary data which will lead me to reach to conclusions based on the available facts and figures and a solution to the problem will be reached through induction. Data will be collected both through primary tools (Survey conduction through questionnaire) and through secondary means. Simple statistical techniques and mathematical models will be used to convert qualitative data into quantitative results. Plan of work: My plan of work to finish this research is: Planning of my research: 1 week Literature Review: 4 weeks Data collection through interviews and through secondary sources: 6 week Model structure and analysis performance: 3 weeks Result compilation: 2 weeks Reporting and editing for final submission: 8 weeks Ethical Considerations While collecting the data, it will be ensured that no confidential/classified information offered by the companies is misused. Official permission from electricity authorities will be taken in writing to use their data. The data will be protected. Names of the participants in my primary data collection interviews/survey will not be displaced in any situation. The company data and any personal information collected during this research will be safe guarded carefully to ensure no information theft or misuse of information. Bibliography Anderson, P.F. (1986) ‘On method in consumer research: a critical relativist perspective’, Journal of Consumer Research. 13(September) pp. 155–73. Biggam, J. (2008) Succeeding with Your Masters Dissertation: A Practical Step-by-Step Handbook. Buckingham, GBR: Open University Press. Cassell, C. (2006) Qualitative Methods in Management Research. Bradford, GBR: Emerald Group Publishing Ltd. Chaddock, D. (2008) Qatar. Interlink Publishing Group. Chiras, D. (2006) The Homeowner's Guide to Renewable Energy. New Society Publications. Gabriola Island, BC. European Solar Thermal Industry Federation (2008) Solar Thermal Markets in Europe, Trends and Market Statistics 2006. Brussels: ESTIF Publications. Guides R. (2010) Rough Guide to the energy crisis. Rough Guides publications. James, N. [no date] Qualitative Research Methods[Online]. Available at: http://wilderdom.com/OEcourses/PROFLIT/Class6Qualitative1.htm [Accessed: 22 November 2010]. Kemp, W. (2009) The Renewable energy Handbook. Aztext Press. Tamworth, Ontario McKinnon, A., Cullinane, S., Browne, M. & Whiteing, A. (2010) Green Logistics: Improving the Environmental Sustainability of Logistics. London: Kogan Page.  Mills, D. (2003) ‘Advances in solar thermal electricity technology’, The journal of International Solar Energy society. 76 (January: 40238) pp. 19-31. Scott, A. (2011) The oil kings: How the U.S., Iran and Saudi Arabia changed the balance of power in the Middle East. Simon and Schuster. Symon, G., Cassell, C. & Dickson, R. (2000) ‘Expanding our research and practice through innovative research methods’, European Journal of Work and Organizational Psychology. 9 (4), pp. 1-6. Read More