Sustainable prosperity requires “open and flexible eco- nomic structures capable of competing in a changing world”. — Qatar National Vision 2030
Opportunities for efficiency gains proliferate, cut- ting across sector boundaries. Improvements in technical and economic efficiency involve using scarce resources more effectively in a given activ- ity or use. Improvements in market efficiency focus on allocating resources among alternative uses to maximize social benefits. Where markets do not function well, regulatory interventions can improve efficiency. Figure 3.6 illustrates how these four elements of efficiency fit together and link to sectors and focus areas.
By attacking inefficiency in technology, physi- cal infrastructure, institutions and processes, the government can make a lasting contribution to
Efficiency
Subsidies/user charges
Trade and investment liberalization Competition Water Power Land Infrastructure Power Infrastructure
Land and buildings Infrastructure Business climate Trade Technical Economic Re gulator y Mark et
improved resource use over time. With an abun- dance of hydrocarbon resources but a scarcity of other vital resources such as water and arable land, a drive for efficiency is central to creating and capturing value, preserving and expanding the productive base and encouraging the private sector to develop through discovery and economic diversification.
Improved efficiency has other benefits, too. By improving the use of capital assets, efficiency measures save fiscal resources by deferring or eliminating the need for replacement investments or capital expansion. Some efficiency gains reduce waste and unwanted by-products such as carbon dioxide emissions and waste water, contributing to environment goals.
In addressing these aspects of efficiency, this part of the National Development Strategy 2011–2016 focuses on how Qatar uses its natural resourc- es and delivers infrastructure services. Particu- lar attention is given to desalinated water, which is coproduced with power in a process that uses large amounts of land and natural gas. Related environmental dimensions of resource use and management are examined in chapter 6.
Efficiency metrics
Efficiency can be measured by the quantity and quality of services provided for a given set of inputs (technical efficiency) and by the cost of delivering a given quantity and quality of services (econom- ic efficiency). Other proximate indicators of tech- nical and economic efficiency used here include levels of waste and service coverage and quality, a form of operating efficiency.
As noted in chapter 2, Qatar has made large infra- structure investments in recent years, including in power and water production. They have support- ed high-quality services, with further improve- ments expected as a result of initiatives pursued under the National Development Strategy 2011– 2016. Figure 3.7 provides a snapshot of Qatar’s infrastructure capacity, quality and cost.
Enhanced use and conservation of water
Few tangible aspects of Qatar’s life and economy need efficiency reforms as much as water — crucial to all human activity but in scarce supply. With one of the world’s lowest levels of rainfall, Qatar relies on water from three sources: desalination, groundwater and recycled water, all subject to inefficiencies that may create stresses and eventu- ally pose a threat to water security or require large investments to ease shortages (figure 3.8 and fig- ure 6.3 in chapter 6).
Desalination, which accounts for about half the water used in the country, depends on a costly and energy-intensive cogeneration process that uses large swathes of coastal land and requires sea water that does not exceed set levels of salin- ity. With rapid population growth and urbani- zation, the use of desalinated water has tripled since 1995, reaching 312 million cubic metres in 2008.
Losses of desalinated water due to leakage are high by international standards. Some estimates put network losses as high as 30%–35%, com- pared with an OECD average of 18%. Leakage in the distribution system for desalinated water costs as much as QR 1 billion a year. The government’s strategy for improved water management calls for an aggressive five-year programme to cut network losses. Over the long term the government will also be investigating the feasibility of applying new reverse osmosis technologies that do not consume as much power and that can tolerate higher salin- ity levels than current processes.
Fresh groundwater drawn from natural aquifers accounts for about 36% of water use, but efficien- cy problems are again evident. An estimated 250 million cubic metres of groundwater are extract- ed each year, mostly for irrigation, five times the 50 million cubic meters of freshwater recharge that comes from Qatar’s meagre rainfall. With demand far exceeding the recharge rate of aqui- fers, Qatar’s freshwater reserves are under stress and at risk of exhaustion.
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Groundwater supplies are subject to extensive waste and loss, notwithstanding their scarcity. Much of the groundwater is used for flood irriga- tion of open fields, with high levels of evaporation. Farmers pay a small pumping charge but other- wise have free use of groundwater, providing little incentive for conservation.
Recycled water, or treated sewage effluent, accounts for the remaining 14% of the water used in Qatar. But because supply currently outstrips demand, about 40% of treated sewage effluent is discharged into septic lagoons. Some wastewater
— particularly from industrial users — is not
treated but is discharged or stored in tanks that
could leak, contaminating the limited supplies of groundwater (see chapter 6). Qatar could make far more extensive use of recycled water, which is a quarter as expensive to produce as desalinated water.
Inefficiencies are also evident on the consump- tion side of the water equation. Qatar’s per capita water use is one of the world’s highest. Agriculture makes heavy demands on water, disproportionate to the value created by the sector.
Excessive water use stems partly from technical and economic inefficiencies. The government is already addressing some problems. Projects to
Focus area Meeting Qatar’s needs by 2016?a Service quality Efficiency Power supply Water supply Wastewater Roads Seaports Airports Metro Rail Information and communication technology
Adequacy of supply, quality and efficiency Attention point Critical issue
Power and w
ater
Tr
anspor
tation
Figure 3.7 A snapshot of Qatar’s infrastructure in capacity, quality and cost
M eg ap ro je ct s
a. Current or planned capacity is adequate and is not expected to reach saturation until the year indicated. b. Refers to phases 1 and 2.
2020
Committed capacity significantly exceeding demand
Limited number and duration of interruptions; approximately 100% network coverage
High power generation CAPEX; low plant use after 2011 (60%); transmission and distribution losses in line with benchmarks 2020
If RAF A in operation until 2020, no further capacity additions required
Quality of water in line with benchmarks; 98% network coverage; water stock limited to 1.5 days
High network losses (30%–35%); high per capita demand
+2030
Networks being developed; treatment capacity additions in 2011 satisfying needs beyond 2030
River quality of treated water; investigation of water quality upgrade
Limited treated sewage effluent use (60%); low expected treatment plant use after 2011
+2030
Current network congestion, but road expansion plans based on very high population projections
Lowest perceived quality of road in the Gulf Cooperation Council (World Economic Forum); need to strengthen public transport
Construction cost in line with Gulf Cooperation Council average but low use if network realized based on current population projections
+2030
Current port operating beyond capacity; new Doha port expected with large excess capacity if phases 2–3 realized
Current port congested; new Doha port expected in line with international standards
Expected low use of new port; high share of total cost incurred in phase 1 (+70%)
2020b
Current airport operating beyond capacity; new Doha International Airport phase 1–2 required—phase 3 expansion could be postponed (from 2015 to 2020)
Current airport congested: 3 stars (out of 5) Skytrax rating; new Doha international airport expected in line with international standards
New Doha international airport with high capital expenditure per passenger; high share of total cost incurred in phase 1–2 (70%–80%)
+2030
Very large network (85 kilometres) relative to Doha transportation demand
Service quality expected in line with international standards
Expected low use; expected high lifecycle cost
+2030
Network covering main hubs in Qatar Service quality expected in line with international standards
Low number of passengers per kilometre of railway compared with EU average
na
Limited penetration gap in Internet; national broadband network expected with 95% coverage
Bandwidth performance below international benchmarks; new national broadband network to increase performance to 50 megabits per second
seal leaks are under way, with plans to accelerate the work on pipes, pumps and flow meters. The government aims to bring the loss rate down to 10%.
The government will also be spearheading a series of water-saving initiatives. Substantial amounts of water would be saved by equipping faucets with “water savers”, which the government will consider installing. The government is also weighing the best ways to encourage drip and soak watering of gardens and increased use of covers for swimming pools. Other initiatives will encourage water saving by commercial users. To monitor the impacts, the government will extend the current programme of installing water meters and examine the benefits of “smart meters”. In agriculture, a new approach is needed. Irriga- tion methods that involve flooding fields — with
high losses from evaporation — need to be
replaced with drip irrigation systems, which use much less water for a given yield. Over the longer term, solutions to agricultural water issues need to be formulated in a wider framework of the com- mercialization of sustainable farming methods and domestic agrofood products.
Increased treatment of industrial and household wastewater would create recycling opportunities while removing environmental hazards (see chap- ter 6). The government will consider investments in both areas, looking for opportunities to expand both the collection and the distribution net- works for recycled water. By distributing recycled water to more users, the government can relieve demands on other sources of water and reduce discharge. The government will also look close- ly at options for infrastructure for collecting and treating industrial wastewater. By extending the
0 250 500 750 2030 2028 2026 2024 2022 2020 2018 2016 2014 2012 2010 2009
Million cubic metres per year
Desalination water supply and demand, actual and projected, 2009–2030
Desalination supply Status quo desalination demand, average Reduced loss desalination demand, average Technology demand-side management and reduced loss desalination demand, average
Expected shortage pushed out 10 years to 2030
Network loss reduction Comprehensive demand side management
Figure 3.8 Qatar relies on water from desalination, which is subject to inefficiencies that may threaten water security or require large investments to ease shortages
Note: Demand curves represent average of two projection scenarios from Population and Employment Projections, 2008 to 2030: A Framework for National Planning (QSA/GSDP). Projections are approximate and use the
most reliable data available. Treated sewage effluent is not considered a substitute for desalinated water due to current social and infrastructure-related limitations. These projections assume network loss reduction from approximately 30% to 18% (OECD average) by 2015 and change in behaviour and technology reaching 60% adoption by 2020 for commercial and residential entities and by 2015 for government entities.
Source: National Development Strategy 2011–2016 estimates.
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domestic collection and treatment of wastewater, the government can reduce dependence on septic tanks, an environmental priority.
Targets for 2013
• Cut network leaks of desalinated water to 10% or less from the current estimate of 30%–35%. • Ensure that all water consumption is metered. • Support installation of water-saving technolo-
gies for households and other users.
• Develop a programme of water-saving meas- ures in plans for agricultural development. • Expand treated sewage effluent networks to
increase the use of recycled water.
• Examine the feasibility of industrial wastewater collection and treatment systems.
The implementation challenges of water-saving initiatives vary. Stemming distribution losses involves technological fixes. Introducing water- saving devices to households is fairly straight- forward, as Abu Dhabi and Canada have shown. Encouraging the use of water-saving appliances will require effective communication, but might also need supporting incentives (see below on economic efficiency). Regulations that are diffi- cult and costly to enforce (such as bans on hose- pipes for washing cars) may be unnecessary if the government can popularize a water-saving mindset.
Changing water consumption patterns in agricul- ture is vital to an integrated approach to water management. It will require a fundamental and prolonged reorientation of farming, involving a range of factors including government subsidies. Recharging aquifers with treated sewage effluent (if shown to be technically feasible) would ease the looming water scarcity problem. But without changes in irrigation methods and crop mixes, farming will continue to make heavy demands on Qatar’s precious water resources. The govern- ment is committed to addressing this challenge and finding solutions within a wider programme of agricultural reform and development of the domestic food industry.
Improved efficiency in energy and gas use
Power distributed through Qatar’s grid is co produced with desalinated water using gas tur- bine technology. The gas used to produce domes- tic power has an opportunity cost in forgone export revenues. For a few large industrial users, power is provided through standalone generation facilities.
Although the country’s power needs are fully served by a high-quality and reliable service, Qatar could achieve greater efficiencies through techni- cal enhancements. Such changes could save 5% of domestic gas consumption—and possibly more. Even though Qatar’s abundant gas supplies are expected to last well into the future, improved effi- ciency would yield both environmental and eco- nomic gains. Savings would have the added ben- efit of providing a buffer for the supply of gas, which is ample in the long run but constrained over shorter periods of time. By burning less natu- ral gas, Qatar would support the national goal of lowering carbon dioxide emissions (see chapter 6), reducing the country’s contribution to global cli- mate change. Gas saved domestically can be sold overseas, increasing national income.
The government also recognizes potential tech- nical efficiency gains in power production. Upgrading power plant turbines brought on prior to 2000 would increase thermal efficiency by 4%–6%, enabling total gas savings of about 2% of estimated local demand by 2016. The gov- ernment will work with producers to quantify the expected savings and to find ways to share the costs of upgrading.
With air conditioning accounting for 67% of res- idential power consumption, a shift to modern energy-efficient systems would bring significant savings. Cutting heat emitted by other appliances would lower air conditioning needs. Government will look at ways to encourage the use of energy- efficient technologies, such as automated sensor lighting systems that cut power demand directly,
with the extra payoff of reducing the demands on air conditioning when the heat from light fixtures is lowered. Wider use of district cooling systems on domestic and commercial premises would save on power and further the environmental benefit of expanding the market for recycled water. For new structures, gains will come from efficient design, backed by government-mandated green build- ing codes, setting standards for such elements as better insulation and increased shading and reflection.
Kahramaa, the country’s power and water distri- bution company, acquires power under long-term purchase agreements with independent power and water producers. From a sustainability perspective, the state should aim to minimize the cost of the gas consumed in producing power and water. Dis- patching the most efficient combined power and water generation facility to the grid first and add- ing incremental supply according to gas efficien- cy might yield further economies. Kahramaa will study possible opportunities for enhancing the efficiency of power dispatch.
Finally, renewable energy presents opportunities for Qatar to enhance its future energy mix, con- serve gas and reduce carbon emissions, once tech- nologies become cost efficient. The greatest poten- tial lies in solar energy, but other technologies may play a part depending on still- evolving tech- nological and economic parameters. A national- level committee will be formed to coordinate ini- tiatives on renewable energy.
Targets for 2013
• Study opportunities to lower gas consumption per unit of combined energy and water pro- duced through enhanced dispatch.
• Improve thermal efficiency in power produc- tion.
• Advance the adoption of energy-saving tech- nologies.
• Keep Qatar’s green building code implementa- tion on track.
• Establish a national-level committee on renew- able energy.
Interventions to achieve these goals should follow an assessment of their costs and benefits, draw- ing on the experiences of other countries. Where advantageous, the private sector should partici- pate in the design and implementation of initia- tives, helping shape incentives to encourage sus- tainable energy use. For independent power and water producers, more efficient dispatch arrange- ments might require contractual changes, but aggregate savings to the country could be suffi- ciently large to make investors whole again under any revised arrangements.
For conservation efforts in water and power to suc- ceed, the government needs effective communi- cations and stronger regulatory capacities. A key part of the robust demand management architec- ture will be the establishment of an independent regulator covering power and all aspects of water (see below and chapter 6).
Adding value to infrastructure
Investment decisions by the private sector are criti- cally influenced by the availability and quality of infrastructure services, which influence costs, pro- ductivity and asset returns.
Qatar’s significant infrastructure investments in the past decade (see chapter 2) are paying off. Its capacity across all infrastructure subsectors is like- ly to be adequate through at least 2016, and the quality of services is expected to be generally high. While infrastructure service quality is below par in some areas, plans for upgrading are well advanced (see figure 3.7). In one or two subsectors, there might be a need to reconsider current proposals as a result of changed circumstances.
Airport
After completion in the next two years of phases 1 and 2 of the new Doha international airport, service quality will meet the highest international standards, with capacity likely to remain adequate at least until 2020. A decision on the commission- ing of phase 3 will be assessed subsequently within
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the wider context of public investment planning parameters and based on realized traffic flow.
Information and communications technology
Currently, there is a quality gap in information and communication technology services, with bandwidth below international standards. Invest- ments in a national fibre-optic network will soon close the gap, and the government will support private providers in ensuring that the new net- work reaches all parts of the state (see below).
Seaport
The port of Doha, which is operating at full capacity, is congested, with delays the norm. The