IEA shows the way forward for Iraq’s electricity sector

In a new report: Iraq’s Energy Sector: A Roadmap to a Brighter Future, the International Energy Agency (IEA) has identified immediate practical action and medium-term measures to tackle the most pressing problems in Iraq’s electricity sector. 

According to the IEA, Iraq’s electricity demand is likely to double between now and 2030, and its projected shortfall in electricity supply will widen as the country’s population grows by more than one million people annually. However, the report found that Iraq has huge potential to cut its electricity network losses, which are among the highest in the world. 

Reducing these losses by half would dramatically improve the efficiency of grid supply, effectively increasing available capacity by one-third. Without changes to the current structure of electricity supply and grid improvements, Iraq’s domestic generation, imports and neighbourhood generation would need to double by 2030, the IEA said. 

The report also looks at Iraq’s oil and gas sector, projecting that the country will become the world’s fourth largest oil producer by 2030, behind the US, Saudi Arabia and Russia. Iraq could also make better use of its gas – diverting currently flared gas to power generation. 

‘Operating under extremely challenging circumstances, Iraq has done a remarkable job expanding its oil industry,’ said Dr Fatih Birol, the IEA’s Executive Director. ‘Today’s urgent issue is to address the national power sector as the summer heatwave approaches, by improving grid maintenance, boosting electricity production with larger mobile generators, and incentivising upgrades of power plants.’ 

Promoting energy efficiency, including through the use of progressive tariffs, could ensure that the growth in demand during the summer’s peak does not continue to outpace supply. The report also urged Iraq to take advantage of its renewable energy potential. The analysis shows that expanding the share of solar PV and wind to 30% of electricity supply by 2030 would bring benefits both to the Iraqi consumer, in the form of reduced electricity bills, and to the environment. 

Meanwhile, German engineering giant Siemens has signed an agreement with the government of Iraq to help rebuild the country’s electricity grid after years of war and unrest. 

The partnership was announced following bilateral talks between Iraqi Prime Minister Adil Abdul- Mahdi and German Chancellor Angela Merkel in Berlin. Abdul- Mahdi later told journalists that Siemens would likely be awarded a majority of contracts in Iraq’s $14bn electricity grid modernisation project. 

Within the implementation agreement, the parties also agreed on the award of contracts valued at approximately €700mn for Phase 1 of Siemens' ‘roadmap’ plan for the electrification of Iraq. Confirmed projects include the construction of a 500 MW gas-fired power plant, the upgrade of 40 gas turbines with upstream cooling systems, and the installation of 13 substations, along with 34 transformers, across the country.

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