Iraq’s broken electricity sector is planning a long-awaited overhaul to both meet U.S. pressure to halt Iranian power imports and head off summertime protests over chronic cuts. With a freshman at the helm, the Electricity Ministry is exploring options including revamping stations and lines to cut waste, importing power and improving bill collection to boost revenues.
Baghdad hopes it will generate enough megawatts to feed demand by summer, when cuts can leave millions powerless for up to 20 hours per day.
But it also has an earlier deadline to meet.
When Washington reimposed sanctions on Tehran in November over the latter’s nuclear program, it granted Iraq a 45-day waiver to produce a roadmap to stop using Iranian electricity and gas.
Iraq pipes in up to 28 million cubic meters of Iranian gas daily to feed its stations, and also directly imports up to 1,300 megawatts of Iranian-produced electricity.
Now, Baghdad’s Power Ministry has outlined a plan to wean off Iranian electricity within 18 months and resolve some decade-old problems, spokesman Musab al-Mudarris said.
“In the coming two weeks, we will submit to the Americans a five-year plan including yearly assessments,” he told AFP.
If the U.S. approves, it may extend the waiver for “a year or two.” “But there are no quick fixes,” Mudarris insisted.
Iraq sits on 153 billion barrels of proven crude reserves, but it needs higher quality fuel and gas for power turbines.
Mudarris admitted that while Iraq could do without Iran’s electricity, it needed Iranian gas until it could extract its own or capture flares from oil drilling.
Using its own fuel plus Iranian gas, Iraq can produce around 16,000 megawatts of electricity.
That is far below demand, which hovers around 24,000 MW but can jump to 30,000 in summer, when temperatures reach a sizzling 50 degrees Celsius.
Much of the shortfall is technical: when Iraq transmits power, 30 to 50 percent gets lost to poor infrastructure, according to the Iraq Energy Institute.
Some of that is age, but pipelines and stations were also attacked by Daesh (ISIS) before Iraq beat it back last year.
Rehabilitation is a key element of the ministry’s plan.
Mudarris pointed to recent memorandums of understanding with Siemens, worth $10 billion, and General Electric, at $15 billion, to fix infrastructure.
Together, they could add up to 24,000 MW within five years: “That would bring us to 40,000 MW,” Mudarris said.
Electricity Minister Luay al-Khateeb has also asked Siemens and GE for “fast-track” plans to boost power generation by summer.
Baghdad is currently finding ways to fund these efforts, including a $600 million finance deal between GE, the Trade Bank of Iraq, and Standard Chartered announced in late November.
Another ministerial initiative involves swapping Iranian power for imports from other neighbors, Mudarris said, including 300 MW each from Turkey, Jordan, and Kuwait, plus Saudi solar power.
In a possible omen, new Iraqi President Barham Saleh visited Amman, Kuwait and Riyadh in his first regional trip since assuming power.
The Daily Star