Iraq utilities profile: Power to the people

35 per cent of Iraq's power is lost through poor infrastructure and theft.

After eight years, the $61.45 billion US reconstruction programme to regenerate Iraq’s infrastructure is to conclude in 2011, marked by the planned departure of US troops by December 31.

Summarised from a Report to Congress by the Special Inspector General for Iraq Reconstruction, we take a look at Iraq’s power and water future.

In January this year, the Ministry of Electricity formally presented the Iraq Electricity Masterplan (IEM) which committed to adding more than 12,000 megawatts of generating capacity to the country by 2015.

Story continues below

Advertisement

FEATURED COMMENT Please click here to comment on this article

Most of this capacity is planned to come from a series of GE and Siemens mega deals which, if commissioned on schedule, will meet projected demand by 2013 or 2014.

The implementation of these construction plans will require an investment of approximately $26 billion; looking ahead, demand for power is expected to continue rising with a further estimated $29 billion spend required between 2016 and 2030 to keep pace.

The IEM has estimated that the supply/demand gap will return in 2017 if no additional plants are constructed, with full implementation of the plan over 20 years expected to cost $77 billion in capital investment. However, estimates also show that the cost of unserved energy to Iraq’s economy is in the region of $40 billion per year.

In the short term however, public dissatisfaction with the delivery of utilities in the country combined with the prospect of another sweltering summer with meagre power and water supplies, has seen the government working swiftly to put safeguards in place.

A plan to add 5,000 megawatts of new generating capacity (albeit through non-recommended diesel plants), increases in fuel allocations for localised generators and collaboration with neighbouring countries to raise water levels in rivers are certainly steps in the right direction.

The measures can’t come soon enough - a large drop in power generation from the country’s hydroelectric plants (down by 70 per cent from Q1 2010) was due largely to insufficient water availability, with Iraq’s hydro plants generating a combined total of just 190 megawatts.

The combined generating output from all the Ministry of Electricity’s power plants reached 4,411 megawatts this quarter – the lowest level in two years. This drop was however, largely offset by increased output from three privately owned combustion turbine plants in the Kurdistan region.

Despite the country’s overall nameplate generating capacity standing at 16,500 megawatts, long-term outages and harsh operating conditions have lowered the feasible capacity to less than 12,400 megawatts, with actual production running at half of this figure.

The plan to introduce 50 new 100 megawatt diesel power plants, in an attempt to cater for increased summer demand, will cost in the region of $6 billion.

So far, two contracts have been awarded to MENA of South Korea (2,500MW) and Elite Company for Supplies of Jordan (600MW) to supply turnkey plants and provide a six-month training programme.

If these plants are completed by 2012 as intended, diesel generation will account for at least 20 per cent of the country’s power generation, going against recent recommendations from the IEM that diesel generation plants are ‘economically unattractive’.