Power to the People - Switching Iraq's lights on
One of the biggest obstacles to development is unreliable power supply
One of the biggest obstacles to reconstruction and economic growth is the unreliable and insufficient electricity generating and transmission infrastructure.
Iraq’s infrastructure sector continues to be the primary focus of reconstruction efforts in the country. This utilities snapshot includes data and analysis from Business Monitor International’s Q3 2010 Iraq infrastructure Report.
Estimates for average daily peak demand of electricity in 2009 vary between 10,000 megawatts (MW) from the Iraq Transition Assistance Office (ITAO) and ESD and 13,100MW.
Conversely, electricity supply to the national grid in the last quarter of 2009 averaged 5,952MW or 142,848 megawatts hours (MWh) per day, an increase of 19% compared to Q408, according to the US Special Inspector General report to congress. Output from Iraqi power plants was 126,843MWh per day over the period.
Total nameplate capacity at Iraq’s power plants is 15,527MW. Of this, 44% is from combustion turbines, 35% from thermal power plants, 16% from hydropower and 5% from diesel. Despite sufficient capacity in theory to meet demand, over the last quarter, the power plants operated at just 34% of capacity.
Hydropower plants were operating at especially low capacity due to water shortages in the country. To supplement this, the country relies on imports from Turkey and Iran, which averaged 16,000MWh per day between September and December 2009. However, shortages were still heavily felt across the country.
Insufficient electricity supply has led those who can afford it to top up electricity supplies from privately owned generators. However, these are expensive to run, and dirty to operate.
The use of private generators makes accurate electricity generation and supply difficult to calculate. What is clear is that their presence illustrates that the national grid is not producing sufficient supply.
In order to combat the electricity shortage, in December 2008, Baghdad signed a US$3bn contract with General Electric (GE) for 56 turbines, which could generate a total of 7,000MW of electricity.
The deal, as well as similar one with Siemens (worth US$2.1bn, for the supply of 16 gas turbines with a total generating capacity of 3,150MW), is designed to address Iraq’s chronic electricity shortage. However, the country has encountered difficulty paying for and installing the ordered turbines.
The government has set an ambitious target of expanding electricity generating capacity to 27,000MW by 2013. BMI notes that this will be difficult to achieve and would involve installed all turbines and then some.
Plans to install the turbines took a step forward in the first half of 2010 with tenders for installing the turbines released. Few specific details are available about the tender process.
The ministry has so far invited bids for the installation of 20 GE turbines. The contract will be awarded on an engineering, procurement and construction (EPC) basis.
The companies are due to present bids within a month to the ministry, and installation of the turbines is due to take place over the next three years. The cost for installing all 20 is estimated at US$900mn. The turbines will be installed at locations in Baghdad, Kerbala and Diwaniya.
The ministry is also tendering the installation of eight Siemens turbines, with a combined capacity of 1,600MW. These turbines will be installed in Kirkuk, Baiji and Basra. This contract is more progressed, with a number of companies already shortlisted for the deal, according to Reuters. These include: Hyundai Heavy Industries, ABB, SNC-Lavalin (which is already building two power plants in the country), and Al-Ghanim from Kuwait.
Gas appears to be the main focus for building up electricity supply. The tenders for installing the turbines have been released in the context of the South Gas deal with Shell, which is currently in the final stages of negotiations (as of June 2010).
Through the deal, Shell will capture flared gas and channel it to utilities. Another important deal for the gas sector, is the third bidding round for three undeveloped gas fields, which was launched earlier in May 2010. The ministry has warned that if both these deals fail, then it will have to rethink the tenders to install the gas turbines.
Private power providers in Baghdad are selling electricity at almost four times the maximum legal price, exploiting shortages and stifling summer heat while crime bosses pilfer dwindling public supplies.
It is estimated that 21.2 million people in Iraq have access to potable water by the US Department of State. This is a substantial increase on the five million estimated to have access to drinking water in 2003.
According to the latest data from September 2009, the Baghdad Water Authority was providing 2.5 million cubic metres of water per day, satisfying 89 percent of demand.
A survey carried out in August 2009 by the US Department of State, found that 50 percent of respondents had a working sewage disposal system and 70 percent had access to safe and clean drinking water.
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