As the second-largest crude oil producer in the Middle East, it’s no surprise that Iraq’s electricity sector is powered by oil and gas. More than 97% of the electricity production in Iraq is from oil and natural gas, with 69% from oil alone. While crude oil production declined by 12% in 2020, the production rate has doubled since 2010.
Similarly, power capacity in Iraq has tripled from 12 gigawatts to 39 gigawatts from 2010 to 2020. With recent project developments supporting higher electricity consumption in Iraq, there are many prospects for expanding the capacity for gas production that go towards electrification.
What are the current developments in the electricity sector in Iraq, and what challenges and opportunities lie in their energy sources?
A Look at the Demand for Electricity in Iraq
Years of mismanagement have left Iraq with so much to improve in terms of power infrastructure. Terrorism has also dampened the country’s power generation and transmission capacities.
In recent years, Iraq has become dependent on Iran for much of its energy resources. About 23% of electricity production in Iraq in 2019 was generated by natural gas from Iran.
A large percentage of electricity consumption in Iraq remains untracked. Therefore, the government struggles to fill the energy requirements of consumers and businesses, many of which are reliant on power generators to manage power cuts. Consumers are also believed to be pirated from the national grid for high-power appliances.
While Iraq burns crude oil at its power plants to support power generation fuels, it continues to increase its use of natural gas for the electricity sector. However, more pressing issues such as electricity loss from technical problems should be addressed.
Many consumers are also reliant on private generator providers to power their homes during blackouts, and this alternative means of electrification has become a popular choice among Iraqis.
The government needs to refurbish and modify the country’s power lines and cables. A better distribution network to prevent revenue loss should also be established.
How Iraq Can Keep Up with Energy Demands
There are still significant electricity challenges in Iraq. It still faces frequent power outages, as the country tries to keep up with increasing consumption. While supply has increased by a third in the last five years, it hasn’t been able to bridge the gap between the country’s maximum grid supply and consumers’ electricity demand.
Poor maintenance is also a main concern. Decades of conflict and corruption have left the country with dilapidated electricity infrastructures. As more consumers become aware of the difference between capacity and consumption, private companies are encouraged to step in and help expand power generation in Iraq.
The Iraqi government has started partnerships with foreign companies to start solar energy projects in the country. There are also plans to increase oil production capacity for Iraqi power plants to lessen their dependence on Iran for natural gas sources.
As Iraq continues to explore alternatives and measures to improve and expand electrification in the country, businesses will benefit from projects that will light up the country. Many opportunities in alternative energy sources are yet to be explored, which will also help Iraq reduce its greenhouse gas emissions from electricity generation.
