Iraq to add 3,000 mw power ‘soon’ after US sanctions waiver

Power cuts are common and the oil rich nation relies on imports of gas from Iran to keep the lights on

A man starts his personal electrical generator at home to help cope with a series of power outages in Najaf, Iraq. Reuters, file

Iraq will “soon” add an additional 3,000 megawatts of power to the electricity grid as it seeks to decrease dependence on imported Iranian gas, the ministry said on Friday.

The comments come a day after the United States extended a sanctions waiver on Iraq to continue importing gas from neighbouring Iran that is crucial to keeping lights on in power scares Iraq.

Electricity Ministry spokesman Ahmad Musa Al Abadi told the state-run Iraq News Agency on Friday that they are "working to introduce approximately 3,000 new megawatts to the system through production units and stations that will enter work soon, and will be among the preparations for the new year."

Commenting on the American announcement, he said: "the US administration sees the exemption as an opportunity for Iraq to work on rehabilitating the gas fields and to ensure a fuel plan to operate the production stations.”

Around 31 per cent of the gas used to generate power in Iraq is imported from Iran. The new waiver will last 60 days.

Official data show its generation capacity at 16,000 megawatts, compared with the 24,000 to 30,000 megawatts needed to satisfy demand.

A 2019 report by the International Energy Agency found that Iraq has the capacity to produce 32 gigawatts of power but can only generate around 16 gigawatts, of which around 40 per cent is lost in transmission due to ageing infrastructure. Damage by ISIS when it controlled large areas of Iraq after 2014 also left lasting issues.

Years of poor management, corruption and conflict have left the Iraqi grid aged, patchy and overstretched. Power cuts are common Mudher Salih, a veteran Iraqi economist who advises the government, said in May that the electricity sector costs the treasury about $10 billion (Dh36.73bn) a year to run but generates only 7 per cent of its operating costs in revenue.

Mr Al Abadi said that the ministry was working to diversify power generation and is proceeding with plans to connect the national grid with neighbouring states. Last year, Iraq signed a deal to connect its power network with GCC states in order to import 500 megawatts of power by 2020. A 300-kilometre power line will run from Kuwait to Iraq’s southern port of Faw and be financed by the GCC, the Iraqi Electricity Ministry said at the time.

The majority of Iraq’s domestic power production is generated by plants built in the 1970s and 1980s with a few newer gas-powered stations built after 2003.

Iraq is faced with a legacy of poor service provision caused by massive corruption and ineffectual governance since 2003. A recent crash in the price of oil coupled with the economic impact of the Covid-19 pandemic has blown a hole in the Iraqi state budget, hampering the ability of the government to upgrade the system.