Thursday, June 23, 2011

Iraq Heading For Another Hot Summer

Iraq's strained power network is not going to meet demand again this summer (Radio Free Europe/Radio Liberty)
A spokesman for Iraq’s Electricity Ministry recently announced that the government would only be able to provide around half of the public’s needs this summer. Last year, temperatures rose to 120 degrees, and people took to the streets in anger. Prime Minister Nouri al-Maliki sacked the Electricity Ministry, and then quietly banned all protests. That unrest could be repeated again this year, despite all the government’s promises of new power projects.
Click on image for larger view (Special Inspector General for Iraq Reconstruction)
On June 17, 2011, a spokesman for the Electricity Ministry said that the government might only provide less than half of the power demanded this summer. By then, supply is estimated to be around 7,000 megawatts, but demand is expected to reach 15,000 megawatts. That came on top of a very public spat between Prime Minister Nouri al-Maliki and Electricity Minister Raad Shallal al-Ani on state-run TV on June 8. That was when al-Ani complained that he had not gotten the money promised him for new power projects after the premier claimed that Baghdad was working on the country’s astute electrical shortages. Earlier, others in the Electricity Ministry warned that demand would outstrip supply again this year. Officially, Iraq isn’t expected to be able to meet the public’s electricity needs until the end of 2013, because it will take years to finish off its plans to renovate existing power plants and build new ones. The Ministry has been talking about its predicament to all that will listen, but the government is more concerned about the on-going protests that started in January 2011. The lack of services was one of their main complaints, and in response the prime minister gave the cabinet 100-days to improve their work. Nothing was really accomplished during that time, but Maliki wants to maintain the image that things are getting better than deal with the hard reality that improvements are still a long way off.

Iraq’s Average Electricity Production Jan. 2010 – Mar. 2011
1st Quarter 2011: 5,784 megawatts
4th Quarter 2010: 6,339 megawatts 
3rd Quarter 2010: 6,540 megawatts 
2nd Quarter 2010: 6,202 megawatts 
1st Quarter 2010: 5,635 megawatts 

Instead of honestly talking about the up-coming shortages, the government has focused upon all the deals it has signed to build new power plants, and offered free fuel to generator operators. For example, on March 23, the Electricity Ministry announced its plan to install 50 new 100-megawatt diesel power plants by the summer of 2012. On April 24, it was reported that the Electricity Ministry and the Iranian company Sunir opened a $150 million, 320-megawatt power plant in Baghdad’s Sadr City. Sunir also planned on adding new turbines to bring capacity to 640 megawatts at the facility. Two new electricity stations were activated in Basra in May as well. Also that month, contracts or initial work were announced on new plants in Zubaidiya, Wasit, Qaryat, Karbala, Qudus, Baghdad, four in Ninewa province, and another in Wasit. Iraq signed a deal with Iran to deliver natural gas to two power facilities in Baghdad, and on May 27, the cabinet said it would supply generator owners with free fuel. In June, an additional $927 million was added to the Electricity Ministry’s budget, raising it to more than $7 billion, and a contract was signed to build a plant in Haydaria, Najaf and another in Qaim, Anbar. Baghdad has been planning on dramatically boosting the country’s electricity capacity for several years, but this is the first time that it has the money to actually carry out some of its plans. The problem is that they will take one to two years at minimum to be completed.

For years, Iraq has not been able to meet the country’s electricity demands because wars and sanctions devastated its infrastructure. Prime Minister Maliki is hoping that all of the announcements about deals for the power grid will pacify the public. What the Electricity Ministry has tried to point out is that these new projects are still a ways off, and will not be ready this summer. That could reinvigorate the protest movement, which has dramatically fallen off since the beginning of the year. The premier is intent on preventing that from happening, but words can only go so far when action is what is really needed.

SOURCES

Ajrash, Kadhim and Razzouk, Nayla, “India’s Lanco to Build $81 Million Electricity in Iraq,” Bloomberg, 6/20/11

AK News, Aswat al-Iraq, “Iraqi Govt Allocates $927m to Electricity,” Iraq Business News, 6/15/11
- “Turkey’s Lanka Wins Nineveh Power Contract,” Iraq Business News, 5/9/11

Aswat al-Iraq, “1,000 Megawatts to be added to Iraq’s electric power by end of May,” 5/12/11
- “Indian Company to Build Power Station in Wassit,” Iraq Business News, 5/10/11
- “Iraqi Government to supply owners of electric generators with fuel free of charge, official,” 5/25/11

Bloomberg, “Hyundai Starts Work at al-Quds Power Station,” Iraq Business News, 5/19/11
- “Plans Changed for Four New Power Stations,” Iraq Business News, 6/15/11
- “STX Signs Deal for 25 Power Plants,” Iraq Business News, 5/19/11

Bloomberg, AK News, Baghdad Company for Gas Turbines Ltd, “Baghdad Co Wins $130m Najaf Power Contract,” Iraq Business News, 6/15/11

Ibrahim, Waleed and Kami, Aseel, “Iraq govt struggles to cool anger over daily woes,” Reuters, 6/8/11

Kami, Aseel, “ANALYSIS-Power protests threaten Iraq government,” Reuters, 5/18/11

Kami, Aseel and Mohammed, Muhanad, “Iraq fires up new power plant in Baghdad,” Reuters, 4/24/11

Radio Free Europe/Radio Liberty, “Iraq Admits Electricity Shortfall During Summer,” 6/17/11

Razzouk, Nayla, “Iraq Cabinet Approves $927 Million in Additional Funds for Power,” Bloomberg, 6/13/11

Reuters, “Shanghai Electricity Wins $1bn Iraq Power Contract,” Iraq Business News, 4/25/11

Reuters, Hurriyet, Turkish Weekly, “Work Starts at $450m Karbala Power Station,” Iraq Business News, 5/9/11

Saleh, Khayoun, “Iraqi government adds more than $900 million to Electricity Ministry’s budget,” Azzaman, 6/18/11

Special Inspector General for Iraq Reconstruction, “Quarterly and Semiannual Report to the United States Congress,” 7/30/10
- “Quarterly Report and Semiannual Report to the United States Congress,” 1/30/11
- “Quarterly Report to the United States Congress,” 4/30/10
- “Quarterly Report to the United States Congress,” 10/30/10
- “Quarterly Report to the United States Congress,” 4/30/11

Al-Tamimi, Noor, “Two new power stations start operating in Basra,” AK News, 5/17/11

Al-Wannan, Jaafar, “Electricity Ministry announces 380mw boost to Iraqi grid,” AK News, 5/10/11
- “Iranian gas to fight Iraq’s electricity shortage,” AK News, 5/23/11

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