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Protest over power shortages in Babil (Rudaw) |
At the start of July protests returned to several southern Iraqi provinces over electricity shortages. The government has no answer because it has no money to spend on power projects due to the economic crisis. Even if it did structural problems with the power grid mean it is still years away from meeting demand.
The Electricity Ministry has halted
most of its investment this year because of the country’s budget problems.
It had contracts to work on projects that would add 7,000 megawatts. Other
deals to capture natural gas to fuel power plants are in question as well. The
government doesn’t have money to cover any of its major bills like public
salaries, pensions or pay the oil companies. The first thing it did was suspend
most of its capital spending that goes towards development.
Even if these projects were completed the power sector has
such structural problems that supply is perpetually behind demand. Iraq has the
capacity to meet needs even during the summer but because of poor maintenance
and the use of bad fuels it only produces half of what it can. On top of that,
50-60% of what is supplied is lost due to poor transmission and distribution
systems. Even if the 7,000 megawatt projects were completed they would only
deliver around 1,750 megawatts with the rest lost due to the inefficiencies in
the system. The result is that the difference between the highest demand and
maximum supply has grown by 33% over the last five years. It also means that
the Electricity Ministry has to invest billions more than it should because the
power grid is so broken.
SOURCES
Oxford Institute for
Energy Studies, “Compounding crises: Iraq’s oil and energy economy,” July 2020
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