Iraq's power crisis deepens: Heavy dependence on Iranian gas and limited alternatives
Shafaq News/ Electricity production in Iraqremains a persistent crisis that has plagued the country for decades. Poweroutages have become a routine reality for citizens and government institutions,leaving Iraqis with no option but to rely on private generators to meet theirelectricity needs.
Reliance on Iranian Gas
Iraq is heavily reliant on Iranian gas tooperate approximately 40-60% of its gas-powered electricity plants, while theremaining supply comes from domestic production, which remains insufficient tomeet the growing demand.
Iraq spends nearly $4 billion annually ongas and electricity imports from Iran while simultaneously flaring massivequantities of natural gas—a byproduct of its hydrocarbon sector.
The World Bank ranks Iraq as the second-largestgas-flaring country globally, following Russia and ahead of Iran and the UnitedStates. In 2020, Iraq flared 17.374 billion cubic meters of gas, placing itamong the nine countries responsible for nearly half of the world's oil-relatedgas flaring.
Economist Durgam Mohammed Ali told ShafaqNews, "Iran exports gas from its surplus production after meeting domesticconsumption. However, Iraq and Iran share similar peak energy demand periodsduring the cold winter months, as energy needs for heating rise. Most of Iran'sgas production is allocated to domestic use."
In March 2024, Iraq's Ministry ofElectricity signed a five-year contract with Iran to import 50 million cubicmeters of gas per day, with volumes adjusted according to the needs of Iraq's powergrid to sustain production, meet peak demand, and address rising electricityconsumption.
Diversification Delays
Though Baghdad has sought to diversify itselectricity supply through overtures to countries such as Saudi Arabia,Turkiye, Jordan, and Kuwait, progress is not sufficiently developed.
Efforts by the Iraqi government todiversify energy sources, including contracts with Turkmenistan, have yet toyield results for unknown reasons.
Ali explained, “As a result, exports remainstalled, and Iraq essentially consumes Turkmen gas imported through Iran, whichis swapped for Iranian gas used domestically in Iran.”
The spokesperson for Iraq’s Ministry ofElectricity, Ahmed Mousa noted that the Iraqi government had turned toTurkmenistan to address the shortfall. However, he revealed that “a creditfacility has yet to be opened, and Turkmenistan has not been notified to begingas supplies via the agreed mechanism. The funds remain locked in the TradeBank of Iraq for unknown reasons.”
On October 19, 2024, Iraq’s Ministry ofElectricity signed a contract with Turkmenistan to import 10 million cubicmeters of Turkmen gas via Iran during winter and 20 million cubic meters insummer, with supply volumes expected to rise in subsequent years to meet Iraq’sgrowing gas demand.
The agreement, facilitated throughSwitzerland’s Luxton Energy, utilizes Iran’s pipeline network and a gas swapmechanism to streamline transport.
Economist Mohammed al-Hassani told ShafaqNews that even if these projects are completed, Iraq would only generate anadditional 3,000 megawatts, while the country’s needs exceed 10,000 megawatts,rising to more than 15,000 megawatts in the coming years.
Al-Hassani added, “The electricityinterconnection projects Iraq has initiated with neighboring countries will noteliminate the need for Iranian gas. Practically speaking, these projects arenot a viable alternative.”
Solutions to a Growing Crisis
Currently, Iraq generates 16,000 megawattsof electricity, far below the estimated 24,000 megawatts required to meetdemand—a figure that surges to 30,000 megawatts during the summer. With thecountry’s population expected to double by 2050, energy consumption isprojected to rise significantly, according to the United Nations.
Energy expert Govand Sherwani highlightedthree key challenges driving Iraq's electricity crisis. The country generatesaround 27,000 megawatts of electricity, significantly below the peak demand of45,000 megawatts, leaving a deficit of 17,000 to 18,000 megawatts.
Sherwani recommended addressing the crisisthrough two primary approaches. First, he emphasized “the need to repair andmodernize transmission and distribution networks, while also constructing newpower plants using Iraq’s substantial natural gas reserves, estimated at 143trillion cubic feet.”
He noted that much of this gas,particularly associated gas from oil fields, is flared rather than captured,and fully harnessing it could significantly reduce the electricity deficit.
Second, he advocated for investing inrenewable energy, particularly solar power, as “large-scale solar plants withcapacities of 1,000 megawatts each could rapidly cover a third of theshortfall, requiring minimal maintenance and integration time.”
“By combining domestic gas utilization withrenewable energy development, Iraq could address its electricity crisis whilereducing reliance on imports and environmental impact,” he assumed.
