gdpe0712icr iraq power market outlook to 2030, update 2014 ... · iraq power market outlook to...

REFERENCE CODE GDPE0712ICR | PUBLICATION DATE MARCH 2014

IRAQ POWER MARKET OUTLOOK TO 2030, UPDATE 2014 – MARKET TRENDS, REGULATIONS AND

COMPETITIVE LANDSCAPE

Iraq Power Market Outlook to 2030, Update 2014 – Market Trends, Regulations and Competitive Landscape 2 © GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.

IRAQ POWER MARKET OUTLOOK TO 2030, UPDATE 2014 – MARKET TRENDS, REGULATIONS AND COMPETITIVE LANDSCAPE

Executive Summary

Thermal Power Dominates Power Mix in Iraq

Thermal sources currently dominate Iraq’s power

mix with an XX% share of the country’s total

installed capacity as of 2013, of which gas-based

thermal capacity accounted for XX% and oil-based

capacity accounted for XX%. The remaining XX%

was accounted for by hydropower.

Power Market, Iraq, Cumulative Installed Capacity Breakdown by Fuel Type (%), 2013

Gas (thermal)

Oil (thermal)

Hydropower

Source: GlobalData, Power Database [Accessed on March 19, 2014]

Continuous Increase in Annual Consumption and Generation

Iraq’s annual electricity consumption increased

from XX Terawatt hours (TWh) in 2000 to XX TWh

in 2013 at a Compound Annual Growth Rate

(CAGR) of XX%, as a result of economic and

population growth. Annual electricity generation

increased during the same period from XX TWh in

2000 to XX TWh in 2013, at a CAGR of XX%. The

growth of electricity generation has consisted

almost entirely of increased thermal generation,

while renewable generation is still in the nascent

stages of development in the country.

Power Market, Iraq, Annual Power Consumption and Generation (TWh), 2000–2013

2000 2007 2013

Ann

ual p

ower

con

sum

ptio

n an

d ge

nera

tion

(TW

h)

Annual power consumption Annual power generation

Source: GlobalData, Power eTrack, Capacity and Generation Database [Accessed on: March 6, 2014]

Dominance of Thermal Power to Continue

Iraq is expected to continue to depend heavily

upon thermal power during the forecast period

from 2014 to 2030 as a result of the rapid growth in

demand for electricity, which will make it necessary

for the government to fall back on its fossil fuel

reserves. Thermal power generation is particularly

suitable for baseload generation and can also

effectively cater for increases in demand; Iraq’s

sizeable natural gas reserves are particularly

advantageous in this regard. The government has

demonstrated a tendency to keep electricity tariffs

low, and thermal power provides cheap electricity,

which suits this government policy.


Table of Contents


1 Table of Contents

1 Table of Contents ....................................................................................................................... 4

1.1 List of Tables ...................................................................................................................... 7

1.2 List of Figures ..................................................................................................................... 8

2 Introduction ................................................................................................................................. 9

2.1 GlobalData Report Guidance ............................................................................................ 10

3 Iraq, Power Market, Snapshot ................................................................................................... 11

3.1 Iraq, Power Market, Macroeconomic Factors .................................................................... 11

3.2 Iraq, Power Market, Supply Security ................................................................................. 13

3.3 Iraq, Power Market, Generation Infrastructure................................................................... 14

3.4 Iraq, Power Market, Transmission Infrastructure ............................................................... 14

3.5 Iraq, Power Market, Opportunities ..................................................................................... 15

3.6 Iraq, Power Market, Challenges ........................................................................................ 15

4 Iraq, Power Market, Market Analysis ......................................................................................... 17

4.1 Iraq, Power Market, Supply Structure ................................................................................ 17

4.2 Iraq, Power Market, Key Market Players ........................................................................... 17

4.3 Iraq, Power Market, Financial Deals .................................................................................. 18

4.3.1 Deal Volume and Value Analysis, 2004–2012 ............................................................... 18

4.3.2 Deals by Type, 2012 ..................................................................................................... 19

4.4 Saudi Arabia, Power Market, Demand Structure ............................................................... 19

4.4.1 Electricity Consumption by Sector, 2013 ....................................................................... 22

5 Iraq, Power Market, Regulatory Scenario .................................................................................. 23

5.1 Iraq, Power Market, Key Electricity Policies ...................................................................... 23

5.1.1 Electricity Master Plan to 2030 ...................................................................................... 23

5.1.2 Privatization Plans ......................................................................................................... 24

5.2 Iraq, Power Market, Renewable Energy Policy.................................................................. 25


Table of Contents


5.3 Iraq, Power Market, Foreign Investment Scenario ............................................................. 25

5.3.1 Policies for Foreign Investment in the Power Market ..................................................... 26

6 Iraq, Power Market, Capacity and Generation Overview ........................................................... 27

6.1 Iraq, Power Market, Cumulative Installed Capacity, Breakdown by Fuel Type, 2013......... 27

6.2 Iraq, Power Market, Cumulative Installed Capacity and Annual Power Generation, 2000–2030 .................................................................................................................................. 28

6.2.1 Cumulative Installed Thermal Capacity and Annual Thermal Power Generation, 2000–2030 ............................................................................................................................. 31

6.2.2 Cumulative Hydropower Installed Capacity and Annual Hydropower Generation, 2000–2030 ............................................................................................................................. 36

6.2.3 Cumulative Installed Renewable Capacity and Annual Renewable Power Generation, 2000–2030 ................................................................................................................... 39

7 Iraq, Power Market, Transmission and Distribution Overview ................................................... 40

7.1 Iraq, Power Market, Transmission Overview ..................................................................... 40

7.1.1 Upcoming Domestic Interconnection Projects ............................................................... 41

7.2 Iraq, Power Market, Distribution Overview ........................................................................ 42

7.3 Iraq, Power Market, Grid Interconnection .......................................................................... 42

7.3.1 Planned Interconnections .............................................................................................. 42

7.3.2 Electricity Import and Export Trends, 2000–2013 .......................................................... 43

7.4 Iraq, Power Market, Electricity Trading .............................................................................. 44

8 Iraq, Power Market, Competitive Landscape: Snapshot of Leading Power Generating

Companies ............................................................................................................................... 45

8.1 Key Company in the Iraq Power Market: Ministry of Electricity of Iraq ............................... 45

8.1.1 Company Overview ....................................................................................................... 45

8.1.2 Business Description ..................................................................................................... 45

8.1.3 SWOT Overview ........................................................................................................... 46

9 Appendix ................................................................................................................................... 50

9.1 Market Definitions ............................................................................................................. 50


Table of Contents


9.1.1 Power ............................................................................................................................ 50

9.1.2 Installed Capacity .......................................................................................................... 50

9.1.3 Electricity Generation .................................................................................................... 50

9.1.4 Electricity Consumption ................................................................................................. 50

9.1.5 Thermal Power Plant ..................................................................................................... 50

9.1.6 Hydropower Plant .......................................................................................................... 50

9.1.7 Nuclear Power............................................................................................................... 50

9.1.8 Renewable Energy Resources ...................................................................................... 51

9.2 Abbreviations .................................................................................................................... 51

9.3 Bibliography ...................................................................................................................... 52

9.4 GlobalData’s Methodology ................................................................................................ 54

9.4.1 Coverage ...................................................................................................................... 54

9.4.2 Secondary Research and Analysis ................................................................................ 54

9.4.3 Primary Research and Analysis..................................................................................... 55

9.5 Disclaimer ......................................................................................................................... 56


Table of Contents


1.1 List of Tables

Table 1: Power Market, Iraq, Gross Domestic Product ($bn), Population (million) and Annual Power

Consumption (TWh), 2000–2018 ................................................................................................. 13

Table 2: Power Market, Iraq, Deal Value ($bn) and Number of Deals, 2004–2012 .......................................... 19

Table 3: Power Market, Iraq, Annual Power Consumption (TWh), 2000–2030 ................................................ 21

Table 4: Power Market, Iraq, Electricity Consumption by Sector (%), 2013 ..................................................... 22

Table 5: Power Market, Iraq, Master Plan Financial Requirements ($bn), 2014–2017 .................................... 24

Table 6: Power Market, Iraq, Cumulative Installed Capacity Breakdown by Fuel Type (%), 2013 .................... 27

Table 7: Power Market, Iraq, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh), 2000–

2030............................................................................................................................................ 30

Table 8: Power Market, Iraq, Leading Active Thermal Power Plants, 2013 ..................................................... 32

Table 9: Power Market, Iraq, Leading Upcoming Thermal Power Plants, 2014–2030 ..................................... 33

Table 10: Power Market, Iraq, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal Power

Generation (TWh), 2000–2030 .................................................................................................... 35

Table 11: Power Market, Iraq, Cumulative Installed Hydropower Capacity (GW) and Annual Hydropower

Generation (TWh), 2000–2030 .................................................................................................... 38

Table 12: Power Market, Iraq, Growth of Transmission System (Ckm), 2000–2020 ........................................ 41

Table 13: Power Market, Iraq, Planned Interconnections by Capacity (MW) and Voltage (kV), 2013 ............... 42

Table 14: Power Market, Iraq, Electricity Imports (TWh), 2000–2013.............................................................. 44

Table 15: Power Market, Iraq, Ministry of Electricity of Iraq, SWOT Profile, 2013 ............................................ 46

Table 16: Abbreviations ................................................................................................................................. 51


Table of Contents


1.2 List of Figures

Figure 1: Power Market, Iraq, Gross Domestic Product ($bn) and Population (million), 2000–2018 ............. 12

Figure 2: Power Market, Iraq, Annual Power Consumption (TWh), 2000–2018 ........................................... 12

Figure 3: Power Market, Iraq, Deal Value ($bn) and Number of Deals, 2004–2012 ..................................... 18

Figure 4: Power Market, Iraq, Annual Power Consumption (TWh), 2000–2030 ........................................... 20

Figure 5: Power Market, Iraq, Electricity Consumption by Sector (%), 2013 ................................................ 22

Figure 6: Power Market, Iraq, Cumulative Installed Capacity Breakdown by Fuel Type (%), 2013 ............... 27

Figure 7: Power Market, Iraq, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh),

2000–2030 .................................................................................................................................. 29

Figure 8: Power Market, Iraq, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal

Power Generation (TWh), 2000–2030 ......................................................................................... 34

Figure 9: Power Market, Iraq, Cumulative Installed Hydropower Capacity (GW) and Annual Hydropower

Generation (TWh), 2000–2030 .................................................................................................... 37

Figure 10: Power Market, Iraq, Electricity Imports (TWh), 2000–2013 ........................................................... 43



Introduction

2 Introduction

Iraq’s economy is showing signs of improvement, supported by the growth of oil production in 2012

and by persistently high global oil prices. The country’s state-dominated economy is highly

dependent upon the oil economy, which accounts for more than XX% of the government’s revenue

and XX% of foreign exchange earnings (CIA, 2014).

Politically, Iraq has been a parliamentary democracy since the establishment of the constitution in

2005. Historically, it has been one of the most unstable countries in the Middle East. The Gulf War

in the 1990s and the subsequent US-led occupation of the country have contributed to a current

environment of political and economic uncertainty. The US established a Coalition Provisional

Authority in the country, followed by an interim government. Despite these measures, the

legitimacy of the current Iraqi government remains under question.

Many of Iraq’s oil export facilities were destroyed in conflict in the 1980s. Since 2003, the

government has been trying to rebuild the economy in order to attract higher foreign investment. In

2010, the country signed an agreement with the International Monetary Fund (IMF) and the World

Bank in order to receive conditional aid programs and strengthen its economic institutions. Some

leaders in the country are pushing for the establishment of a national investment framework and a

number of modern legal frameworks (especially for the modernization of the oil sector).

The country’s Gross Domestic Product (GDP) increased at an average rate of XX% annually

between 2008 and 2012. However, there was a drastic decline in 2013, with the GDP growing at an

estimated XX% over 2012. Growth is expected to revive in 2014 and a Compound Annual Growth

Rate (CAGR) of XX% is forecast until 2018 (IMF, 2013).

Recent improvement in the security environment and inward foreign investment has acted as a

stimulus for Iraq’s economy, benefiting the energy, construction, and retail sectors in particular.

Broader economic development and improvement in the overall standard of living are factors that

will be dependent upon further policy reforms. On the whole, the increased purchasing capacity of

the population has resulted in higher electricity demand, which has created a serious disparity

between supply and demand.

Over the years, conflict has destroyed many of Iraq’s power plants and transmission and

distribution systems, seriously compromising power supply and impeding significant investment in

the power sector. In 2003, Iraq embarked upon a program for the reconstruction of its old power



Introduction

plants and the construction of new ones, in order to meet the increased demand for electricity. The

country’s energy master plan from 2012 to 2017 has further boosted investment in the power

sector. A new energy strategy approved by the government in 2013 has a set a target for XX% of

total generation to be accounted for by renewables by 2030.

Iraq’s Ministry of Electricity is the single largest government body responsible for the generation,

transmission and distribution of electricity in the country. The Ministry was established in 2003 and

is responsible for the entirety of the country’s installed capacity.

2.1 GlobalData Report Guidance

The executive summary captures key growth trends in the Iraq power market.

Chapter three provides a snapshot of the key parameters affecting Iraq’s power sector, as well

as key points about the power market.

Chapter four provides power market analysis for Iraq.

Chapter five details the regulatory scenario of the power market and the inward foreign

investment scenario in the country.

Chapter six provides information on cumulative installed capacity and annual generation

trends, as a whole and by individual generation source.

Chapter seven describes the power transmission and distribution infrastructure in Iraq and

provides information on interconnectors with neighboring countries. The section also covers

electricity import and export and upcoming grid-related projects in the country.

Note: all 2013 market numbers provided in the report are estimates, except where actual data was

available.



Iraq, Power Market, Market Analysis

4.3 Iraq, Power Market, Financial Deals

4.3.1 Deal Volume and Value Analysis, 2004–2012

The activity level for the deals market of the power sector of Iraq was quite low during the period

covered, which reflects the poor nature of power sector development in the country. While the total

number of deals in any single year amounted to only five in 2007, the highest total deal value in

any single year during the entire period was $XX billion, also in 2007, while the lowest value

amounted to $XXm. The average deal value during this period amounted to $XX billion.

Figure 3: Power Market, Iraq, Deal Value ($bn) and Number of Deals, 2004–2012

2004 2005 2006 2007 2008 2009 2010 2011 2012

Num

ber o

f dea

ls

Dea

l val

ue ($

bn)

Deal value Number of deals Source: GlobalData, Deals Database [Accessed on: March 12, 2014]



Iraq, Power Market, Market Analysis

4.4.1 Electricity Consumption by Sector, 2013

The residential sector is the largest single electricity consumer in Iraq, accounting for an estimated

XX% of total electricity consumption as of 2013, followed by the industrial sector with XX% and the

commercial sector with XX%. Other smaller consumers, including government offices and other

public bodies, accounted for the remaining XX% share in 2013.

Figure 5: Power Market, Iraq, Electricity Consumption by Sector (%), 2013

Residential

IndustrialTrade, commerce, and other services

Other

Source: GlobalData

Table 4: Power Market, Iraq, Electricity Consumption by Sector (%), 2013

Sector Consumption

Residential

Industrial

Trade, commerce, and other services

Other

Source: GlobalData


Appendix


9 Appendix

9.1 Market Definitions

9.1.1 Power

Power refers to the rate of production, transfer or energy use, usually related to electricity. It is

measured in Watts (W) and often expressed in kilowatts (kW) or Megawatts (MW). It is also known

as real power or active power.

9.1.2 Installed Capacity

Installed capacity refers to the generator’s nameplate capacity as stated by the manufacturer, or

the maximum rated output of a generator under given conditions. It is given in Megawatts (MW) on

a nameplate affixed to the generator.

9.1.3 Electricity Generation

Electricity generation refers to the process of generating electricity from other forms of energy. It

also refers to the amount of electricity produced, expressed in Gigawatt hours (GWh).

9.1.4 Electricity Consumption

Electricity consumption is the sum of electricity generated, plus imports, minus exports and

transmission and distribution losses. It is measured in Gigawatt hours (GWh).

9.1.5 Thermal Power Plant

A thermal power plant is a plant in which turbine generators are driven by burning fossil fuels.

9.1.6 Hydropower Plant

A hydropower plant is a plant in which the turbine generators are driven by falling water.

9.1.7 Nuclear Power

Nuclear power is the energy released from the fission of nuclear fuel in a reactor.


Appendix


9.1.8 Renewable Energy Resources

Renewable energy resources are those that provide energy that is naturally replenished but limited

in the amount of energy available per unit of time. Biomass, geothermal, solar, small hydro and

wind are examples of renewable resources.

9.2 Abbreviations

Table 16: Abbreviations CAGR Compound Annual Growth Rate

CCGT Combined-Cycle Gas Turbine

Ckm Circuit kilometer

GDP Gross Domestic Product

GW Gigawatt

IMF International Monetary Fund

IPP Independent Power Producer

kV kilovolt

MW Megawatt

NIC National Investment Commission

Source:TWh Terawatt hour


Appendix


9.3 Bibliography

Al-Hayat (2013). Electricity Shortage Costs Iraq Economy $40 Billion a Year. Al-Monitor.

Available from: http://www.al-monitor.com/pulse/business/2013/09/iraq-oil-energy-crisis.html

[Accessed on: March 12, 2014]

AUPTDE (2011). Statistical Bulletin, 2011, 20th Issue. Arab Union of Electricity. Available from:

http://www.auptde.org/Article_Files/2011.pdf

AUPTDE (2012). Statistical Bulletin 2012 Issue 21. Arab Union of Electricity. Available from:

http://www.auptde.org/Article_Files/main2012.pdf

BP (2013). BP Statistical Review of World Energy, June 2013 [database]. British Petroleum.

Available at: http://www.bp.com/content/dam/bp/excel/Statistical-

Review/statistical_review_of_world_energy_2013_workbook.xlsx [Accessed on: March 19,

2014]

CIA (2007). Iraq Economic Data (1989-2003), Regime Finance and Procurement - Annex D.

Central Intelligence Agency. Available from: https://www.cia.gov/library/reports/general-reports-

1/iraq_wmd_2004/chap2_annxD.html [Accessed on: March 19, 2014]

CIA (2014). Iraq: The World Factbook. Central Intelligence Agency. Available from:

https://www.cia.gov/library/publications/the-world-factbook/geos/iz.html [Accessed on March

13, 2014]

EIA (2014). Table: Total Electricity Imports (Billion Kilowatt hours) [database]. US Energy

Information Administration. Available from:

http://www.eia.gov/cfapps/ipdbproject/XMLinclude_3.cfm?tid=2&pid=2&pdid=&aid=3&cid=IZ&tit

leStr=Total%20Electricity%20Imports%20(Billion%20Kilowatthours)&syid=2000&eyid=2012&fo

rm=&defaultid=0&typeOfUnit=STDUNIT&unit=BKWH&products= [Accessed on: March 12,

2014]

Fletcher Forum (2013). An Interview with Dr. Samir Raouf. The Fletcher Forum. Available from:

http://www.fletcherforum.org/2013/12/27/raouf/ [Accessed on: March 10, 2014]

IEA (2012). Iraq Energy Outlook. International Energy Agency. Available from:

http://www.iea.org/publications/freepublications/publication/WEO_2012_Iraq_Energy_Outlook-

1.pdf


Appendix


IMF (2013). World Economic Outlook Database, April 2013 [database]. International Monetary

Fund. Available at: http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/download.aspx

[Accessed on March 5, 2014]

Larkin J (2011). Iraq and Kurdistan Electricity Masterplan – summary and recommendations.

Parsons Brinckerhoff. Available from:

http://core.theenergyexchange.co.uk/agile_assets/1513/1200_-_JEFF.pdf

MEED (2013). Iraq’s Big Plans for Renewable Energy. MEED via Iraq Business News.

Available from: http://www.iraq-businessnews.com/2013/03/27/iraqs-big-plans-for-renewable-

energy/ [Accessed on: March 10, 2014]

NEPCO (2013). Electricity Interconnection Projects. National Electric Power Company.

Available from: http://www.nepco.com.jo/en/electrical_interconnection_en.aspx [Accessed on:

March 12, 2014]

NIC (2013). The Role of Government in Electricity. Republic of Iraq National Investment

Commission. Available from: http://investpromo.gov.iq/wp-

content/uploads/2013/06/the_role_of_govt_electricity_sector_en.pdf

Ratcliffe, V (2012). Power generation a top priority in Iraq. MEED. Available from:

http://www.meed.com/supplements/2012/iraq-projects/power-generation-a-top-priority-in-

iraq/3129589.article [Accessed on: March 10, 2014]

UNIDO and ICSHP (2013). World Small Hydropower Development Report 2013: Iraq. United

Nations Industrial Development Organization (UNIDO) and International Center on Small

Hydro Power (ICSHP). Available from:

http://www.smallhydroworld.org/fileadmin/user_upload/pdf/Asia_Western/WSHPDR_2013_Iraq

.pdf


Appendix


9.4 GlobalData’s Methodology

GlobalData’s dedicated research and analysis teams consist of experienced professionals with

advanced statistical expertise and marketing, market research and consulting backgrounds in the

energy industry.

GlobalData adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and

Strategic and Competitive Intelligence Professionals (www.scip.org).

All of GlobalData’s databases are continuously updated and revised. The following methodology

has been followed for the collection and analysis of data presented in this report.

9.4.1 Coverage

This report covers Iraq’s power market, examining the market structure and providing historical and

providing generation, capacity and consumption forecasts until 2030. It also looks at the market’s

regulatory structure, import and export trends, competitive landscape and leading active and

upcoming power projects.

9.4.2 Secondary Research and Analysis

The capacity, generation and consumption data is collected and validated using a number of

secondary resources including but not limited to:

Government agencies, ministerial websites, industry associations, the World Bank and

statistical databases

Company websites, annual reports, financial reports, broker reports and investor presentations

Industry trade journals, market reports and other literature

GlobalData’s proprietary databases such as the Capacity and Generation Database, Power

Plant Database and Transmission and Distribution Database

Further to this, the following secondary information is collected and analyzed to project Iraq’s

power market scenario to 2030, analyzing factors such as:

Macro-economic scenario

Government regulations, policies and targets

Government and private sector investment


Appendix


Contract and deal announcements

Utility expansion plans

The sector’s historic track record

Other qualitative insights built through secondary research and analysis of company websites,

annual reports, investor presentations, industry and trade journals, and data from industry

associations.

9.4.3 Primary Research and Analysis

Secondary research is further complemented through primary interviews with industry participants

to verify the market numbers obtained through secondary research and obtain first-hand

information on industry trends.

The participants are drawn from a diverse set of backgrounds, including equipment manufacturers,

industry associations, government bodies, utilities, distributors, and academia. The participants

include but are not limited to C-level executives, industry consultants, academic experts, business

development and sales managers, purchasing managers, plant managers, government officials

and industry spokespeople.


Appendix


9.5 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission of the publisher, GlobalData.

This report is a licensed product and should not to be reproduced without prior permission.

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