gdpe0781icr- iraq power market outlook sample 1,2,4 … · reference code gdpe0781icr | publication...

REFERENCE CODE GDPE0781ICR | PUBLICATION DATE MAY 2015

IRAQ POWER MARKET OUTLOOK TO 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS, AND

COMPETITIVE LANDSCAPE

Iraq Power Market Outlook to 2025, Update 2015 – 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 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS, AND COMPETITIVE LANDSCAPE

Executive Summary

Iraq’s Power Sector Outlook

Iraq’s economic scenario is currently underscored

by worsening security conditions and political

instability. These are driven by insurgency, falling

global oil prices, and domestic political turmoil. Oil

exports, which are the principal revenue earner for

the government, remained relatively flat in 2014,

leading to negative growth that year. With the

residential sector accounting for the largest share

of power consumption, it was not affected by the

economic downturn, as shown in the following

figure.

Power Market, Iraq, Gross Domestic Product ($bn), and Annual Power Consumption (TWh), 2000–2014

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Ann

ual p

ower

con

sum

ptio

n (T

Wh)

GD

P ($

bn)

GDP (constant prices) Annual power consumption Source: GlobalData; IMF, 2014 GDP: Gross Domestic Product; TWh: Terawatt hour

Iraq’s annual power consumption increased from

XX TWh in 2000 to XX TWh in 2014 at a

Compound Annual Growth Rate (CAGR) of XX%

as a result of economic and population growth.

Generation increased during the same period from

XX TWh in 2000 to XX TWh in 2014, at a CAGR of

XX%. This growth consists almost entirely of

increased thermal generation, while renewable

generation is still in the nascent stages of

development.

Power Market, Iraq, Annual Power Consumption and Generation (TWh), 2000–2014

2000 2007 2014

Annu

al p

ower

con

sum

ptio

n an

d ge

nera

tion

(TW

h)

Annual power consumption Annual power generation Source: GlobalData, Power Database [Accessed on: May 4, 2015]

Thermal sources currently dominate Iraq’s power

mix with a XX% share of the total installed capacity

as of 2014, of which gas-based thermal capacity

accounted for XX% and oil-based capacity

accounted for XX%. The remaining XX% came

from hydropower.


Table of Contents


1 Table of Contents

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

1.1 List of Tables ...................................................................................................................... 6

1.2 List of Figures ..................................................................................................................... 7

2 Introduction ................................................................................................................................. 8

2.1 GlobalData Report Guidance .............................................................................................. 9

3 Iraq, Power Market, Snapshot ................................................................................................... 10

3.1 Iraq, Power Market, Macroeconomic Factors .................................................................... 10

3.2 Iraq, Power Market, Supply Security ................................................................................. 12

3.3 Iraq, Power Market, Opportunities ..................................................................................... 13

3.4 Iraq, Power Market, Challenges ........................................................................................ 13

4 Iraq, Power Market, Market Analysis ......................................................................................... 15

4.1 Iraq, Power Market, Supply Structure ................................................................................ 15

4.2 Iraq, Power Market, Key Market Players ........................................................................... 15

4.3 Iraq, Power Market, Financial Deals .................................................................................. 16

4.3.1 Deal Volume and Value Analysis, 2004–April 2015 ....................................................... 16

4.4 Iraq, Power Market, Demand Structure ............................................................................. 17

4.4.1 Power Consumption by Sector, 2014 ............................................................................ 20

5 Iraq, Power Market, Regulatory Scenario.................................................................................. 21

5.1 Iraq, Power Market, Key Electricity Policies ...................................................................... 21

5.1.1 Electricity Master Plan to 2030 ...................................................................................... 21

5.1.2 Privatization Plans ......................................................................................................... 22

5.2 Iraq, Power Market, Renewable Energy Policy.................................................................. 23

5.3 Iraq, Power Market, Foreign Investment Scenario ............................................................. 23

5.3.1 Policies for Foreign Investment in the Power Market ..................................................... 23

6 Iraq, Power Market, Capacity and Generation Overview ........................................................... 25

6.1 Iraq, Power Market, Cumulative Installed Capacity by Fuel Type, 2014 ............................ 25


Table of Contents


6.2 Iraq, Power Market, Cumulative Installed Capacity and Annual Power Generation, 2000–2025 .................................................................................................................................. 26

6.2.1 Cumulative Installed Thermal Capacity and Annual Thermal Power Generation, 2000–2025 ............................................................................................................................. 29

6.2.2 Cumulative Hydropower Installed Capacity and Annual Hydropower Generation, 2000–2025 ............................................................................................................................. 33

6.2.3 Cumulative Installed Renewable Capacity and Annual Renewable Power Generation, 2000–2025 ................................................................................................................... 36

7 Iraq, Power Market, Transmission and Distribution Overview ................................................... 37

7.1 Iraq, Power Market, Transmission Overview ..................................................................... 37

7.1.1 Upcoming Domestic Interconnection Projects ............................................................... 38

7.2 Iraq, Power Market, Distribution Overview ........................................................................ 39

7.3 Iraq, Power Market, Grid Interconnection .......................................................................... 39

7.3.1 Planned Interconnections .............................................................................................. 39

7.3.2 Electricity Import and Export Trends, 2000–2014 .......................................................... 40

7.4 Iraq, Power Market, Electricity Trading .............................................................................. 41

8 Iraq, Power Market, Competitive Landscape: Snapshot of Leading Power Generating Companies ............................................................................................................................... 42

8.1 Key Company in the Iraq Power Market: Ministry of Electricity, Iraq .................................. 42

8.1.1 Company Overview ....................................................................................................... 42

8.1.2 Business Description ..................................................................................................... 42

8.1.3 SWOT Overview ........................................................................................................... 43

9 Appendix................................................................................................................................... 47

9.1 Market Definitions ............................................................................................................. 47

9.1.1 Power ............................................................................................................................ 47

9.1.2 Installed Capacity .......................................................................................................... 47

9.1.3 Electricity Generation .................................................................................................... 47

9.1.4 Electricity Consumption ................................................................................................. 47

9.1.5 Thermal Power Plant ..................................................................................................... 47


Table of Contents


9.1.6 Hydropower Plant .......................................................................................................... 47

9.1.7 Nuclear Power............................................................................................................... 47

9.1.8 Renewable Energy Resources ...................................................................................... 48

9.2 Abbreviations .................................................................................................................... 48

9.3 Bibliography ...................................................................................................................... 48

9.4 GlobalData’s Methodology ................................................................................................ 50

9.4.1 Coverage ...................................................................................................................... 50

9.4.2 Secondary Research and Analysis ................................................................................ 50

9.4.3 Primary Research and Analysis..................................................................................... 51

9.5 Disclaimer ......................................................................................................................... 52

1.1 List of Tables

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

Consumption (TWh), 2000–2019 ................................................................................................. 12

Table 2: Power Market, Iraq, Deal Value ($bn) and Number of Deals, 2004–April 2015 ............................. 17

Table 3: Power Market, Iraq, Annual Power Consumption (TWh), 2000–2025 ........................................... 19

Table 4: Power Market, Iraq, Power Consumption by Sector (%), 2014 ..................................................... 20

Table 5: Power Market, Iraq, Master Plan Financial Requirements ($bn), 2014–2017 ................................ 22

Table 6: Power Market, Iraq, Cumulative Installed Capacity by Fuel Type (%), 2014 ................................. 25

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

2000–2025 .................................................................................................................................. 28

Table 8: Power Market, Iraq, Leading Thermal Power Plants, 2015 ........................................................... 30

Table 9: Power Market, Iraq, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal

Power Generation (TWh), 2000–2025 ......................................................................................... 32

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

Generation (TWh), 2000–2025 .................................................................................................... 35


Table of Contents


Table 11: Power Market, Iraq, Growth of Transmission System (Ckm), 2000–2020 ..................................... 38

Table 12: Power Market, Iraq, Planned Interconnections by Capacity (MW) and Voltage (kV), 2014 ............ 39

Table 13: Power Market, Iraq, Electricity Imports (TWh), 2000–2014 ........................................................... 41

Table 14: Power Market, Iraq, Ministry of Electricity, Iraq, SWOT Profile, 2014 ............................................ 43

Table 15: Abbreviations .............................................................................................................................. 48

1.2 List of Figures

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

Consumption (TWh), 2000–2019 ................................................................................................. 11

Figure 2: Power Market, Iraq, Deal Value ($bn) and Number of Deals, 2004–April 2015 ............................. 16

Figure 3: Power Market, Iraq, Annual Power Consumption (TWh), 2000–2025 ........................................... 18

Figure 4: Power Market, Iraq, Power Consumption by Sector (%), 2014 ..................................................... 20

Figure 5: Power Market, Iraq, Cumulative Installed Capacity by Fuel Type (%), 2014 ................................. 25

Figure 6: Power Market, Iraq, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh),

2000–2025 .................................................................................................................................. 27

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

Power Generation (TWh), 2000–2025 ......................................................................................... 31

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

Generation (TWh), 2000–2025 .................................................................................................... 34

Figure 9: Power Market, Iraq, Electricity Imports (TWh), 2000–2014 ........................................................... 40



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 state-dominated economy is highly dependent on the

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

exchange earnings (CIA, 2015).

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 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. There was a drastic decline in 2013, with the GDP growing at an

estimated XX% over 2012. The economy dived still more in 2014 with negative growth of XX%

(IMF, 2014).

Recent improvements to the security environment and inward foreign investment have 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 on further policy reforms. Overall, the increased purchasing capacity of the

population has resulted in a 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 on 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. Established in 2003, it is responsible for

all 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.

Note: all 2014 market numbers provided in the report are estimates, except where actual data was

available.



Market Analysis

4.4.1 Power Consumption by Sector, 2014

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

XX% of consumption as of 2014, 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.

Figure 4: Power Market, Iraq, Power Consumption by Sector (%), 2014

Residential

Industrial

Trade, commerce, and other services

Other

Source: GlobalData

Table 4: Power Market, Iraq, Power Consumption by Sector (%), 2014 Sector Consumption

Residential

Industrial

Trade, commerce, and other services

Other

Source: GlobalData



Capacity and Generation Overview

6.2 Iraq, Power Market, Cumulative Installed Capacity and Annual Power Generation, 2000–2025

Cumulative power generation capacity in Iraq amounted to XX GW in 2000, increasing to XX GW in

2014 at a CAGR of XX%. This total is expected to further increase from XX GW in 2015 to XX GW

in 2025 at a CAGR of XX%.

Iraq’s electricity generation sources are currently hydropower and thermal power from gas and oil.

Most of its power generation infrastructure was destroyed in conflict leading up to 2003, and the

country has since been engaged in its reconstruction. The size of its thermal power capacity base

increased at a CAGR of XX% between 2000 and 2014, with the highest amount of growth

registered after 2007. Thermal power dominates its power mix, as the country is rich in

hydrocarbon reserves. This dominance is expected to continue during the forecast period.

Hydropower capacity has been constant and is not expected to register much growth during the

forecast period. In fact, GlobalData expects a dip in the utilization of hydropower capacity during

the forecast period, as the power generation potential of Iraq’s rivers is affected by the construction

of hydropower generation facilities in countries further upstream.

Annual power generation in Iraq amounted to XX TWh in 2000, increasing to XX TWh in 2014 at a

CAGR of XX%. It is expected to display the same trend as total capacity and increase from XX

TWh in 2015 to XX TWh in 2025 at a CAGR of XX%.




Figure 6: Power Market, Iraq, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh), 2000–2025

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Ann

ual p

ower

gen

erat

ion

(TW

h)

Cum

ulat

ive

inst

alle

d ca

paci

ty (G

W)

Cumulative installed capacity Annual power generation Source: GlobalData, Power Database [Accessed on: April 30, 2015]




Table 7: Power Market, Iraq, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh), 2000–2025

Year Cumulative installed capacity Annual power generation

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: GlobalData, Power Database [Accessed on: April 30, 2015]


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 15: Abbreviations CAGR Compound Annual Growth Rate

CCGT Combined-Cycle Gas Turbine

CIA Central Intelligence Agency

Ckm Circuit kilometer

FiT Feed-in Tariff

GDP Gross Domestic Product

GW Gigawatt

IMF International Monetary Fund

IPP Independent Power Producer

kV kilovolt

MW Megawatt

NIC National Investment Commission

PV Photovoltaic

TWh Terawatt hour

Source: GlobalData

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: May 2, 2015].

BP (2014). BP Statistical Review of World Energy, June 2014 [database]. British Petroleum.

Available at: http://www.bp.com/content/dam/bp/excel/Energy-Economics/statistical-review-

2014/BP-Statistical_Review_of_world_energy_2014_workbook.xlsx [Accessed on: April 30,

2015].


Appendix


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: May 2, 2015].

CIA (2015). Iraq: The World Factbook. Central Intelligence Agency. Available from:

https://www.cia.gov/library/publications/the-world-factbook/geos/iz.html [Accessed on May 4,

2015].

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

http://www.fletcherforum.org/2013/12/27/raouf/ [Accessed on: May 2, 2015]

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

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

1.pdf

IMF (2014). World Economic Outlook Database, April 2013 [database]. International Monetary

Fund. Available at: http://www.imf.org/external/pubs/ft/weo/2014/02/weodata/index.aspx

[Accessed on May 4, 2015]

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: May 1, 2015].

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

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

May 2, 2015].

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: May 1, 2015]


Appendix


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

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 2025. 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


Appendix


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

power market scenario to 2025, analyzing factors such as:

Macro-economic scenario

Government regulations, policies and targets

Government and private sector investment

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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