The Covid-19 pandemic shone a bright light on structural weakness in countries across the world.
There was no more covering up long-standing issues that were easier to ignore before our lives were upended. In some countries, it was the chronic under-investment in healthcare that meant even richer countries could not properly protect their citizens.
In others, ever growing polarisation across societies came to a boil, manifesting itself in full-blown culture wars that even swallowed up issues as ostensibly benign as the need for vaccinations. In Iraq, poverty rates doubled in a single year as oil prices fell, further accentuating the fact that the oil-dominated economy has structural weaknesses that need to be addressed immediately. The energy sector can play a role here, especially if Iraq seriously heeds this wake up call and starts making more of its abundant renewables potential.
The laundry list of the problems in Iraq’s electricity sector is too long for this article. Perhaps most importantly, Iraq cannot supply enough electricity to meet its citizens’ demand. This leads to cuts that are the cause of untold misery, especially during the hot summer months. The shortage of electricity is also a huge drain on the economy. So far, efforts have focused on trying to build generation capacity, usually gas-fired. But demand is growing at a rate of between 7-10% per year, so it will be difficult to catch up by simply building more generators. What’s more, a lot of the problem is not that Iraq lacks generating capacity, but that as much as half of what is generated is lost in the transmission and distribution lines — such losses are among the worst in the world.
This is one of the reasons solar power could play such an important role. Utility scale solar can be deployed virtually anywhere in the country. Resource is not a constraint. The worst solar sites in Iraq get 60% more “direct normal irradiation” than the best sites in Germany — which has 2.5 more solar capacity than Iraq has total functional electricity capacity! What this means is that if the deployment of solar is designed properly, it can be placed in places that avoid the worst parts of the grid, and therefore minimise the level of the technical losses suffered in transmission.
The case is doubly strong for rooftop solar systems (smaller and more costly, but can be deployed on the flat roofs of most Iraqi homes). This would bypass the crumbling distribution network entirely, and would therefore be a more reliable source of electricity for many consumers. It would also allow consumers to reduce their reliance on neighbourhood generators, who can charge what is probably the highest tariff for electricity in the world (translating to $1,300/MWh, which means that an average household in Baghdad could typically be paying up to four times as much for electricity as a German one does).
The case for solar is strengthened further by the fact that it is becoming cost-competitive with oil and gas-fired power generation that Iraq currently relies on. Solar costs have come down to around $34/MWh in the region, this compares to $200/MWh cost of grid electricity consumed in Iraq. But there are second-order economic and financial benefits too: solar generation can displace some natural gas use, which is mostly imported at significant cost. Being able to at least reduce the growth in import demand could be beneficial to the trade balance, but also crucially, to Iraq’s energy security.
A study published in 2019 by the International Energy Agency showed that moving towards greater renewables deployment could “improve the affordability, reliability and sustainability of electricity supply,” and that this would also offer “reliability advantages, provide electricity to consumers at the lowest average cost, while also freeing up oil and gas for other uses, or for export.” This is important. If Iraq uses more renewables, it is burning less of the natural resources it extracts, and if it manages to do so while reducing losses in the grid, the amount of fuel it saves could be worth an additional $10 billion by 2030.
But there are other compelling reasons Iraq needs to go down this route. The concentration of fine particulate matter (PM2.5, which can penetrate the lungs and be a particularly harmful pollutant) in the air across Iraq is on average over six-times the recommended upper limit set by the World Health Organization. This is likely to be much worse in some areas, like Basra, where local generators compound an already miserable local environmental catastrophe caused by the flaring of natural gas in the oil fields.
It is clear that for reasons ranging from simple economics, to energy security and reliability, renewables and particularly solar power, need to play a much larger role in Iraq’s energy mix. One fundamental point that needs more attention and focus, though, is that across the world, countries are redoubling efforts to stall climate change. Iraq and countries across our region cannot remain on the side-lines of this global effort. They have skin in the game. The Middle East is one of the fastest-warming regions in the world; average temperatures in Iraq are increasing at a rate that is 2 to 7 times faster than global average temperature rise.
Not only would increasing the use of renewables help put Iraq on a more sustainable pathway, it could also alleviate one of the most severe risks to Iraq’s oil dependent economy — the decline in oil revenues because of a structural global shift away from fossil fuels. If Iraq could orientate an industrial policy around the supply chains and auxiliary sectors needed to manufacture, install and maintain the necessary infrastructure, then the shift to renewables could create meaningful jobs and value for the local economy. According to one study, each $1 million invested in renewable electricity and grids could generate up to 14 jobs. This is a crucial consideration in a country whose population is growing at a rate of 1 million per year and where youth unemployment rates are estimated to top 25%.
There has been some recent movement that suggests Iraq is taking steps in this direction, including an intention announced earlier this year that Iraq would install 10 gigawatts of solar capacity by 2030. But the road from intention to action is arduous, and many have gotten lost along the way. For the sake of the people, the economy and the environment, this transition needs to happen.
About the Writer
Ali Al-Saffar is an Iraqi-Brit who lives in Paris. Working in energy, he is obsessed with trying to promote more sustainable practices in Iraq.
