Electricity and Energy

Chapter profile

1. Executive summary

This chapter opens with a reality that must not be glossed over: in 2026, electricity in Iraq remained an inadequate service despite tens of billions of dollars invested over the years. The Ministry of Electricity announced a summer plan targeting around 30 thousand megawatts, while estimated peak demand reaches approximately 60 thousand megawatts — a gap of nearly half at peak time. This is not an exact measure for every hour or governorate, but it establishes that “closing the gap” cannot wait for a single generation project.¹

At the same time, IRENA’s assessment, conducted with state institutions, shows achieved capacity of approximately 27,445 megawatts by the end of 2024. The distinction between “installed/achieved capacity” and “power available at peak hour” is fundamental: summer heat reduces some units’ performance, fuel may not arrive, a unit may be under maintenance, a transmission line may be congested, or a transformer or feeder may prevent delivery. Vision 2045 therefore starts with chain reliability, not turbine counts.²

The largest gap repairable without a new power plant lies in distribution. The International Monetary Fund recorded distribution losses of 55% in 2024, driven by theft, irregular connections and weak metering. Collection improved by approximately 20% in 2024 but remained inadequate. This does not mean all losses are theft or that reducing them immediately equals generation megawatts; it means grid, meter and collection reform can turn a substantial share of generated electricity into service and revenue rather than waste.³

Fuel is the second bottleneck. The World Bank’s 2026 Global Gas Flaring report estimates that Iraq flared approximately 24 billion cubic metres of gas in 2025, while importing around 6 billion cubic metres from Iran in the same year, after 9 billion in 2024, with a further major supply decline during 2026. The comparison is striking but does not justify assuming all flared gas can be captured tomorrow: some is dispersed across different fields and requires gathering, processing, compression, pipelines and an offtake contract. The right decision is to turn “zero flaring” into a portfolio of financeable projects, not a slogan about volume.⁴

Iraq is not starting from zero in gas development. Basrah Gas processing has expanded; the Halfaya project entered service at 300 million standard cubic feet per day; and facilities opened including Fayhaa at 130 million standard cubic feet and NGL2 at 200 million standard cubic feet. GGIP includes 600 million standard cubic feet per day of processing capacity alongside 1000 megawatts of solar. New licensing rounds also target additional gas capacity. This is a promising portfolio, but success is measured by dry gas actually delivered to a specific power plant and its annual availability, not the processing plant’s nameplate capacity.⁵

In renewables, the gap between ambition and implementation is greater. The Ministry of Electricity’s plan announces a target of 12 thousand megawatts of solar by 2030, with contracts and memoranda for major projects including Total’s 1000-megawatt project. Yet IRENA’s 2025 data places installed photovoltaic capacity at only tens of megawatts, while most existing “renewable” capacity historically comes from hydropower. The challenge is therefore no longer proving the quality of Iraqi sunlight, but financing, land, connections, contracts, the grid, storage and timely delivery capacity.⁶

Diversifying external supply is also useful. In spring 2026, the Ministry of Electricity announced an interconnection plan providing 600 megawatts from Türkiye, 500 from the first phase of the Gulf interconnection and 150 from Jordan. The vision supports this path as a market for flexibility, reserves and trade, not a substitute for internal system reform. Imports covering a permanent shortfall remain fragile; interconnection enabling purchases, sales and reserves according to price and need becomes an energy-security asset.⁷

A floating LNG platform project at Khor Al Zubair also entered fuel-diversification plans, with announced capacity in the range of 500–750 million standard cubic feet per day. This is an important opportunity to reduce dependence on a single gas route, but it should be treated as a flexibility and reserve bridge: imported LNG may cost more and is exposed to markets, shipping and maritime corridors. Energy sovereignty is not absolute self-sufficiency; it is the ability to continue when a particular source fails.⁸

The chapter accordingly proposes a five-layer transition: first, honestly measure loads, losses and service; second, secure domestic fuel and reduce flaring; third, make existing generation a more available and efficient fleet, with combined cycle where viable; fourth, modernise transmission, distribution, meters and tariffs while protecting low-income households; and fifth, integrate solar, wind, storage and regional interconnection into disciplined operation rather than isolated projects.

2. From infrastructure to energy: why is electricity a backbone within the backbone?

The previous chapter ended with the idea that ports, railways and roads are productive assets only when they work every day. All these assets contain a hidden energy layer: port cranes, signalling systems, rail workshops, pumping stations, tunnels, refrigerated warehouses, factories, communications towers, hospitals and data centres. Infrastructure without reliable electricity needs backup generators, fuel stocks and extra maintenance, spreading the cost of weak electricity across every sector.

The chapter therefore does not treat electricity merely as a “household service”. It is an input to production, security and sovereignty. A factory needs stable voltage and frequency, not nominal supply hours; a water station needs continuity; a hospital needs two feeds and a UPS; a port needs peak capacity; and a digital network needs uninterrupted power. Success is therefore service quality by user type, not simply the national average of supply hours.

3. The central question and chapter boundaries

Central question: how can Iraq build an electricity and energy system between 2027 and 2045 that provides a 24/7 service at sustainable quality and cost, matches generation to fuel and networks, converts flared gas into value, expands renewables and flexibility, and reduces critical dependencies without a tariff shock for citizens or an inflated portfolio of inoperable investments?

3.1 What the chapter settles

• The meaning of stable electricity and its reliability and quality indicators.
• The relationship between generation, gas, fuel, flaring and imports.
• Generation, transmission, distribution, losses, meters and collection as one system.
• The path for renewables, storage and regional interconnection and their role in energy security.
• Tariffs, support and financial reform sequenced to protect households and prevent shocks.
• Transition phases, indicators and programmes through 2045.

3.2 What the chapter does not settle

• It does not redesign oil policy, oil exports or refining except insofar as they provide electricity fuel.
• It does not build a complete water policy; it treats water as a generation constraint and passes the subject to the next chapter.
• It does not choose a particular turbine, panel or battery supplier or turn the vision into a shopping list.
• It does not fix a single demand forecast through 2045; demand changes with efficiency, prices, population and industry and must be updated periodically.

4. Operational glossary and measurement rules

5. The 2024–2026 baseline: a service gap, not just a plant gap

The chapter uses a multi-year baseline because sector indicators are not all published for one year. The year 2024 provides achieved capacity and comparable losses; 2025 provides flaring, import and renewable data; 2026 reflects gas conditions, interconnection, summer plans and legislation. These values are not silently merged into a single series.

6. Stable electricity: from nameplate capacity to assured service

“24 hours” is not a sufficient standard. Electricity may be available but voltage low and fluctuations high, damaging motors or disrupting production lines. Supply hours may also be good in one neighbourhood and entirely different in another. The vision therefore adopts reliability and quality indicators: SAIDI, SAIFI, CAIDI and Energy Not Supplied, ENS, alongside grid frequency, major trip events, supply voltage and the share of critical loads with two independent feeds.

At present, these indicators lack a unified, published national baseline in the public domain that can be defended. The first 2027 target is therefore measurement, not an invented number. Every distribution company publishes a unified monthly dashboard at governorate and district levels, separating planned from unplanned outages.

Unit availability must also be measured, not merely capacity. A plant rated at 1000 megawatts but available for 60% of the year is less valuable than a smaller plant with high availability. Planned maintenance is incorporated into a national portfolio preventing critical units from being taken offline simultaneously before peak demand.

7. Demand and loads: supply cannot be built without demand management

Estimated peak demand of 60 gigawatts in 2026 reflects population growth, air conditioning, construction, unauthorised connections and new loads. Meeting every increase with new generation assets without efficiency creates an endless race, because heavily subsidised electricity encourages higher consumption and weakens incentives for efficient appliances and insulation.

In the vision, demand management is not “disguised scheduled rationing”. It means efficient buildings and air conditioners, time-of-use pricing for consumers able to respond, paid industrial demand response, future smart vehicle charging, and control of non-critical government loads at peak hours. These resources may cost less than a plant operating for only tens of critical hours each year.

7.1 Cooling as a national load

Iraq’s extremely hot summers make air conditioning a principal driver of peak demand. Minimum air-conditioner efficiency standards, thermal insulation, reflective roofs, shade and appropriate windows therefore become electricity policy as much as building policy. Every more efficient cooling unit reduces generation, transmission and distribution loads together.

The 2045 programme does not impose a rapid ban on existing appliances. It begins with clear efficiency labels, gradually prohibits imports of the least efficient appliances, provides replacement finance to high-consuming households with limited means, and enforces an actual energy code for new buildings.

8. The generation fleet: readiness and efficiency before additions

Iraq needs new capacity, but every generation project passes four gates before it is considered a solution: fuel secured by contract and pipeline; available transmission connection; clear life-cycle cost and financing; and a maintenance, spare-parts and skills plan. A project failing any of these may add “announced megawatts” without adding service megawatts.

Announcements and agreements with global companies in 2025–2026 discuss tens of thousands of new megawatts and expansions. The vision does not add every figure as though it were confirmed capacity. It classifies the portfolio into concept, memorandum, framework agreement, study, financial close, effective EPC, construction, testing and commercial operation. The public sees the figure in each category separately.

8.1 Improve existing assets before expansion

For simple-cycle gas units, conversion to combined cycle can increase electricity produced from the same fuel by recovering exhaust heat. Priority therefore goes to cases where heat, fuel and grid analysis demonstrates better value from conversion than from a separate plant. Improvements also include cooling and control systems, turbine maintenance, reduced auxiliary consumption and removal of transformer and line bottlenecks.

9. Fuel: gas is the central bottleneck

A large share of Iraqi generation depends on gas, making “fuel security” part of electricity planning, not a separate Ministry of Oil responsibility. In February 2026, the Ministry of Electricity announced that interrupted Iranian supplies had caused a loss of more than 5,500 megawatts of capacity. In July 2026, it said that a halt in gas from the Dana field could cause a loss of approximately 1,400 megawatts. The lesson is that a large system can lose gigawatts because of a single fuel node.⁹

The vision therefore establishes a Fuel-to-Wire balance: daily/monthly comparisons of dry gas supplied to each plant, its calorific value, unit efficiency, electricity sent out and losses. This reveals whether the bottleneck lies in fuel, the plant or the grid, preventing institutions from trading accusations.

10. Associated gas: from flare to fuel and value

The estimate of 24 bcm flared in 2025 represents a huge resource, but one dispersed geographically and technically. The recent World Bank report itself uses Iraq as an example of a country flaring far more gas than it imports. Turning this fact into policy, however, requires ranking sites by viability: source volume and continuity, pressure, composition and impurities, distance to a pipeline or plant, processing cost, field life and final buyer.¹⁰

The adopted objective is to end “routine flaring” by 2030, not claim an absolute absence of every flare. Safety and emergency flaring remain subject to standards and recording. Each field needs a Gas Utilization Plan before oil output rises, and increased oil production becomes conditional on associated-gas gathering and processing capacity wherever technically and economically feasible.

Flaring savings are not calculated from global gas prices alone. Iraq’s value is gas at a power-plant or industrial gate after gathering, processing and transport, less capital and operating costs. This prevents every small site from becoming an uneconomic project in the name of “zero flaring”.

11. Gas investment portfolio: large, small and connected to consumers

Iraq needs a mix of large, long-term projects and smaller, faster projects near flaring sources. GGIP creates a major platform to process 600 million standard cubic feet per day in two phases and connect it to the southern system; Basrah Gas projects expand existing utilisation; Halfaya, Fayhaa, Nahr Bin Omar and Nasiriyah add units of different sizes. The vision groups them into a “gas-to-demand portfolio”, not a list of inaugurations.

Every project has clear accountability for outcomes: commercial dry-gas volume, natural gas liquids/liquefied petroleum gas where appropriate, a delivery contract to a plant or industry, availability and an operating date. Success is not measured by a facility being “complete” if the volume does not reach the consumer.

12. Non-associated gas and the national gas network

Associated gas alone will not suffice if electricity and industrial demand grows. The chapter therefore supports development of non-associated gas fields such as Mansuriyah, Akkas and others on updated feasibility assessments, with a national gas network connecting production to demand and allowing volumes to move between south, centre and north where geography and cost justify it.

A gas network is not built by providing a pipeline for every plant. It needs main nodes, uniform compression, processing and metering, transportation contracts and daily forecasting. A limited wholesale gas market for power plants and major industries may develop in future when metering and contracts mature, with security, prices and sovereignty remaining under clear regulation.

The gas–oil relationship must prevent associated oil production rising faster than processing capacity. From 2027, every major production plan includes a parallel gas plan and facilities schedule, reported annually through a “barrel–gas–flaring–use” account.

13. Combined cycle and fuel efficiency

Generation efficiency is a “virtual gas field”. If a plant increases electricity output per unit of gas, the state obtains additional capacity without importing the same fuel quantity. All simple-cycle units eligible for Combined Cycle conversion are therefore reviewed through life-cycle cost analysis and assessment of water, heat and grid effects.

A Heat Rate and Sent-out Efficiency standard is also established for every plant and published in aggregate. High-fuel-consumption plants undergo improvement, rehabilitation or phased retirement if operation proves more expensive than the alternative. The system is not forced to run an inefficient unit merely because it is state-owned.

14. The transmission grid: the ability to move megawatts

More generation in the south or centre is of no use if the 400/132 kV network and substations cannot move it to load centres. Generation and transmission planning therefore use one model: every new plant identifies its connection point, stability study, short-circuit capacity, reactive compensation needs and outgoing lines before financial close.

The 2026 agreements to develop transmission and HVDC interconnection reflect the right direction: generation and transmission are planned together. But technology — AC or HVDC — is selected after studying distance, flow, stability and interconnection, not as a symbol of modernity. HVDC suits major corridors or connections between systems with particular characteristics; it is not a universal replacement for every line.

The grid also needs an N-1 standard for critical sections: losing one element must not cause widespread collapse, with automated protection and Phasor/SCADA disturbance recording where needed. Major trip-event reports are published without disclosing sensitive security details.

15. Distribution and losses: Iraq’s largest virtual power plant

With distribution losses at 55% in the IMF’s 2024 assessment, distribution becomes a generation project in its own right. A reduction of 10 points cannot be assumed to save 10 points of demand directly, because technical and commercial definitions differ. The direction is nevertheless clear: every kilowatt-hour measured, delivered and paid for reduces the need for additional generation and financing.

The plan begins by dividing the grid into Energy Accounting Zones, measuring at the substation, feeder, transformer and consumer. This reveals where the difference disappears. High technical-loss areas need wires, transformers and load balancing; high commercial-loss areas need meters, customer-account audits and lawful enforcement; informal-load areas need urban regularisation and service, not collective disconnection.

16. Meters, collection and tariffs: reform in sequence

Reform sequencing is politically and economically decisive: 1) reliable service and metering; 2) correction of customer records and unauthorised connections; 3) easy digital collection; 4) defined social protection; 5) gradual tariff adjustment. Raising prices before citizens know their actual consumption or receive stable service undermines legitimacy and increases evasion.

The smart meter is not an end in itself. It must measure consumption accurately, support remote reading, detect tampering and enable time-of-use tariffs where needed, with data protection and a billing appeal route. Published KPIs include the share of meters actually working, not merely “installed”, the share of genuinely read bills, collection and debt by sector.

Once collection improves, tariffs can gradually move towards service cost, as recommended by the IMF, while support shifts from a blanket discount to a “protection tariff” for the first consumption block of eligible households, with direct support where needed. Energy-intensive industry receives cost-reflective prices with interruptibility/flexible-demand contracts, not open-ended subsidies.

17. Protecting citizens: targeted support, not free electricity for everyone

Electricity is a basic service right, but “zero or near-zero prices” are not a sustainable right if they consume the budget, prevent maintenance and encourage waste. Proper protection starts with a subsidised basic consumption allowance for vulnerable households, followed by higher blocks closer to cost. Every subsidy appears as a budget item rather than disappearing inside Ministry of Electricity losses.

Responses to high bills must also be fair: rapid meter checks, consumption histories, appeal channels and debt rescheduling. The chapter prohibits disconnecting hospitals or vital services without a continuity plan, but also rejects broad “permanent exemptions” that turn some institutions into unmetered consumers.

18. Private neighbourhood generators: from permanent substitute to regulated backup

Private neighbourhood generators emerged as a rational response to grid failure. Abolishing them by decree before an alternative exists harms citizens and businesses. The vision establishes an exit path conditional on grid reliability: once an area reaches a 24/7 standard for a sustained period, its neighbourhood generator becomes registered backup, is integrated into a microgrid where viable, or is gradually retired.

During the transition, fuel, emissions, noise, safety and transparent metering/pricing standards apply. The state does not continue subsidising generator fuel in ways that encourage the substitute to remain after grid repair. In sensitive urban areas, backup can be consolidated into shared generators/batteries for a complex rather than thousands of small units.

19. Renewable energy: energy security, not merely an environmental file

IRENA describes Iraq as heavily dependent on fossil fuels — over 98% of its energy mix — while renewables account for less than 2% of primary supply. Solar irradiation also exceeds 2000 kWh/m²/year across extensive areas. Solar energy is therefore not “green decoration”: it is a domestic fuel needing neither a pipeline nor imports, with relatively high daytime output near the summer cooling peak.¹¹

Solar, however, is not a stand-alone substitute for a gas plant. Output varies, disappears at night, is affected by dust and heat, and requires a flexible grid, forecasting and storage or dispatchable resources. The vision therefore measures System Cost, not only project LCOE.

Globally, solar and wind remain among the cheapest sources of new capacity in 2025 according to IRENA, but actual Iraqi prices depend on financing, risks, land, connections and contracts. A global cost cannot be adopted as an Iraqi tariff without competitive procurement.

20. Utility-scale solar: from contracts to operation

The government target of 12 GW of solar by 2030 is a useful ambition if converted into an annual commissioning schedule. The vision divides it into competitive packages linked to grid zones and prevents thousands of megawatts from accumulating behind an unready transmission point. Every project needs settled land, a connection study, a bankable PPA, financial close, EPC, a cleaning plan, yield forecasting and a COD.

The 1000 MW Artawi/Ratawi project with TotalEnergies is an anchor example; its contract divides the project into 250 MW phases. What matters is not the name but the “phasing” mechanism: learning need not wait for all 1000 MW, and each phase is connected and tested before the next.¹²

Because Iraq has announced other large projects and memoranda potentially exceeding several gigawatts, a Renewable Pipeline register distinguishes announced, contracted, financed, under construction, synchronised and commercial stages. “Renewable capacity” is reported only from the commercial-operation category.

21. Distributed solar on rooftops and institutional premises

Large plants are not the only solution. Government, commercial and residential rooftops reduce local loads and distribution pressure, especially during daytime cooling. Unregulated expansion, however, may create voltage, reverse-flow and worker-safety problems. A distributed-generation Grid Code, bidirectional transformers where needed and Anti-Islanding protection therefore precede widespread deployment.

Open-ended cash support is replaced by a mix of low-cost loans for eligible households/businesses, incentives during the market’s early years and pooled procurement for government rooftops. Net Billing or an export tariff reflecting electricity’s value to the grid is used instead of a promise of permanently unfunded Net Metering.

Critical institutions — hospitals, water services, communications and civil defence — receive priority for solar + battery + grid/backup-generator systems, because the purpose is not merely a lower bill but continued service during grid outages.

22. Wind, waste and hydropower

The ministry’s plan, reported by IRENA, includes over 1 GW of wind and waste-to-energy projects. The vision guarantees no technology a share: resource maps and wind measurements over a sufficient period precede procurement. Wind may complement solar in time at certain sites, but land is not selected simply by average wind speed without studying the grid, environment, birds and local community.

Waste-to-Energy is treated first as waste policy: sorting, moisture, calorific value, emissions, ash and supply contracts. Without a stable waste chain, a plant may become an asset needing additional fuel. Hydropower remains part of flexibility but is constrained by water and drought; electricity security must not be built on unguaranteed flows.

23. Storage, flexibility and grid services

As solar expands, storage and flexibility gain value. Batteries are assessed not only in megawatts but in MWh, cycles, response speed, warranty, degradation and revenue source: shifting midday energy to evening, frequency control, reserves or deferring grid expansion. The same battery cannot sell all these services simultaneously without market rules.

Memoranda announced in 2025 included hundreds of megawatts of storage alongside solar projects. The vision requires each project to define its Storage Use Case first. It also examines pumped storage, thermal storage and industrial solutions where geography and economics support them, rather than assuming lithium is the only answer.

Flexibility also includes fast gas units, regional interconnection, demand response and coordinated maintenance. Reserves are therefore not defined as an “idle plant”, but as capacity that can be called upon within a specified time and has actually been tested.

24. Regional interconnection: a market and reserve, not a new dependency

Connections with Jordan, Türkiye and the Gulf gradually move Iraq out of an “electricity island”. In April 2026, the ministry announced a total of 1,250 MW: 600 from Türkiye, 500 from the Gulf and 150 from Jordan. The Gulf Cooperation Council Interconnection Authority describes the Iraq project as an approximately 295 km double-circuit 400 kV line from Al Wafrah in Kuwait to Faw, providing around 500 MW in the targeted phase.¹³

The greatest value of interconnection is not imported electricity alone. It permits shared reserves, seasonal exchanges, purchases when prices fall and future surplus exports. To benefit, Iraq needs rules for trade, metering, settlement, scheduling and reserves, and an internal grid able to receive electricity where it is needed.

New connections must not replace an old dependency with another. The 2045 standard is that no single import route constitutes a critical failure point; the maximum for each dependency is set through annual stress tests.

25. LNG and alternative fuels: a safety bridge, not a permanent model

After repeated volatility in gas supplies through Iran, Iraq turned to a floating LNG option at Khor Al Zubair. Ministry of Electricity statements in April 2026 placed capacity at 500–750 million standard cubic feet per day, with a specialist company contracted to provide the platform and gas. This broadens suppliers and creates a maritime option, an energy-security gain.¹⁴

LNG is not, however, necessarily cheaper than domestic gas. Its cost includes global gas prices, liquefaction, shipping, regasification and infrastructure. It is therefore used as a bridge while domestic gas projects mature and as a long-term reserve/balancing tool, with diversified contracts and without locking every volume into inflexible Take-or-Pay commitments.

Liquid fuel remains an emergency option for some units, but running gas-designed plants on heavier fuels can increase costs, maintenance and emissions and reduce capacity. A limited strategic operating stock is therefore maintained and tested; alternative fuel must not become the normal condition.

26. Energy security: diversifying points of failure

Energy security is built by analysing “common points of failure”: a single gas field, pipeline, LNG port, giant plant, transmission corridor, control centre or maintenance supplier. A secure system does not eliminate every dependency, but prevents any single one from being able to black out a wide area.

The vision adopts a flexibility matrix of six resources: domestic gas; imported gas/LNG; regional interconnection; distributed and utility-scale renewables; storage/demand response; and emergency fuel. The system operations centre determines each resource’s contribution under scenarios of gas interruption, heatwaves, dust storms, transmission-line loss, cyberattack and low water.

The Ministry of Electricity also publishes an annual Energy Security Statement explaining reserves, fuel, contracts and dependencies at a level that does not compromise operational security, showing what has changed since the previous year.

27. Operation, control and data

The 2045 grid cannot be managed by telephone and scattered spreadsheets. It needs modern EMS/SCADA, unified network maps, real-time generation, fuel and load data, and daily, weekly and seasonal forecasting. Advanced control centres included in the 2026 plans are an appropriate step, but value comes from data quality and operator authority, not screens.

The national control centre is differentiated from regional and distribution centres, with planned Black Start and restoration procedures and annual exercises. Door Six’s cybersecurity principles also apply directly to the grid: OT systems need segmentation, access management, controlled updates, configuration backups and monitoring that does not disrupt safety.

Every widespread outage produces a non-punitive After-Action Review identifying the sequence, root cause and corrective action. A public summary is released while sensitive details remain internal. The system’s aim is to learn from incidents, not conceal them.

28. Heat, climate and water: summer capacity is the real capacity

System capacity on a mild day is not Iraq’s standard. Heatwaves increase loads, reduce the efficiency of some turbines, transformers and lines, and raise plant cooling needs. Planning therefore uses Peak Summer Derated Capacity: capacity after accounting for design temperature, fuel and water, not the nameplate.

Water is an additional constraint. Some thermal plants require cooling, while water scarcity and higher temperatures may constrain operation. The next chapter details water security; here, every new plant must study Water Use, cooling alternatives, water cost and its position within the basin, favouring lower-water cooling where water has greater value.

Renewables themselves need climate resilience: dust and cleaning, panel temperature, flash floods, extreme winds, and suitable cables and transformers. “Sunlight is available” does not mean theoretical annual output is achieved without local O&M.

29. Law, institutions and the market

Ministry of Electricity Law No. 53 of 2017 is the ministry’s principal organisational framework, while the renewable energy regulation bill remained in the legislative process in October 2026: Parliament completed its first reading in August, and the Electricity and Energy Committee continued discussing it on 5 October 2026. The chapter therefore does not assume a new law is in force before publication in the Iraqi Official Gazette.¹⁵

The required institutional reform does not begin by creating a new body for every problem. The priority is separating functions: policymaking; system operation; generation; transmission; distribution/retail; economic and technical regulation; and oversight. When one body is seller, buyer, regulator and auditor, incentives become entangled.

In the medium term, Iraq needs a functionally independent electricity regulator, or a model offering equivalent independence, to establish the Grid Code, Distribution Code, quality and tariff standards, service-cost methodology and licensing for IPPs and renewables, with appealable decisions. The legal form is determined by institutional study, not imitation of another country.

30. Financing and project selection: avoid inflating the announcement portfolio

The electricity sector can absorb enormous investment, but can also create enormous fiscal commitments if PPAs or sovereign guarantees are signed without demand, fuel or a grid. Projects therefore pass an Integrated Resource Plan gate every two years, covering scenarios for demand, efficiency, fuel, renewables, storage, networks and interconnection, selecting the least-cost portfolio meeting the reliability standard.

A private project does not automatically transfer all risk to the investor. A Take-or-Pay contract can become hidden state debt, while a fuel guarantee can transfer oil risk to public finances. Every IPP/PPP contract undergoes Ministry of Finance Value for Money and fiscal-risk assessment, with contingent obligations disclosed in the fiscal risk statement.

The chapter also prohibits financing basic operating maintenance through long-term borrowing. Debt finances long-lived assets producing services and returns/benefits; routine maintenance is funded from sustainable operating revenue.

31. International comparisons: transfer the mechanism, not the country

The shared lesson is that countries did not start with the final objective. They built measurement, regulation, networks and contracts, then expanded competition and technologies. Iraq needs the same sequence, preserving the state’s role in security, equity and planning naturally monopolistic networks.

32. Iraq’s electricity and energy system in 2045

In 2045, citizens do not ask how many megawatts the ministry announced; they ask why electricity failed and when it will return, receiving an automated answer and a time. Factories sign quality and reliability contracts and can participate in demand response. Every kilowatt-hour entering distribution is measured and settled, every subsidy appears in the budget, and every plant has a heat rate, availability record and maintenance plan.

Electricity fuel comes primarily from efficiently developed domestic gas, with near-zero routine flaring and LNG/imports and alternative fuels serving as flexibility layers rather than core dependencies. Solar, wind, storage and regional interconnection form a portfolio, not separate slogans. Clean energy expands because it is economical and secure, not merely because it is “green”.

The grid operates through a modern system operator, with calculated reserve margins, control centres, load and renewable forecasts, N-1 standards and restoration tests. No area relies on one line or transformer for a critical asset. SAIDI/SAIFI, loss, collection and quality indicators are published.

33. Transformation phases, 2027–2045

34. Indicator dashboard and targets

The following targets are policy choices for Vision 2045, not automatic forecasts. Where no published national baseline exists, 2027 begins with measurement rather than filling the number with an estimate.

35. Implementation programme package

Programme 1 — National capacity and demand balance

A unified platform connecting nameplate, available and sent-out capacity, demand, loads, constraints and fuel, issuing summer and winter peak reports.

Programme 2 — National electricity reliability

Define SAIDI/SAIFI/ENS and voltage and frequency quality, publishing them by distribution company and governorate with audit.

Programme 3 — Financeable zero routine flaring

Classify flaring sites and build a Capture–Process–Transport–Offtake portfolio with purchase contracts and operating indicators.

Programme 4 — Gas to electricity

Daily/monthly contracts between oil and electricity bodies for dry gas, pressure and calorific value, linking measurement to electricity sent out.

Programme 5 — Generation fleet efficiency

Heat rates, combined-cycle conversions, maintenance, reduced auxiliary consumption and phased retirement of uneconomic units.

Programme 6 — Transmission Grid 2045

Joint planning with generation, renewables and interconnection; N-1; 400/132 kV substations; SCADA/EMS; HVDC projects only where viable.

Programme 7 — Energy accounting zones

Measurement from substations through feeders and transformers to consumers, identifying technical and commercial losses precisely.

Programme 8 — Metering, collection and protection

Remotely readable meters, understandable bills, appeals, digital payment and a protection tariff for eligible households.

Programme 9 — Private-generator transition

Temporary standards, followed by conversion to backup/microgrids or retirement when reliability is achieved.

Programme 10 — Accelerate competitive solar

Phased procurement, connection and financing gates, a COD register, and 12 GW projects treated as a delivery path rather than an announcement figure.

Programme 11 — Distributed solar for critical buildings

Hospitals, water services, communications, schools and institutions, with batteries as needed and connection and safety codes.

Programme 12 — Storage and grid services

BESS projects by use case, with markets/contracts for frequency services, reserves and deferred grid expansion.

Programme 13 — Regional interconnection and trade

Metering, settlement, scheduling, reserves and trade with the Gulf, Türkiye, Jordan and, in future, Saudi Arabia, with dependency tests.

Programme 14 — Fuel security

A portfolio of domestic gas + LNG + interconnection + limited liquid reserves + outage plans and annual exercises.

Programme 15 — Demand and cooling efficiency

Air-conditioner standards, insulation and an energy code, replacement finance, and industrial and government demand response.

Programme 16 — Regulatory reform

Grid Code, Distribution Code, tariff and service-cost methodology, IPP/RE licensing and an independent regulatory function.

36. Implementation, cost and financing matrix

The chapter does not set a total investment figure through 2045 because current generation plans themselves change, and the most important financial decision is to avoid buying capacity before securing fuel, networks and demand. Each project presents CAPEX, OPEX, fuel costs, carbon/water costs where relevant, reserve value and contractual obligations within a portfolio comparison.

37. Risks and safeguards

38. Conclusion and bridge to water and water security

This chapter establishes that electricity is not a contest to add megawatts. Iraq can sign agreements for tens of gigawatts, but the state obtains energy security only when fuel is domestic and diversified across routes, plants are efficient and available, grids are capable, losses are low, meters are reliable, tariffs are sustainable, and renewables and storage are integrated into system operation.

It also establishes that ending gas flaring is not merely a climate issue: it is electricity, balance-of-payments and industrial policy. Solar is not a competitor to gas; it reduces fuel consumption and diversifies supply, while flexible gas, storage and interconnection support renewables. The better system is a portfolio whose resources complement one another.