Robert Tollast: Recently there have been reports of 24 hour electricity in many parts of Iraq, particularly in the south, for example Nasiriyah was reporting 24 hrs in April. This is a tenuous situation though--when I spoke to an engineer in the province he remarked how some planned projects (including an 1800 MW plant) were long delayed and current plants were unable to operate at full capacity. A previous problem with electrical supply in Iraq was a huge rise in consumer demand, for example air conditioning unit sales and satellite tv sales rose rapidly, negating rises in electricity production. This will not change soon. What challenges do you see as we hit the summer months?
Harry Istepanian: Since 2003, the largest consumer of electricity in Iraq has been the domestic sector. The consumption pattern will most likely follow the same historic pattern of previous years during next summer months (July– September). The peak demand for electricity in 2013 was about 17,500MW, and is expected to reach above 18,000MW during the next peak summer days. The current production is still hovering around 12,000MW despite many new generating units that have been introduced recently. The shortage or interruptions in supply of the feedstock, mainly natural gas to the 40% of the generation capacity will remain the main challenge. MoE’s current need for natural gas is around 3 bscf/d to run its current thermal and gas turbine units at full capacity, while MoO’s gas production does not exceed 25 bscf/y. So, there is a significant gap between the supply and demand in the feedstock. This gap will widen if commercial and technical issues between the two ministries (oil and electricity) are not resolved.
RT: Some of the biggest multinationals have signed contracts with and sold equipment to the MoE, such as Siemens and GE. Those were mainly service and maintenance contracts (in the case of Siemens) and selling gas turbines (in the case of GE). But we generally do not hear of contracts for big companies to work with the MoE to build new power stations--perhaps because of what you have described as "a lingering command economy" in Iraq. This is something other analysts have spoken about in various sectors--what does it mean in the case of electricity production?