Market Trends of Iraq Power EPC Industry
Thermal to Dominate the Market
- Iraq, with its vast reserves of hydrocarbons, is highly dependent on thermal energy for power generation. During the forecast period, with upcoming projects, thermal energy is expected to dominate the power EPC market.
- In December 2022, Mitsubishi Heavy Industries (MHI) subsidiary Mitsubishi Power completed the restoration of Unit 1 at the Hartha Thermal Power Plant in Basra, Iraq. The project involves restoring Unit 1's gas- and oil-fired steam turbine equipment to its original 200-megawatt output (MW).
- As the electricity transportation and distribution facilities in Nineveh have been badly damaged in the war, the government has managed to maintain and repair some of them, and there are plans to rebuild others.
- Additionally, in July 2022, according to the electricity minister of the country, Iraq is planning to build a new thermal energy plant in the Northern Nineveh Governorate within a program to reconstruct war-damaged facilities.
- According to the BP statistical review for 2022, the total electricity generation in Iraq accounted for 112.5 TWh in the year 2021. The annual growth rate of electricity generation was 6.6% as compared to the previous year.
- Thus, with the increasing demand for electricity and upcoming thermal power projects as well as the maintenance of older thermal plants, the generation is expected to grow, which, in turn, will support the Iraq EPC market for thermal power.
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Increasing Renewable Energy Installations is Expected to Drive the Market
- For the growth of solar, Iraq is taking a free-market approach by allowing investors to bid different prices, with the least expensive ones being awarded the projects on a build-own-operate (BOO) and IPP (Independent Power Producer) basis. With this, new projects are expected during the forecast period.
- In May 2022, according to the Ministerial Energy Council of Iraq, the country was awarded a contract to build 2,500 MW of solar power projects by foreign companies. With the installation of these solar projects, Iraq will be able to achieve its target of producing 12,000 MW of renewable energy by 2030, which will create demand for the Iraq EPC market in the future.
- Additionally, in April 2022, the central bank of Iraq approved USD 680 million in funds for renewable energy projects in the country. With this investment, the government plans for clean sources of energy that will support the environment and tackle power shortages.
- According to the International Renewable Energy Agency, Iraq's total renewable energy installed capacity accounted for 1599 MW in 2022. With the government's target towards clean energy and supportive investments for renewable projects, renewable capacity is expected to increase in the future, which will support the EPC market in the forecast period.
- Despite a stagnant market for renewable energy with an installed capacity of 1599 MW in 2022, Iraq has a huge potential for solar energy. With upcoming projects and ambitious goals, the renewable sector is likely to have significant opportunities to drive the EPC market.
