Power generation in Iraq (page 2 of 2)

In its report for the implementation of the coming phase, Bechtel recommends the full rehabilitation of the stations that will deliver the greatest immediate increase in output.

This includes work to restore the giant 1,320MW Baiji plant, beginning with returning the plant's fifth unit to full operability. In addition, Bechtel recommends installing smaller generation units of up to 5MW for specific needs at Umm Qasr port and Baghdad International Airport and 50MW units to support domestic supply in Baghdad.

But lack of security has been a recurring problem in all the sectors and the electricity sector is no exception. The Korean Company OMO, which was working on electrical infrastructure in the north pulled out its 60 employee engineers after two of its engineers were shot in an ambush.

Due to the efforts of all parties taking part in rebuilding the Iraqi electricity system, power output exceeded pre-war levels for the first time during the month of October. Output reached a peak load of 4,518MW on October 6, compared with barely 3,200MW in September.

The achievement marks the first milestone in the plan to restore Iraq's ramshackle generation, transmission and distribution infrastructure. Since October 1, USAID claims that Baghdad in specific has received an average of 1,241MW a day.

USAID has now set the ambitious plan to increase power output to 6,000MW by May 2004 while the Ministry of Electricity also hopes to increase total production to 7000MW by June 2004 to provide for a five hours on and one hour off rationed schedule in the summer. This is in comparison to the current three hours on, three hours off being implemented throughout the country.

Despite these impressive achievements, plants are still working at much less than 50% of capacity. The country's eight large-scale thermal plants account for most of the installed capacity, which at full output could produce 5,415 MW of power. Gas turbines account for 2,181MW and hydro stations for a further 2,518MW of nameplate capacity.

The World Bank, after conducting an in depth analysis on the needs of the electricity sector set up a budget for funding needed in the coming three years. The budget estimates the net financial requirement for the electricity sector in 2004 at US$2,501.6mn of which $US997mn will be financed by the Oil for Food Program.

According to the World Bank, the preliminary 2004 recurrent budget provides USD119.2mn, for the sector, which is 40% more than the budget for 2003. The background data and assumptions of the budget prepared by CoE include several elements that might require further adjustment such as fuel price, cost of imported materials and the budget of the three northern Governorates.

Fuel costs, salaries and other services were estimated at prevailing prices. Any change in such prices will have an impact on the budget. The recurrent budget for 2004 would not be sufficient for financing normal maintenance required and these have been included in the investment budget.

The estimated costs for major overhauls and rehabilitation expenditures for 2004 are also included in the investment budget. For subsequent years the recurrent budget will need to be substantially increased to allow for proper maintenance of assets.