N. Z. MOSAKI

Candidate of Historical Sciences

Institute of Oriental Studies of the Russian Academy of Sciences

Federal Tax Service

Keywords: Iraq, Iraq (Southern Region) Kurdistan, electric power industry, power stations

Political successes of the Iraqi (Southern)State The Kurdistan region is largely dependent on the development of its energy sector, which has been characterized by steady growth in recent years, which strengthens the economic and political autonomy of the South Kurdistan administration from the central authorities in Baghdad.

Prior to the imposition of sanctions on Iraq after the occupation of Kuwait, the territory of the Kurdish Autonomous Region (QAR), created by the Iraqi authorities in 1974 and comprising the provinces of Dohuk, Erbil and Sulaymaniyah, was connected to the pan-Iraqi electricity grid, from which QAR received electricity.

In the territory of KAR, electricity generation was carried out at the Dukan and Derbendikhan hydroelectric power stations (Sulaymaniyah province). The nominal capacity of the Dukan HPP, built in 1975 on the Maly Zab River, is 400 MW, and the Derbendikhan HPP on the Sirvan River, which began operating in 1987, is 249 MW. However, their real power is significantly lower. From May to September, it is about 2.5 times less than the nominal value, and in winter it is 10 times less, which is due to the climatic conditions of the region, namely, different water levels in rivers.

In September 1992, the central Government imposed an embargo on the Kurdistan Region and cut off Erbil and Sulaymaniyah from the Iraqi national grid, and between August 1993 and August 1995, largely cut off Dohuk, formerly linked to Mosul. Thus, in the mid-1990s, Kurdistan was completely disconnected from the Iraqi energy system, after which the Kurdistan authorities were forced to build their own power system and built new power lines from the Dukan and Derbendikhan hydroelectric power stations, bypassing Kirkuk, which remained under the control of the central government.

Since the second half of the 1990s, the United Nations Development Program "Oil for Food" has played a significant role in the development of the Kurdistan region's electricity industry.

The Iraqi authorities did everything possible to obstruct the implementation of projects under this program (foreign specialists were refused an Iraqi visa, projects were rejected for "environmental reasons" , etc.). Nevertheless, in 1992 - 2002, 550 km long power lines were built in Iraqi Kurdistan, 4.4 thousand km were repaired.

Due to the difficult electricity situation, the Kurdistan authorities were even willing to finance the construction of a power plant in the territory controlled by the central government of Iraq, out of their 13% share in the revenues of the Oil-for-food Program. It was planned that the electric networks of Erbil will be connected again to the electric networks of Kirkuk and Mosul, and Sulaymaniyah-to Kirkuk. That is, the Kurds agreed to integrate into the Iraqi electricity system, while the Iraqi authorities "pushed" them out of the Iraqi electricity space in every possible way.

Despite the efforts of the Kurdistan authorities, before the overthrow of the Ba'athist regime, a significant part of South Kurdistan households (20-30% depending on the province) were still not connected to the electricity grid.

DEVELOPMENT OF THE INDUSTRY TODAY

The rapid construction of electricity facilities in post-Saddam Iraq has become particularly noticeable in Kurdistan.

The region's power grids were again included in the pan-Iraqi system. New transformers and transmission lines were installed to regulate the flow of electricity between different regions of the country. However, despite the increase in power generation, Kurdistan region experienced an acute shortage of electricity.

The combined needs of the Kurdistan Region at the beginning of August 2006 were estimated at about 1,200 MW, while the Derbendikhan and Dukan hydroelectric power plants could produce only 300 MW under favorable natural conditions. Electricity production in the region in 2006-2008 was 450-500 MW with a demand of 1.5 thousand tons. While the central government allocated only 150-200 MW.

Major investments in the Kurdistan region's electricity sector have been underway since 2007. Mass Global Holding Ltd. (MGH), headquartered in Amman, Jordan, is now playing a major role in the region's electricity generation market. In 2007, it started construction of a power plant 22 km south of Erbil. In Chamchamal (60 km from Sulaymaniyah), the first phase of construction of a gas-fired power plant with a capacity of 750 MW was completed in 2008, and later its capacity was increased to 1500 MW. Another 1,000 MW gas-fired power plant operates 35 km north of Dohuk. In 2016, it is planned to increase the capacity of this plant to 1500 MW. A fuel oil power plant with a capacity of 260 MW was built in the town of Tak-Tak in the Koisanjak district. In Kurdistan, there are also many small power plants in the cities of Chwarte, Kifri, Akra, Erbil (10 MW each), Chamchamal (24 MW), Koya (17 MW) (on diesel fuel), in Tasluja (on fuel oil, 51 MW).

Thus, the Dukan and Derbendikhan hydroelectric power stations, built in the XX century, ceased to play a decisive role in the electric power industry of Southern Kurdistan.

Despite some success, the region's energy supply situation was somewhat aggravated by the decision of the local government to supply electricity to the provinces of Kirkuk, Diyala (Khanekin), as well as the Kurdish-populated areas of Mosul, which are experiencing an acute shortage of electricity. This decision was a political one. The Kurdistan authorities considered themselves obligated to help Kirkuk, as they stated that this province should be included in the administrative borders of Kurdistan. Providing electricity was an important step to strengthen the position of the Kurdistan region among the local population, given that the question of ownership of these territories, according to article 140 of the Iraqi Constitution, must be decided on the basis of a referendum.

Having met the basic needs of the Kurdistan region's population for electricity, the local authorities began to announce ambitious plans for the construction of new capacities. In 2012, the Kurdistan Region's Electricity Ministry planned that in 2016, the capacity of power plants in Iraqi Kurdistan would reach 6 thousand tons. ¹ MW, and the region will be able to export electricity to other provinces of Iraq. However, already in 2014, due to the beginning of the active terrorist expansion of the Islamic State (IS) group, it was clear that this goal would not be achieved.

At the same time, the Kurdistan authorities are trying to implement some major projects, one of which is the construction of the Basian power plant in Sulaymaniyah with a capacity of 750 MW. The project is being implemented by the largest oil trader in Kurdistan, the Sulaimani firm Qaiwan Group, and the construction of the power plant is being carried out by the Turkish company ENKA.

In parallel with the construction of new facilities to cover the electricity shortage, the regional authorities are importing electricity from Iran and Turkey2. The electrical networks of Iran and Iraq were connected at the point Zohab (Iran, Kermanshah province, Iraqi Kurdistan) - Khanekin (now Khanekin is actually included in Kurdistan) through the Khosrowi border crossing, thanks to which Iraq received about 100 MW. In 2009, the Kermanshah - Diyala (about 400 MW) and Abadan - Basra (300 MW) power lines were connected. By the end of 2011, the export of electricity from Iran to Iraq increased to 1 thousand tons. ³ MW, including deliveries to Iraqi Kurdistan via power lines from Merivan (Kurdistan province, Iran).

At the end of 2010 Iran even planned to connect its electricity network to Syria via Iraq, ⁴ but the capture of a significant part of the territories of Iraq and Syria by the IS group made this project impossible. In fact, Iraqi Kurdistan has been receiving about 200 MW from Iran since 2009.

The northwestern part of Iraqi Kurdistan has been importing most of its electricity from Turkey since 2003. An agreement was signed between the Iraqi Ministry of Electricity and the Turkish company Kereteci for the import of 240 MW to Dohuk, but only 140 MW was supplied.⁵

The Kurdistan authorities attach particular importance to more efficient use of resources. Oil production in the Kurdistan region of Iraq burns a huge amount of associated gas, which could be used to generate electricity. In this regard, some of the power plants that previously consumed petroleum products, mainly imported from abroad, have been reconstructed to use gas. For example, in 2009, the power plants in Erbil and Chamchamal were switched to gas received via a 176 km long gas pipeline from the Khor Mor field. In 2014 The Dohuk power plant started receiving gas from the Sumail field.

In 2012, the Kurdistan Region Ministry of Electricity signed contracts with foreign companies for the construction and supply of switchgears and substations, as well as the construction of a hydroelectric power station in Dohuk (Deraluk district) and the creation of a water utility to supply water to Halabja.

Currently, a power plant is being built in Deraluk to supply electricity to the province of Sinjar, which was captured by IS in August 2014, but was liberated by the Kurdistan armed forces and effectively annexed to the Kurdistan Region at the end of 2015.

PROBLEMS AND SOLUTIONS

The Kurdistan region's success in building electricity capacity, especially compared to the rest of Iraq, is also due to a high level of security, while in other parts of Iraq, the energy sector is seriously damaged due to the activities of terrorist groups, as well as significantly less abuse and misuse of funds.

Significant funds are being invested in modernizing the power grid in Kurdistan, as some of the networks and substations are worn out. In this regard, there is a certain potential to reduce technical losses, which, according to our estimates, reach 15-20%. Approximately the same amount is accounted for by commercial losses (non-payments), because in Kurdistan there is a problem with paying for consumed electricity, which prevents the flow of investment in the industry.

So far, the supply of electricity is largely in the nature of social support. Thus, at the cost of 1 kW/h of 130 Iraqi dinars ($1 is about 1.1 thousand dinars), the population pays 5 times less at the tariff.

At the same time, the population often considers it possible not to pay for electricity consumption at all, and stopping the supply for non-payment can lead to social upheavals. Moreover, this factor is actively used by the opposition, which regularly announces the upcoming serious electricity crisis, which may be caused by a growing increase in demand for electricity and the inability of the authorities to meet this demand. Due to the lack of electricity supply, there have already been protests in some areas of Kurdistan.

The Kurdistan region experienced its first major power shortage in recent years in November 2014. Before that, the capital of Kurdistan was provided with electricity almost around the clock. In other cities, electricity was supplied approximately 20 hours a day. But since November 2014, due to the cold snap, the demand for electricity has increased to 4 thousand tons. MW and higher with only up to 3 thous. MW, and because of this, more large-scale power outages began.

The shortage of electricity was also exacerbated by the huge influx of refugees (about 2 million people) from other provinces of Iraq and from Syria. Some small businesses started working at night, while others (mainly restaurants) switched to liquefied natural gas, which in turn led to an increase in gas prices by more than 2.5 times. The Kurdistan region authorities allocated a significant amount of heating oil and liquefied natural gas for the operation of generating capacities.⁶ Fuel shortages are particularly sensitive in winter, and Kurdistan Region's power plants sometimes do not operate at full capacity.

Financial difficulties in the Kurdistan Region due to

With lower oil prices (and prices for refined petroleum products, including heating oil, did not decline in the same way) and reduced transfers from the Iraqi budget due to political disagreements, difficulties were created in purchasing fuel for power plants, which sometimes led to the loss of 1,500 MW due to downtime of some stations. There was some panic among the authorities. Natural Resources Minister Ashti Khaurami was appointed Interim Minister of Electricity, as it was his department that was blamed for the electricity crisis due to the inability to ensure fuel supplies to power plants.⁷ As a result, generators were once again widely used in the region, as they were in the 1990s.

Another problem that deepens the crisis is terrorist attacks on gas pipelines that deliver gas to power plants. Thus, at the end of January 2016, an explosion on the Khormol gas pipeline caused a reduction in capacity by 400 MW. The inability to provide fuel for the power plant, as well as the search for budget savings in the context of the financial crisis, forced the Kurdistan authorities to start discussions about joining the Ministry of Electricity to the Ministry of Natural Resources (in fact, the Ministry of Oil), or even transforming it into a corporation that would be under the control of the relevant regulator.

Opinions are also expressed on the need to privatize a number of generating capacities. It is expected that this will lead to an increase in the cost of electricity and, accordingly, an increase in social discontent of the population, which has become accustomed in recent years to state patronage and subsidies, excessive and uneconomical electricity consumption. The authorities have no choice but to increase the cost of electricity consumed, somewhat limiting the demand for ^it8.

Various options for raising prices are considered, including a similar one discussed in Russia, when a small, normalized amount of electricity per household (or per capita) will be sold at low prices, and additional costs will be paid at a higher tariff.

At the end of 2015, the Kurdistan region authorities began to impose power supply restrictions, although, in general, the situation in Kurdistan, where the population receives electricity most of the day, is significantly better than in the rest of Iraq.⁹ For comparison, electricity consumption per capita in Iraq is about 1.6 thousand kWh, in Iraqi Kurdistan-2.2 thousand kWh.

* * *

Over the past decade, a new farm with almost two dozen power plants and related infrastructure has been built in Iraqi Kurdistan, which significantly ensures its electricity independence from the central authorities in Baghdad and reinforces its position in the confrontation with the Iraqi authorities regarding territories outside the autonomy claimed by the Kurdistan administration (Kirkuk, etc.).

Thus, Kurdistan can be considered as one of the most attractive sites for foreign companies, including both Russian and foreign investment. However, the penetration of Russian companies into the Kurdistan region is seriously hindered by Turkish contractors and Western equipment manufacturers.

¹ Kurdistan: from power cuts to energy exports, September 19, 2013 - http://www.the-report.net/iraq/kurdistan-region-sep2013/689-electricity-kurdistan-from-powe r-cuts-to-energy-exports

^{Ashinyants S. A.} 2 Iraq: economy and energy // Energy management abroad. 2014. N 2. С. 2 - 22. (Ashinyants S.A. Irak: ekonomika i energetika // Energokhozyaistvo za rubezhom. 2014. N 2) (in Russian)

³ Iraq receives $ 1k from Iran. МВт электроэнергии, 06.12.2011 - http://www.iran.ru/news/economics/77008/Irakpoluchaet_iz_Irana_1_tys_MVt_elektroenergii

⁴ Iran's electricity network to be connected to Syria via Iraq, 29.11.2010 - http://www.iran.ru/news/economics/70119/Elektroenergeticheskaya_set_Irana_budet_soedine na_s Siriey_cherez_Irak

⁵ Tirkiye 100 Megawatte Elektnka Dihok'e Nade (Turkey does not provide 100 MW to Dohuk), 15.06.2015 -www.rudaw.net

^{al-Jaff N.} 6 Power cuts and power plays in Kurdish Iraq, December 17, 2014 - http://www.alaraby.co.uk/english/features/2014/12/17/power-cuts-and-power-plays-in-kurdis h-iraq

^{Dolamari M.} 7 KRG Electricity Minister resigns, January 04, 2015 - www.rudaw; Iraqi Kurdistan oil minister Ashti Hawrami named interim head of electricity ministry, January 18, 2016 - www.ekurd.com

^{Watt J.} 8 Is There Really an Electricity Shortage? // The Kurdish Globe, 30.11.2015. N 516. P. 6.

^{Al-Khatteeb L., Istepanian H.} 9 Turn a light on: electricity sector reform in Iraq. Brookings Doha Center. 2015. P. 1.

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