IRAQ: RENEWABLE POWER POTENTIAL IRAQ ENERGY FORUM

Size: px

Start display at page:

Download "IRAQ: RENEWABLE POWER POTENTIAL IRAQ ENERGY FORUM"

Damian Young
5 years ago
Views:

1 IRAQ: RENEWABLE POWER POTENTIAL IRAQ ENERGY FORUM MARCH 2018

2 REGIONAL RENEWABLES OUTLOOK MARCH 2018

3 RENEWABLE ENERGY GAINING GROUND IN THE MIDDLE EAST Cost of solar and wind declining Now competitive in the right locations & with right market design Lenders bullish on renewables Renewable projects bankable for both regional and international banks Changing and evolving business models Distributed generation and advanced grid technologies Nuclear power generation offers largescale, dispatchable, low-c power Growing regional interest but challenges on delivery Search for alternatives to gas Captured CO 2 for EOR; solar thermal steam Utility (power and water) projects most likely to go ahead as demand grows Need to meet demand in most costeffective way given strained budgets 3

4 SOLAR PV ATTRACTIVE VS TRADITIONAL GENERATION TRANSMISSION & DISTRIBUTION SOLAR PV GAS CCGT, $1/MMBTU CONVENTIONAL COAL GAS CCS, $6/MMBTU COAL CCS SOLAR ROOFTOP SOLAR CSP GAS CCGT, $6/MMBTU ONSHORE WIND NUCLEAR DIESEL TURBINE, $50/BBL GAS CCGT, $12/MMBTU LOW CASE Solar and wind now competitive against gas, and particularly against oil Alternative energy sources solar, nuclear and coal (without CCS) are being pursued actively by several Gulf countries ELECTRICITY PRICE (C/KWH) Source: Qamar research 4

5 DRAMATIC FALLS IN SOLAR PV POWER BIDS 8 7 Dubai Dubai Abu Dhabi KSA 1 0 6/10/ /27/2014 7/15/2015 1/31/2016 8/18/2016 3/6/2017 9/22/2017 4/10/2018 Source: Qamar research 5

6 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Generation (MW) 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Generation (MW) LCOE NOT ENOUGH Need to evaluate Solar PV as one component of Supply Example of a typical Middle East electricity market No need for high-cost gas/imports February / March Low-cost gas Solar PV Low-cost gas baseload, solar midday, high-cost gas / oil / imports for evening Solar PV August High-cost gas / oil / imports Low-cost gas or other baseload Source: Qamar research 6

7 MIDDLE EAST REGION REVISING SUSTAINABLE ENERGY PLANS Iraq lagging behind regional peers; however it has similar solar potential Source: INES; Qamar Energy 7

8 MAIN MENA COUNTRIES MAKING BIG PLANS FOR RENEWABLES TO MEET FAST-GROWING DEMAND Generation capacity (MW) Generation capacity (MW) 25,000 Planned solar PV 1190 MW 100,000 90, MW 20,000 80,000 15,000 10, MW 200 MW 1017 MW 70,000 60,000 50,000 40,000 30, MW 240 MW 5,000 20,000 10, Natural gas/oil Nuclear Coal Solar PV Solar CSP Wind Hydro Bio/waste Average demand Source: Utilities; media reports; Qamar projections Iraq 2021: Assumes 4 of the 6 solar projects come online and 50% of the under construction CGGT and gas turbine projects; Demand growth at 7% annual rate 8

9 SOLAR MARKET ATTRACTIVENESS ACROSS SELECTED MENA COUNTRIES Scale of tender driven market Green Scale of PV Scale of CSP financing demand demand tools Retail electricity rates / subsidies Nondomestic company ease of entry Nearmarket term potential (2020) Long-term market potential (2030) Market attractiveness rating Solar capacity 2017 (MW) Saudi Arabia Morocco Abu Dhabi Dubai Egypt Jordan Algeria Oman Kuwait Iraq Qatar Source: GTM Research; MESIA; Qamar Energy 9

10 IRAQ CURRENT ELECTRICITY SITUATION

11 FEDERAL IRAQ ENERGY SYSTEM Generation capacity Power supply availability is about 14 hours/day from the public network; reliance on private diesel generators 57% installed generation capacity is gas turbines; steam 28%; diesel 8%; hydro 7% Total federal design capacity 28,680 MW in 2017, but available capacity is 24,020 MW (including 2 GW of imports and barges) Loss of generating power in Baiji, Mosul, hydro plants during war against ISIS 7% average annual growth of electricity demand Gas supply Total 2017 gas production 29.8 BCM in % flared 45% marketed 1% reinjected The current programme of power plant expansion will require another ~1.5 Bcfd of gas (15 BCM) Running this would therefore require more gas imports (currently at 9.1 BCM) and/or capturing and using nearly all of the 2017 total of flared gas Otherwise, plants will have to run on expensive diesel Other power generation Hydro main source of renewables available 2017 capacity 40 MW from installed capacity of 1,840 MW after damages and old infrastructure Some use of solar power used for traffic lights & some off-grid solar power around 0.1 GW Four solar PV projects planned in Anbar province (240 MW) and one in Babylon (225 MW) However, subsidised electricity prices, cheap oil and a lack of policy have kept renewables out of the energy mix 11

12 Fuel input to electricity (KBOE) Gas share GAS INPUT TO POWER RISING Crude oil burning marginally reduced by new gas (imports and higher production) and fuel oil as refineries are being repaired Share of gas increased to 21% from 16% in ,000 35% 200, , ,000 50, Oil Gas Hydro Imports Share of gas in power 30% 25% 20% 15% 10% 5% 0% Source: MEES; IEA; Qamar Energy 12

13 GW SIGNIFICANT UPGRADES NECESSARY TO SUPPLY ADDITIONAL POWER Peak demand exceeds peak load by almost 50% in summer periods 2017 available capacity (24 GW) as % peak demand was 98% up from 56% in 2016 Total planned (1.46 GW) and under construction plants (10.21 GW) can GW to total available capacity Contract for electricity imports from Iran renewed in 2018 (~ MW) despite some payment delays from Iraq and Iran s higher domestic demand Signed MoU with Kuwait to import electricity (200 MW) Available capacity 2016 Available capacity 2017 Gas turbine Steam turbine Diesel Hydro Imports Peak demand Source: MEES; Dr. Jafar D. Jafar Uruk Engineering & Contracting Company (LLC), April

14 IRAQ RICH IN RENEWABLE POTENTIAL Total solar radiation (PV) Direct solar radiation (CSP) Possibility of PV power with storage Advantage of CSP is its thermal storage Wind speeds Source: IRENA; Status and future prospects of renewable energy in Iraq, Hussein A. Kazem, Miqdam T. Chaichan; Vaisala 14

EXISTING TRANSMISSION NETWORK Low connectivity in the west No transmission and distribution costs for distributed solar PV Planned solar sites: 1. Anbar 100 MW 2. Fallujah 40 MW 3.

15 EXISTING TRANSMISSION NETWORK Low connectivity in the west No transmission and distribution costs for distributed solar PV Planned solar sites: 1. Anbar 100 MW 2. Fallujah 40 MW 3. Amriya Al Samoud 50 MW 4. Karma 50 MW 5. Babylon 225 MW Solar power suitable for remote locations 15 Source: Ministry of Electricity; : Y. Al-Douri; Fayadh M. Abed; Journal of Renewable and Sustainable Energy 2016, 8, DOI: /

16 ENERGY STORAGE / COOLING CSP PLANTS VIA DAMS/RIVERS Low water resources will deter new investments in hydro plants in Federal Iraq Source: UN 16

17 IRAQ FUTURE POTENTIAL MARCH 2018

18 GW Notes: 2017 based on available capacity; UC = Under Construction; UC 2030 assumes all projects UC come online by 2030; UC + planned solar assumes all projects UC come online by planned solar projects; INES scenario assumes UC projects + INES targets for solar of 1.3 GW and wind power of 450 MW by 2030; rehabilitation of hydro assumed in last 4 cases; All 2030 cases assumes +200 MW of imports from Kuwait; UC projects and planned solar projects in Appendix DIFFERENT GENERATION MIXES available UC 2030 UC + planned solar hydro Solar/wind INES target hydro GreenCase 2030 High demand case Gas Steam Hydro Diesel Solar PV Wind Imports Demand base case (MoE estimate) Demand (Istepanian & Al Khateeb) Demand (Istepanian)

19 OPPORTUNITIES AND CHALLENGES FOR IRAQ RENEWABLE POWER CONCLUSIONS Opportunities Solar, wind power for serving remote communities, water-pumping & oil-field/industrial sites avoids security risk to transmission Solar water heating to reduce grid load, save winter LPG/kerosene Lower CO 2 emissions; solar/battery or solar/diesel hybrid reducing diesel use, noise and pollution Micro-financing methods for small-scale solar Financing, tenders for large-scale solar/wind installations learnings from Dubai, Abu Dhabi, Saudi, Jordan, Egypt Geothermal energy - Average temperatures of 100ºC at 5,000 m depth indicate low potential but could still be utilised for space/water heating Waste management: 31,000 tons of solid waste daily compared to 8,200 in Dubai which has plans for a 185 MW WtE plant Hydro-dams for pumped storage (advantage over most other Arab countries) Challenges Financing; customer acquisition; security Technological capability and organisation Grid extension/reinforcement Customer acquisition; security; consumer subsidies Scale and speed; dust storms; match to demand patterns Collection and treatment; expensive power unless waste disposal pays Reduced and irregular water flow; relations with KRG 19

20 CONCLUSIONS CONCLUSIONS Even with subsidy reform and efficiency initiatives, meeting demand growth and replacing oil in power remains a major challenge Domestic gas production will contribute but unlikely to be sufficient Gas imports likely to continue in the long-term Progress on distributed renewables, energy efficiency and subsidy reform today will lead to major savings in future Solar and wind are commercially and technically viable components of future generation mix Large-scale renewables require attractive investment conditions, payment guarantees, and realistic view on achievable bid prices 20

Dubai Tel +971 4 364 1232 Fax +971 4 420 3391 www.

21 CONTACT DETAILS ROBIN MILLS CEO Qamar Energy HDS Business Centre Cluster M, Jumeirah Lakes Towers Dubai Tel Fax

22 APPENDIX MARCH 2018

23 IRAQ S SOLAR POTENTIAL COMPARED GLOBALLY REGIONAL SOLAR PV ANNUAL CAPACITY ADDITIONS (GW) Source: Vaisala; IEA 23

24 UNDER CONSTRUCTION AND PLANNED POWER PROJECTS CONCLUSIONS Plant name Type Capacity (GW) Planned projects Yusfiya Steam turbine 1.4 Anbar Solar PV 0.1 Fallujah Solar PV 0.04 Amriya Al Samoud Solar PV 0.05 Karma Solar PV 0.05 Babylon Solar PV Under construction Rumaila CCGT 3 Bismaya CCGT 3 Anbar CCGT 1.64 Maysan CCGT 0.75 Nasiriya CCGT 0.75 Samawa CCGT 0.75 Dibis Gas turbine 0.32 Source: MEES V60N49; Qamar Energy 24

RISE OF GCC ALTERNATIVE ENERGIES TABLE OF CONTENTS GCC RESPONSE TO LOWER OIL PRICES CONCLUSIONS

GCC RENEWABLE ENERGY LANDSCAPE AND INTEGRATION CHALLENGES 1 RISE OF GCC ALTERNATIVE ENERGIES GCC RESPONSE TO LOWER OIL PRICES CONCLUSIONS 3 14 29 TABLE OF CONTENTS 2 RISE OF GCC ALTERNATIVE ENERGIES 3