Power for the people: an analysis of Iraq’s energy infrastructure issues

By Owen Armentrout

September 28, 2025

Transmission towers in Baghdad, Iraq. Source: Haitham Moussa

Iraq has struggled to maintain a sufficient power grid for decades. Iraqi infrastructure was damaged during the Gulf War, wiping out 75% of the electricity supply according to Science Direct; and then once again, production faltered after Saddam Hussein was ousted in the wake of the US-led invasion of 2003. 

Make no mistake, in the decades leading up to the present situation, Iraq forged ahead and made numerous improvements to their infrastructure, but circumstances must be put into perspective.  

Prior to the war, Iraq’s energy production was strained by sanctions and conflict, but still managed to nearly match demand. However, at that time demand only equated to between 3,000 and 6,500 megawatts, while production hovered around 4,400 megawatts, according to the Washington Post.  

Managing Demand 

Over the course of the summer, as temperatures swelled to a scorching 122 degrees Fahrenheit, Iraq’s electricity consumption peaked at about 55,000 megawatts, with the Deputy Minister of Electricity Adel Karim stating that the country is currently only generating up to 28,000 megawatts; 8,000 of which are produced by natural gas imported from Iran, according to Al Jazeera.  

In August, Iraq suffered a nationwide power outage for about a day, with subsequently shorter blackouts taking place almost daily, according to CNBC.  

While Iraq is currently the second largest producer of oil in OPEC, and houses the fifth largest oil reserves globally, the nation still relies on imports of gas from Iran. Overall, between one-third to 40% of Iraq's gas and power supply is maintained by these imports according to Reuters.  

Back in March of 2024, Reuters reported the two nations had signed a five-year deal which would supply Iraq with up to 50 million cubic meters of gas per day.  

However, exports never reached this ceiling, instead lingering around an average of 25 million cubic meters (the same rate dispersed prior to the deal); which by late November of 2024, had decreased to a measly 7 million cubic meters, according to S&P Global.  

Iran had diverted the gas for domestic use, coming to this conclusion on behalf of diminished reserves which had led to widespread blackouts; compounded by a higher demand for heating, according to the Minimum Energy Efficiency Standards. 

Continuing this spiral, earlier this year between April and August, Iranian gas exports to Iraq dipped by nearly 40%, according to ZAWYA. 

While Iraq does harbor massive gas reserves of its own, much of it is lost in oil production due to gas flares, according to CNBC. 

Furthermore, due to deteriorated infrastructure and energy theft, over 40% of electricity generated by Iraq's power plants is lost during transmission. This is on top of the fact that these facilities only have the ability to operate at 60% capacity on behalf of overheating, water shortages and inadequate fuel mixes, according to the Baker Institute.  

Adding insult to injury, last March the United States announced that it would terminate a waiver on sanctions which had previously allowed Iraq to purchase Iranian electricity; effectively jeopardizing around 3% of Iraq’s power supply, according to CNBC. 

This decision was made in an effort to fortify U.S. pressures on Tehran in the wake of nuclear negotiations, according to Al-Jazeera.

Much of the same can be said for recent developments. 

On September 19th, the United States shot down a proposed trade deal between Iraq and Turkmenistan. The agreement would have allowed Iraq to diversify its gas supply by importing 5 billion cubic meters of gas from Turkmenistan; however, the fuel would have to be routed through Iran and see the process facilitated by the state-owned National Iranian Gas Company. Through this deal, Iran would have been granted 23% of the daily volume passing through its borders. Therefore, the United States saw fit to scuttle the arrangement as nuclear talks with Iran continue, according to Reuters.  

Although, Iraq is still seeking out ways to expand their mediums of energy.  

Improving Infrastructure 

According to Al-Jazeera, Iraq is presently constructing, seeking approval or negotiating for a series of industrial scale solar power plants which combined will generate up to 12.5 gigawatts, potentially supplying 20% of the nation's demand.  

The first of which, housed Karbala, is expected to produce up to 300 megawatts. Another plant being erected in Babil province is set to produce 225 megawatts; and soon to break ground, a site in the Basra province is projected to garner a gigawatt.  

In addition, according to Reuters, the French oil conglomerate TotalEnergies, in conjunction with several other corporations, has enacted the second phase of development at the Ratawi oilfield.  

ENKA, a Turkish construction company, has been commissioned to build the oil and gas processing complex which is expected to foster a daily output of 210,000 barrels of oil as well as 163 million standard cubic feet of gas.  

Hyundai Engineering and Construction is slated to complete a seawater treatment facility that will allow Iraq to stray from using freshwater for the processing.  

And lastly, the Chinese firm Petroleum Engineering and Construction Corp will build a separate gas processing plant which will produce up to 600 million standard cubic feet per day.  

The entirety of this multi-faceted project will cost the French oil giant $27 billion.  

While certain deals which would’ve alleviated dependency and demand may have faltered due to political pressure, Iraq remains dedicated to improving its infrastructure in an attempt to satisfy the people’s needs.