A few days ago, POWERCHINA and the Iraqi Ministry of Electricity signed a cooperation framework agreement for a 2GW solar power generation project, and Maha Hamoudi Abdul-Jabbar, the Director of the Investment and Contracts Department of the Iraqi Ministry of Electricity, signed a contract with a representative of POWERCHINA. According to the Iraqi government, according to the agreement between the two parties, the first phase will develop a 750MW solar power generation project. The specific construction date and location have not yet been clarified.

In February 2021, the Iraqi government issued a message, inviting international investors to participate in the development and construction of seven solar power stations (with a total installed capacity of 750MW), including Kalba, which is planned to be developed and constructed in Karbala, the holy city of Islam. Pull 300MW solar power generation project in order to deeply tap the potential of Iraq’s renewable energy and alleviate the country’s power shortage. The first phase of the 750MW project of this cooperation may be related to this.

In the field of Iraq’s electric power engineering, which has a profound impact on international politics and geopolitics, there are international giants such as Siemens and GE that are near monopoly, and there are strong competitions from regional rookies such as Olascom and Masdar. The first large-scale project cooperation of a Chinese company in the field of new energy in Iraq is of great significance. For China Power Construction, this is the inevitable result of its long-term deep cultivation of the Iraqi engineering market, especially the power engineering market.

The inevitable of China Power Construction

The layout and development of POWERCHINA in the Iraqi market can be traced back to the 1980s. Companies such as the China Water Seventh Bureau and the Hydropower Infrastructure Bureau under Power China began to engage in engineering contracting business in Iraq, and successively undertook a series of projects such as the Baghdad Highway and Bridge Project, the Mosul Water Conservancy Project and the Farmland Irrigation Project, and the Iraqi Basra Pile Foundation Project. . In spite of the raging war and the mission of cooperation, the early cooperation has laid a solid foundation for China Power Construction to have a deep understanding of the Iraqi market.

Since 2007, POWERCHINA Hubei Engineering Company has undertaken the construction of Iraq's largest Huashide 4×330MW + 2×610MW oil and gas power station project, and started operation and maintenance for a period of 10 years from 2014.

Since 2013, Shandong Power Construction No. 3, a subsidiary of PowerChina, has participated in the Sarahaddin 2×630MW oil and gas power station project of the Iraqi Ministry of Electricity. In May 2021, the project was successfully connected to the grid.

Salah Ding Oil and Gas Power Station

In 2018, PowerChina won the bid for the 730MW combined cycle power plant project in Rumaila, Iraq, which was implemented by subsidiaries of PowerChina Nuclear Power Corporation, PowerChina Hubei Engineering Company and other subsidiaries. At the beginning of August 2021, Unit 1 of the project successfully completed the 72-hour reliability test operation.

In view of the important cooperative relationship between China and Iran and the long-term participation of Chinese companies in Iraq’s power sector, in January 2021, the Iraqi Minister of Electricity met with the Chinese ambassador to Iraq Zhang Tao and expressed the hope to learn about the Chinese power companies implementing projects in Iraq. Discuss cooperation opportunities with more Chinese companies in the fields of traditional power and new energy. As one of the Chinese-funded enterprises engaged in the construction of electric power projects in Iraq for a long time, PowerChina is on the list of companies recommended by the Chinese government to the Iraqi Ministry of Electricity.

Opportunities and challenges coexist

War destruction, development dilemma, climate issues, world trends... Iraq is embarking on the road of transition from traditional energy to new energy amidst new and old problems. The power market has huge development potentials and opportunities:

The first is the urgent demand for electricity. After a long period of war and destruction, Iraq’s power shortage is serious and its development needs are urgent. It has become an opportunity market for international power engineering contractors.

The second is the friendly relations between China and Iran. Iraq and China upgraded to a strategic partnership in 2015. They are also countries that signed the Belt and Road cooperation agreement earlier, and are one of the key country markets for China's Belt and Road cooperation.

The third is rich oil resources. Iraq’s abundant oil resources can, under certain conditions, provide a relatively sufficient financial guarantee for the construction of electric power infrastructure and the development of new energy sources.

These factors have become the attraction for international engineering companies, especially Chinese international engineering companies, to enter the Iraqi power market. But at the same time, working in the power engineering industry (new energy) in Iraq is facing multiple challenges.

One is the security issue. Terrorism remains one of the biggest factors threatening Iraq’s national security, stability and development.

The second is market monopoly and competition. From the international political level, Western countries led by the United States have long influenced the political economy of Iraq. European and American companies represented by GE and Siemens have almost dominated the construction and development of the Iraqi power market.

The third is the issue of power and new energy development planning. Since 2016, power giants such as Siemens and GE have repeatedly proposed to the Iraqi government a roadmap for the national power energy development plan, but they have not formed a clear national power development plan for Iraq.

In February 2021, the Iraqi Ministry of Petroleum stated that the Iraqi government plans to increase the installed capacity of photovoltaic power generation to 10GW by 2030, hoping that 20% of the power generation will come from solar power generation, but there is still no detailed implementation plan.

Chinese companies engaged in power and new energy businesses in Iraq need to be more proactive and professional providers of comprehensive solutions, require more diplomatic support from the government, and in-depth understanding of the market to enhance their competitiveness. Taking PowerChina as a starting point, we look forward to more Chinese companies reaching more cooperation in the field of new energy in Iraq, a hot land in the Middle East. Editor/Tian Zengpeng