36 R. MILLS
capturing associated gas, flaring has continued at high levels, an estimated
16.8 billion cubic metres (BCM) in 2018, with 11.5 BCM captured
and used, because of inadequate facilities to process the gas, and lack
of pipeline capacity to power plants. 78 Iraq also imports gas from Iran,
reaching about 32 million cubic metres daily in April 2020. 79 The USA
has repeatedly granted waivers for Iraq to import Iranian gas and electricity, recognising its indispensability, but has shortened the period of
these waivers at times to give it leverage on Iraqi politicians, and repeatedly pressured Baghdad to find alternative supplies. In July 2020, Iraq
completed its side of a 1 GW link to Kuwait which would enable it to tap
into the GCC grid. 80
The KRI had managed to establish reasonably reliable electricity
service, mostly powered by gas and some diesel, but the fiscal burden has
been heavy, with diesel for the Dohuk power plant estimated to cost $100
million per month more than gas would. 81 By 2020, fuel and generating
capacity shortages and power theft had led electricity provision to fall to
14–15 hours daily, with completion of the new Khabat fuel oil-powered
plant hoped to boost that to 16–17 hours. 82
Federal Iraq has suffered from severe and continuing power shortages, as significant growth in generation and fuel supply has still failed
to keep up with demand. Peak generation was about 18 GW in summer
2019, plus 1.4 GW of imports from Iran, compared to estimated peak
demand of about 25.3 GW. 83 The difference is met by power cuts and the
use of distributed neighbourhood diesel generators, which receive fuel at
subsidised prices. Technical losses, mostly in the distribution networks, are
estimated at 40% and non-technical losses (unofficial connections/theft)
at 20%, exceptionally high levels that compromise the ability to meet
demand. 84 For comparison, transmission and distribution losses in Iran
are about 15% and the world average is around 8%. 85 Even customers who
pay their bills are only covering about 10% of the real cost of electricity
provision, 86 making it impossible for the MOE to stand on a commercial basis. In April 2019, the World Bank considered a $200 million
loan to improve transmission, distribution and billing in four southern
governorates. 87
Subsidy reform has been almost impossible, because of political and
public opposition. Political parties and influential individuals seek a cut of
spending on MOE projects, and block them if corrupt payments are not
forthcoming. They also have a strong influence on personnel choices at
capturing associated gas, flaring has continued at high levels, an estimated
16.8 billion cubic metres (BCM) in 2018, with 11.5 BCM captured
and used, because of inadequate facilities to process the gas, and lack
of pipeline capacity to power plants. 78 Iraq also imports gas from Iran,
reaching about 32 million cubic metres daily in April 2020. 79 The USA
has repeatedly granted waivers for Iraq to import Iranian gas and electricity, recognising its indispensability, but has shortened the period of
these waivers at times to give it leverage on Iraqi politicians, and repeatedly pressured Baghdad to find alternative supplies. In July 2020, Iraq
completed its side of a 1 GW link to Kuwait which would enable it to tap
into the GCC grid. 80
The KRI had managed to establish reasonably reliable electricity
service, mostly powered by gas and some diesel, but the fiscal burden has
been heavy, with diesel for the Dohuk power plant estimated to cost $100
million per month more than gas would. 81 By 2020, fuel and generating
capacity shortages and power theft had led electricity provision to fall to
14–15 hours daily, with completion of the new Khabat fuel oil-powered
plant hoped to boost that to 16–17 hours. 82
Federal Iraq has suffered from severe and continuing power shortages, as significant growth in generation and fuel supply has still failed
to keep up with demand. Peak generation was about 18 GW in summer
2019, plus 1.4 GW of imports from Iran, compared to estimated peak
demand of about 25.3 GW. 83 The difference is met by power cuts and the
use of distributed neighbourhood diesel generators, which receive fuel at
subsidised prices. Technical losses, mostly in the distribution networks, are
estimated at 40% and non-technical losses (unofficial connections/theft)
at 20%, exceptionally high levels that compromise the ability to meet
demand. 84 For comparison, transmission and distribution losses in Iran
are about 15% and the world average is around 8%. 85 Even customers who
pay their bills are only covering about 10% of the real cost of electricity
provision, 86 making it impossible for the MOE to stand on a commercial basis. In April 2019, the World Bank considered a $200 million
loan to improve transmission, distribution and billing in four southern
governorates. 87
Subsidy reform has been almost impossible, because of political and
public opposition. Political parties and influential individuals seek a cut of
spending on MOE projects, and block them if corrupt payments are not
forthcoming. They also have a strong influence on personnel choices at