2 THE POLITICS OF LOW-CARBON ENERGY IN IRAN AND IRAQ
43
For Iran, the key to developing large amounts of non-hydro renewables
could proceed through an easing of sanctions via negotiations with the
USA, and depending on the state of American politics. That would at least
allow European, Indian and East Asian firms, and possibly even Middle
Eastern neighbours, to get involved. International support for a large
renewables programme would reduce the rationale for further growth in
nuclear generation. Or, a decision by major politically-connected business
groups to get involved in renewables could foster a more supportive set
of policies, using a mix of locally-manufactured and imported, particularly
Chinese, equipment. Key policy improvements would include reducing
subsidies, simplifying procedures and improving access to finance at lower
costs. These two routes are not necessarily mutually-exclusive, though as
noted, the presence of IRGC-linked companies tends to deter and exclude
foreign competition. Estimates of the IRGC’s share in the economy range
from one-sixth to two-thirds of the economy, 117 though references tend
to be circular, with unclear methodology, and the higher figures are
implausible given that most of the large oil, agricultural and services
sectors are not under IRGC control.
For Iraq, domestic capability and finance is much more limited. Largescale international investment is crucial. There is substantial interest from
a wide range of firms and countries, including GCC neighbours with a
political interest in building bridges to Baghdad. By starting with some
smaller projects, the MOE could build confidence in its payment model
and bring down costs before awarding larger projects, 118 so avoiding the
risk of being locked into a big and high-priced PPA, or being accused of
corruption for accepting bid prices much higher than those of regional
neighbours. The IEA’s report proposed 21 GW solar PV and 5 GW wind
by 2030, generating 30% of Iraq’s electricity. This pace of progress looks
unattainable now, but Iraq’s renewable sector could still advance quickly
under the right contractual model and with sustained and consistent policies. This, in turn, would require the new government of Mustafa Al
Kadhimi, or a successor, to be able to overcome vested interests and statist
positions, in the face of the political and economic emergency engulfing
Iraq since mid-2019.
43
For Iran, the key to developing large amounts of non-hydro renewables
could proceed through an easing of sanctions via negotiations with the
USA, and depending on the state of American politics. That would at least
allow European, Indian and East Asian firms, and possibly even Middle
Eastern neighbours, to get involved. International support for a large
renewables programme would reduce the rationale for further growth in
nuclear generation. Or, a decision by major politically-connected business
groups to get involved in renewables could foster a more supportive set
of policies, using a mix of locally-manufactured and imported, particularly
Chinese, equipment. Key policy improvements would include reducing
subsidies, simplifying procedures and improving access to finance at lower
costs. These two routes are not necessarily mutually-exclusive, though as
noted, the presence of IRGC-linked companies tends to deter and exclude
foreign competition. Estimates of the IRGC’s share in the economy range
from one-sixth to two-thirds of the economy, 117 though references tend
to be circular, with unclear methodology, and the higher figures are
implausible given that most of the large oil, agricultural and services
sectors are not under IRGC control.
For Iraq, domestic capability and finance is much more limited. Largescale international investment is crucial. There is substantial interest from
a wide range of firms and countries, including GCC neighbours with a
political interest in building bridges to Baghdad. By starting with some
smaller projects, the MOE could build confidence in its payment model
and bring down costs before awarding larger projects, 118 so avoiding the
risk of being locked into a big and high-priced PPA, or being accused of
corruption for accepting bid prices much higher than those of regional
neighbours. The IEA’s report proposed 21 GW solar PV and 5 GW wind
by 2030, generating 30% of Iraq’s electricity. This pace of progress looks
unattainable now, but Iraq’s renewable sector could still advance quickly
under the right contractual model and with sustained and consistent policies. This, in turn, would require the new government of Mustafa Al
Kadhimi, or a successor, to be able to overcome vested interests and statist
positions, in the face of the political and economic emergency engulfing
Iraq since mid-2019.