Iraq signs deal with consortium led by Norway's Scatec for 525 MW solar plants

Iraq signed an agreement with a consortium led by Norway's Scatec Solar to build two solar power plants with a total capacity of 525 MW as OPEC's second-biggest producer accelerates push to lower reliance on oil and gas for power generation.

The project is part of plans to develop 7.5 GW of renewable power before 2023, oil minister Ihsan Ismaael said in an Oct. 7 statement.

The other companies in the consortium are Egypt's Orascom Construction and Iraq's Bilal.

The deal with Scatec follows the signing of an agreement with UAE's Masdar, the renewable energy firm owned by sovereign wealth fund Mubadala Investment Co., to develop 1 GW of renewable power from five plants in an initial phase. The second phase includes the development of another 1 GW.

Iraq has been striking a number of renewable agreements to help lower its dependence on oil and gas as feedstock for power generation.

In September, Iraq signed $27 billion worth of deals with TotalEnergies that include building a 1 GW solar power plant.

Iraq and state-owned PowerChina have also signed an initial agreement to develop up to 2 GW of solar power plants, the prime minister's media office said Aug. 25.

In the first phase, PowerChina will develop 750 MW, the media office said, without disclosing more details about the agreement.

IOC help

Iraq is courting international oil companies to develop its gas resources to meet its power generation needs and lower dependence on Iranian gas, Ismaael said Oct. 6.

The ministry's target is to reach 4 Bcf/d of production from associated gas and another 1.5 Bcf/d from free gas by the end of 2025, Ismaael told Energy Intelligence Forum on Oct. 6.

However, Iraq's power sector needs a minimum of 7 Bcf/d as feedstock for its 40 GW of installed electricity capacity, which means that independence from Iranian gas is a long way off.

Moreover, annual energy consumption is growing 5%-7% due to the expanding population.

Iraq is under increasing pressure from the US to wean itself off electricity and gas imports from Iran, which has been subject to US sanctions since 2018.

The US administration has been granting Iraq waivers since 2018 to continue importing Iranian energy.

Iranian intermittent supply of gas and electricity has led to widespread shortages in Iraq this summer, when the temperature has soared to 50 degrees Celsius, especially in the south.