Iraq’s energy sector faces urgent challenges and also significant opportunities for renewable energy development. At a critical juncture in the global transition to clean energy, the country remains heavily reliant on fossil fuels. Its dependence on oil and gas, which represent over 98% of its energy mix, exposes it to volatile global oil markets, environmental degradation and increasing energy insecurity. Iraq is rich in solar and wind resources, but renewable energy has witnessed minimal development, and accounts for less than 2% of the total primary energy supply.
This report “Energy transition assessment: Iraq” by IRENA provides a comprehensive evaluation of Iraq’s renewable energy landscape. Key challenges and opportunities are identified, and policy recommendations are provided to accelerate the country’s transition towards a sustainable energy future. Iraq’s electricity demand continues to outpace supply, triggering chronic shortages, grid instability and widespread use of diesel generators. Energy losses are high in Iraq; inefficiencies in generation, transmission and distribution result in the loss of over 50% of the total primary energy supply.
It highlights that the deployment of solar and wind projects has been slow; installed renewable capacity is only 1,598 MW. This is mainly due to the challenges represented by the first-time implementation of project finance schemes in Iraq, where regulatory and policy frameworks are still outdated, governance structures are fragmented – exemplified by overlapping mandates between federal and regional authorities – and bureaucratic hurdles hinder renewable energy investment.
Key steps forward include prioritising the development of utility-scale solar and wind farms in high-resource regions, fostering distributed renewable energy generation and integrating energy storage solutions, such as battery storage and pumped hydro, to manage the variability of renewable energy sources. The successful implementation of renewable energy projects requires strong political will, institutional reforms and targeted investments in enabling infrastructure.
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