Iraq Power EPC Market

Iraq Power EPC Market Analysis

The Iraq Power EPC Market is expected to register a CAGR of greater than 5% during the forecast period.

In 2020, COVID-19 had a detrimental effect on the market. Presently, the market has reached pre-pandemic levels.

• Over the medium term, with the growth in power consumption in the region, there has been an increase in the number of power generation projects, thus enabling a considerable market for the EPC industry in the power generation sector. Upcoming solar projects are also likely to drive the EPC market in the forecast period.
• On the other hand, imposed sanctions from the United States are some significant factors that can restrain the growth rate significantly.
• Nevertheless, the Iraqi government decided to reduce Iranian gas and also plans to generate between 2.24 and 7.5 GW of electricity from renewable energy by 2025. With this, Iraq is expected to create opportunities for new power projects to meet the energy deficiency.

Iraq Power EPC Market Trends

Thermal to Dominate the Market

• Iraq, with its vast reserves of hydrocarbons, is highly dependent on thermal energy for power generation. During the forecast period, with upcoming projects, thermal energy is expected to dominate the power EPC market.
• In December 2022, Mitsubishi Heavy Industries (MHI) subsidiary Mitsubishi Power completed the restoration of Unit 1 at the Hartha Thermal Power Plant in Basra, Iraq. The project involves restoring Unit 1's gas- and oil-fired steam turbine equipment to its original 200-megawatt output (MW).
• As the electricity transportation and distribution facilities in Nineveh have been badly damaged in the war, the government has managed to maintain and repair some of them, and there are plans to rebuild others.
• Additionally, in July 2022, according to the electricity minister of the country, Iraq is planning to build a new thermal energy plant in the Northern Nineveh Governorate within a program to reconstruct war-damaged facilities.
• According to the BP statistical review for 2022, the total electricity generation in Iraq accounted for 112.5 TWh in the year 2021. The annual growth rate of electricity generation was 6.6% as compared to the previous year.
• Thus, with the increasing demand for electricity and upcoming thermal power projects as well as the maintenance of older thermal plants, the generation is expected to grow, which, in turn, will support the Iraq EPC market for thermal power.

Increasing Renewable Energy Installations is Expected to Drive the Market

• For the growth of solar, Iraq is taking a free-market approach by allowing investors to bid different prices, with the least expensive ones being awarded the projects on a build-own-operate (BOO) and IPP (Independent Power Producer) basis. With this, new projects are expected during the forecast period.
• In May 2022, according to the Ministerial Energy Council of Iraq, the country was awarded a contract to build 2,500 MW of solar power projects by foreign companies. With the installation of these solar projects, Iraq will be able to achieve its target of producing 12,000 MW of renewable energy by 2030, which will create demand for the Iraq EPC market in the future.
• Additionally, in April 2022, the central bank of Iraq approved USD 680 million in funds for renewable energy projects in the country. With this investment, the government plans for clean sources of energy that will support the environment and tackle power shortages.
• According to the International Renewable Energy Agency, Iraq's total renewable energy installed capacity accounted for 1599 MW in 2022. With the government's target towards clean energy and supportive investments for renewable projects, renewable capacity is expected to increase in the future, which will support the EPC market in the forecast period.
• Despite a stagnant market for renewable energy with an installed capacity of 1599 MW in 2022, Iraq has a huge potential for solar energy. With upcoming projects and ambitious goals, the renewable sector is likely to have significant opportunities to drive the EPC market.

Iraq Power EPC Industry Overview

The Iraq power EPC market is moderately fragmented. Some of the major players in the market (in no particular order) include Siemens AG, North Power Company Ltd, Shamara Holding Group, Unitech EPC Solutions, and General Electric Company.

Iraq Power EPC Market Leaders

Iraq Power EPC Market News

• October 2022: The Ministerial Council for Energy of Iraq approved a 200-MW solar power station in the Karbala governorate. In December 2021, the cabinet agreed to construct two solar power projects in Karbala of 300 MW capacity and Alexandria/Iskandariya of 225 MW capacity.
• May 2022: Alba inked an EPC contract with Mitsubishi Power and SEPCO III for Block 4 of Power Station 5. The Mitsubishi Power & SEPCO III collaboration will be responsible for designing, engineering, procuring, constructing, and commissioning a 680.9 Combined Cycle Gas Turbine Power Block under the conditions of the contract.