Iraq Plans to Go Nuclear to Resolve Crippling Power Shortages

(Bloomberg) --

Iraq is developing a $40 billion plan for nuclear power as the electricity-starved petrostate seeks to end the widespread blackouts that have sparked social unrest.

OPEC’s No. 2 oil producer -- already suffering from power shortages and insufficient investment in aging plants -- needs to meet an expected 50% jump in demand by the end of the decade. Years of neglect combined with plunging crude prices last year deprived the state of funds to maintain and expand the electricity system. The resulting outages triggered protests that threatened to topple the government.

To meet the challenge, the country plans to build eight atomic reactors capable of producing about 11 gigawatts, said Kamal Hussain Latif, chairman of the Iraqi Radioactive Sources Regulatory Authority. The government has held talks with Russian and South Korean officials and state nuclear power companies about working together to build the plants over the next decade, he said.

“We have several forecasts that show that without nuclear power by 2030, we will be in big trouble,” Latif said in an interview at his office in Baghdad. Not only is there the power shortage and surge in demand to deal with, but Iraq is also trying to cut emissions and produce more water via desalination -- “issues that raise the alarm for me.”

Iraq isn’t the only Arab oil producer in the Persian Gulf looking to split atoms to meet growing consumption. The United Arab Emirates, the No. 3 producer in the Organization of Petroleum Exporting Countries, hooked its first reactor to the grid this year and plans to bring three more online. Saudi Arabia, OPEC’s biggest producer, is also pursuing the technology and is building a test reactor.

Greening the Gulf

Nuclear power, which doesn’t produce carbon dioxide, would help Gulf states’ efforts to cut emissions as governments worldwide look to become greener. The technology would also allow them to earmark more of their valuable hydrocarbons for export. Saudi Arabia burns as much as 1 million barrels of crude a day in power plants during the Gulf’s summer months when temperatures soar beyond 50 degrees Celsius (122 Fahrenheit).

The Iraqi cabinet is reviewing an agreement with Russia’s Rosatom Corp. to cooperate in building reactors, Latif said. South Korean officials this year said they wanted to help build the plants and offered the Iraqis a tour of Korea Electric Power Corp.’s UAE reactors. Latif said the nuclear authority has also spoken with French and U.S. officials about the plan.

Neither Rosatom nor Kepco could comment immediately when asked about contacts with Iraq.

Even if Iraq builds the planned number of power stations, that still won’t be sufficient to cover future consumption. The country already faces a 10-gigawatt shortfall between capacity and demand and expects to need an additional 14 gigawatts this decade, Latif said.

With this in mind, Iraq plans to build enough solar plants to generate a similar amount of power to the nuclear program by the end of the decade.

Soaring Demand

Iraq currently boasts 18.4 gigawatts of electricity, including 1.2 gigawatts imported from Iran. Capacity additions mean generation will rise to as much as 22 gigawatts by August, but that’s well short of notional demand that stands at almost 28 gigawatts under normal conditions. Peak usage during the torrid months of July and August exceeds 30 gigawatts, according to the Electricity Ministry. Demand will hit 42 gigawatts by 2030, Latif said.

The nuclear authority has picked 20 potential sites for the reactors and Latif expects that the first contracts could be signed in the next year.

It won’t be Iraq’s first attempt to go nuclear. Four decades ago, an Israeli air strike destroyed a reactor under construction south of Baghdad. The Israelis alleged the facility, called Osirak, was aimed at producing nuclear weapons for use against them. Iraq suffered more than a decade of violence and upheaval after the 2003 U.S. invasion, which was also motivated by allegations that Iraq wanted to develop weapons.

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