Beyond Oil: Why Iraq’s Energy Transition Needs Infrastructure Before Investment

Introduction

Iraq’s push toward renewable energy is finally gathering political momentum. Solar and gas-capture deals are being signed at record pace.

But the truth is uncomfortable: you can’t build an energy transition on a weak grid.

Without transmission capacity, reliable substations, and a modern dispatch system, every new megawatt of generation is like water poured into a leaking bucket.

The Promise vs. The Platform

In 2024 alone, Iraq announced over 5 gigawatts of planned solar capacity through partnerships with Gulf and European developers. The deals look impressive on paper — long-term PPAs, international financing, and headline-grabbing figures.

But on the ground, many of these projects face the same foundational challenge: the infrastructure to absorb and distribute the power simply doesn’t exist yet.

Large-scale renewables require:

• High-voltage transmission lines capable of handling intermittent load.

• Grid-balancing systems and smart substations.

• Storage integration and reactive power management.

• Regional dispatch centres capable of tracking variable generation.

Most of Iraq’s network still relies on legacy systems from the 1980s, patched with emergency repairs during the last two decades.

Until that base is rebuilt, every new generation project increases instability rather than reliability.

Where the Grid Breaks

The issue isn’t ambition — it’s synchronisation.

Power generation projects are approved and funded separately from transmission and distribution upgrades.

This leads to “stranded megawatts” — electricity that can be generated but not delivered to demand centres due to overloaded or disconnected lines.

In 2023, several gas and solar plants in southern Iraq operated at under 60% utilisation because the nearest 400kV transmission routes were already at capacity.

The result: wasted investment and eroded investor confidence.

Funding the Wrong End of the Chain

International lenders and energy companies prefer funding generation — it’s tangible, fast to deliver, and headline-friendly.

Transmission and distribution, on the other hand, are messy: slower ROI, high local coordination requirements, and deep bureaucratic entanglement.

But Iraq’s future reliability depends exactly on those unglamorous systems.

Without grid reinforcement, renewable energy becomes an expensive political statement, not a sustainable solution.

What Needs to Change

1. Synchronise planning. Generation, transmission, and distribution must be planned as a single delivery ecosystem — not separate ministry projects.

2. Invest in grid intelligence. Modern dispatch control, digital substations, and metering will stabilise power flow before more capacity is added.

3. Localise maintenance. Iraq’s networks degrade because maintenance remains centralised. Decentralised regional teams can cut downtime drastically.

4. Rebalance financing. Shift a portion of international funding toward transmission modernisation — even if returns are slower, the system gains longevity.

Private Sector’s Opportunity

Foreign and domestic firms with capability in power systems, substations, cabling, logistics, and controls have a once-in-a-generation opening.

Iraq’s government knows that grid reform is unavoidable.

The firms that position themselves now — with practical, incremental solutions rather than abstract megaprojects — will define the transition phase.

Conclusion

The future of Iraq’s energy system won’t be decided by how much solar capacity is announced, but by how much electricity actually reaches the consumer.

Investment must follow infrastructure logic, not political sequencing.

Before Iraq can transition beyond oil, it must first build the grid strong enough to carry the future.