Many challenges facing the current and the future governments of Iraq, and one
of these challenges is the situation of the power sector in the country. This study is
about finding economic optimization scenarios for Iraq power mix, as the country
is in dire need to minimize its power generation costs and finding the ultimate
power mix structure that can help in developing the country for the better. Mean
Variance Approach (MVA) is used to optimize the national power mix. It
considers various costs that are involved in the power generation and the
associated risks of using a particular power generation technology. The three
main generation power technologies that were taken into account are gas
turbines, thermal and diesel power stations in addition to the electricity imported
and the generated electricity by the independent power producers (IPPs). The
study proposes an optimization scenario balancing between the involved costs and
risks associated with the power mix. The optimal scenario is to use around 47%
gas turbines, 14% thermal, 0.04% diesel, 2% hydro and 33% IPPs.
Keywords
Electricity planning, Energy policy, Iraq, Mean variance, Portfolio theory