VZCZCXRO2162
PP RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #3209/01 2671138
ZNR UUUUU ZZH
P 241138Z SEP 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 3537
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 02 BAGHDAD 003209 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID EAIR PREL IZ
SUBJECT:  RECORD BREAKING ELECTRICTY PRODUCTION 
 
BAGHDAD 00003209  001.2 OF 002 
 
 
¶1. SUMMARY: On September 16, 2007, the Ministry of Electricity (ME) 
set the latest in a series of record-breaking electricity production 
output levels. For the past five weeks the ME has sustained an 
upward trajectory of power production, which holds the promise of a 
new higher overall baseline power production level. System output 
improvement is largely the result of USG reconstruction programs and 
the effect of the Surge on repair efforts. In the coming fall and 
winter months, however, the ME will need to temporarily close 
generation facilities for planned maintenance. These "planned 
outages" may curtail current production levels. To mitigate 
curtailment, the Iraq Transition Assistance Office(ITAO), working 
with the U.S. Army Corps of Engineers, Gulf Region Division (GRD) is 
assisting the ME to re-route fuel from the plants closed for 
maintenance to plants that are idle for lack of available fuel. The 
Embassy is also helping the ME to facilitate the delivery of $150 
million in diesel fuel that awaits transportation from Kuwait to the 
Mussayib and Qudas power stations.  END SUMMARY. 
 
---------------- 
New Record Highs 
---------------- 
 
¶2. The ME set its all-time electricity output record on September 
16, 2007. The system produced 123,430 megawatt hours (MWH), which 
met 60% of demand nation-wide and 46% of Baghdad's estimated demand. 
Under the equivalent hours of power calculation, this level of 
output translates into 11 equivalent hours of power (HOP) supplied 
to Baghdad and 15 HOP to Iraq outside Baghdad. 
 
¶3. HOP is an attempt to divide total power output over a 24 hour 
period to establish some "quality of life" determinant that provides 
a snapshot of electricity availability to typical consumers. 
However, it can be misleading because the Iraq grid on a typical day 
provides nearly 24/7 service to essential service customers, such as 
hospitals, water plants and some government services facilities, via 
dedicated lines. Some residential customers are also served by those 
lines, which supplies them with more actual hours of available 
electricity than residential customers not served off those 
essential service lines. Further, in order to ration electricity, 
the ME must employ rolling blackouts, which affect areas in 
different way. Therefore, on a given day, some customers get more 
power than others residing across the street, or across town. For 
customers willing to pay, private generating units and neighborhood 
suppliers offer a supplemental market apart from the grid. Some have 
estimated that supplemental market provides as much as 25% more 
available power to the market. 
 
4.On September 11, 2007 the ME established a new system peak 
capacity record of 5,530 megawatts (MW), the capacity equivalent of 
supplying power around the clock to about 5.5 million homes. 
 
¶5. By comparison, the ME's prior output record was set on July, 16 
¶2006. That day the ME supplied 116,000 MWH, which met 34% of 
Baghdad's demand and 50% of demand outside Baghdad. Under the HOP 
calculation, production at that level supplied the equivalent of 8 
HOP to Baghdad and 12.6 HOP to Iraq outside Baghdad. 
 
--------------------------- 
Sustained Production Growth 
--------------------------- 
 
¶6. Apart from setting new record highs, the ME has sustained a five 
week period of production growth, which is now roughly 25% higher 
than it was a month ago. During this run the ME has set and broken 
twelve output and/or capacity records. And the grid has produced 
capacity over 5200 MW every day since early August. For the most 
part, the ME's production success is due to the effects of USG 
funded reconstruction programs and the Surge. 
 
¶7. The ME's current output trend may establish a new system 
production baseline. However, in the short-run output could dip 
because the ME will soon be shutting down generators to conduct 
planned maintenance. The ME is working with the Mission to implement 
actions to mitigate the output suppression effects the maintenance 
outages may otherwise have on power supply. One is to examine the 
feasibility of re-routing fuel that would otherwise be burned in the 
plants closed for maintenance to plants that are now idle for lack 
of any fuel to power them. Also, the ME, with USG assistance, is 
working to secure delivery of $150 million of diesel fuel that it 
has already purchased from Iraq's Southern Oil Marketing Company 
(SOMO). 
 
------------------------------------- 
The Reasons for Increased Electricity 
------------------------------------- 
 
¶8. There are five contributing reasons that account for current 
production success; four are a direct or indirect result of USG 
programs: 
* USG-funded (IRRF) and managed (GRD/ITAO) Operations & Maintenance 
(O&M) programs are yielding an additional 20% of output due to 
operational efficiencies. 
 
 
BAGHDAD 00003209  002.2 OF 002 
 
 
* New Iraqi generation and USG-funded rehabilitated units have come 
on-line. 
* Dura - Units 5 & 6 (180 MW) 
* Qudas - Four Units (132 MW) 
* Mussayib - Thermal Units (400 MW) 
* Nasiriyah -Thermal Unit (150 MW) 
* Mussayib - Gas Turbine commissioned (45 MW) 
 
* The Surge has suppressed attacks on infrastructure and repair 
teams. 
 
* Capacity increases have marginally stabilized the network, making 
it (slightly)                             more resilient to 
conditions that would otherwise cause a shut-down. 
 
* Finally, cooler weather allows generators to operate more 
efficiently. 
 
------- 
Comment 
------- 
 
¶9. ITAO/Electricity hopes that current output levels reflect the 
establishment of a new system production baseline. In the 
short-term, however, the ME must soon begin shutting down some units 
for planned maintenance. Therefore, unless the capacity lost to 
maintenance can be replaced, current levels of output will 
temporarily decline. There are two possible, realistic, mitigating 
actions available to the ME.  Currently, about 450 MW of capacity is 
idled simply for lack of fuel. The ME has purchased from the 
Ministry of Oil, through its SOMO production company, $150 million 
of diesel fuel, the delivery from Kuwait of which has been delayed 
pending resolution of a variety of transportation disputes. 
Officials from our Iraq and Kuwait embassies, working with the ME, 
are attempting to facilitate a resolution that will liberate the 
diesel for the Iraqi power plants. 
 
¶10. GRD and ITAO are also working with the ME to assemble the ME's 
maintenance plan to assess the feasibility of re-routing fuel from 
the shuttered-for-maintenance-plants to the idled-for-lack-of-fuel 
plants during the maintenance period. Success with either or both of 
these contingencies could provide sufficient capacity to substitute 
for that lost to the planned outages and sustain the current 
baseline levels. And, with cooler temperatures around the corner, 
demand will ease, giving the ME some flexibility and relaxing some 
stress on the network. 
 
Crocker