Economic Analysis of the Electricity Mix of Iraq Using Portfolio Optimization Approach

Hashim Almusawi and Arash Farnoosh ()
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Hashim Almusawi: IFPEN - IFP Energies nouvelles, IFP School
Arash Farnoosh: IFPEN - IFP Energies nouvelles, IFP School

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Abstract: 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 gasturbines, thermal a nd 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; Portfolio theory; Mean-Variance (search for similar items in EconPapers)
Date: 2021-06-01
New Economics Papers: this item is included in nep-ene and nep-isf
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Published in International Energy Journal , 2021, 21 (2)

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