Alwaght- On Thursday, Iraqi and Saudi energy ministers signed an agreement to see Saudi Arabia export power to Iraq. The agreement was signed between Saudi Energy Minister Abdulaziz bin Salman and Iraq's Electricity Minister Adel al-Karimi. Iraqi Cabinet Secretary-General Hamid Al-Ghezi said that in addition to power grid connection, the two countries' delegations agreed to cooperate in industrial parks and sports.
The agreement was signed as a meeting of the Joint Iraqi-Saudi Cooperation Council (JCC) was held on January 10. The cooperation boost and multiplicity of meetings between the heads of state of the two countries is now a serious issue grabbing the attention of the political observers. Some believe that these different levels of cooperation will be a new chapter in bilateral relations between the two countries, and the result could be the entry of the two sides into strategic cooperation. Others, however, believe that given the history of bilateral relations, their strategic partnership will be fraught with obstacles and difficulties.
Important points concerning Saudi power exports to Iraq
1. This deal is the latest case of cooperation between the two countries, which shows the considerable progress in bilateral relations between the two countries in recent years. The agreement was signed with the aim of sharing power reserves and exchanging this source of energy in the event of an emergency and in the time of outage.
2. It comes at a time when in November last year it was declared that Iraq intends to sign a multi billion-dollar energy investment agreement with Saudi Arabia by the end of the government of Prime Minister Mustafa al-Kadhimi.
3. Since the beginning of 2021, the Iraqi government has grown more serious about attracting Saudi investment for gas, renewable energies, water, and petrochemical industries, which are estimated to require tens of billions of dollars in investment. In the past few months, negotiations between the Iraqi government and Saudi companies, such as Aramco and Aqua Power, to help in energy production, construction of desalination plants, production of clean energy, and solar power plants have been underway.
4. An important point in the deal is that the (Persian) Gulf Cooperation Council countries– Oman, Qatar, UAE, Kuwait, Bahrain and Saudi Arabia– have connected their power grids in recent years, and Iraq in November completed the project to connect its power network to Kuwait. So, with the connection of the Kuwaiti power network to Iraq, the already-signed MoU can go operational, though even now there is no urgent need for Saudi-Iraqi power grid connection as Kuwait emerges as an initial supplier.
Saudi Arabia and its power surplus
Over the past decade, Saudi Arabia especially focused on excessive electricity production and exports. The annual growth in Saudi power production sector has been nearly 5 percent during this period. Some projects, however, went into delay over the past four years because of slump in oil prices and then coronavirus outbreak. Still, it can be said that the electricity generation grew substantially in recent years.
In the new situation, Saudi Arabia plans to add 15,000 megawatts to its solar and wind power generation in the next two years, most of which is intended for export. In such circumstances, Saudi Arabia has signed the agreement of exporting electricity to Iraq in order to share power in case of power shortage or outage. In 2018, Saudi Arabia signed an MoU to export solar power to Iraq. Under this MoU, the kingdom agreed to build a 3,000-megawatt solar power plant, offering each megawatt-hour of electricity for $21, the quarter of the price of power imported from Iraq as a major electricity supplier to Iraq for nearly two decades.
Guarantees of the Saudi adherence to energy exports to Iraq
Despite the massive media coverage of the export agreement, the question now arises as to whether cooperation between the two countries has sufficient executive guarantees. Also, can this deal be implemented as an official agreement between two foreign countries? In answering these questions, we can focus on two issues: One is the capability of Saudi Arabia and the (P) GCC countries in energy and power supply and exchange and the other is motivations and functions of Saudi energy policy.
When it comes to the power exports capabilities, it should be taken into account that Riyadh alone lacks the ability to meet all of Iraqi power needs and shortages. Saudi Arabia is behind the capability to meet Iraq power needs especially in the summer, a season of explosive power consumption rates. Meeting Iraqi needs, however, is possible if the country is given access to collective Persian Gulf Arab states power grid. Currently, Iraq integration into the collective (P) GCC grid is at its early stages and a green light from all members is required.
Second aspect of the agreement is Saudi political motivations. The government of Saudi Arabia, under the leadership of its ambitious and hardline Crown Prince Mohammed bin Salman, has used energy policy in recent years to achieve specific political goals. Saudi Arabia has been instrumentalizing energy exports and investment in various energy sectors in other countries. Prince Mohammed's approach is as follows: Promise to align your foreign policy with us in return for our investments in energy production infrastructures.
Iraq is no exception. Iraq should fully set its regional policy with that of Saudi Arabia if it wants its power needs met by the (P) GCC states, not necessarily just Saudi Arabia. In other words, bin Salman is instrumentalizing power supplies to dig influence deep into the Iraqi political sovereignty and governance, while at the same time forcing down rivals especially Iran. In simple words, bin Salman intends to take Baghdad hostage using power exports policy.
From this perspective, there is no guarantee Saudi power export commitments would see implementation and continuation. Because whenever Iraq takes an independent foreign policy stance, bin Salman would simply violate his commitments. Saudi-Pakistani agreements are good examples of Saudi violation of promises. The crown prince reviewed contracts and aid packages to Pakistan when tensions sparked between Riyadh and Islamabad over Kashmir crisis.
