Isam Al Khalisi, a veteran of the power industry, sent an email commenting on my column of two weeks ago “Oil producers take refineries closer to consumers”.

He pointed out how the power industry moved in a similar fashion, and with his permission, I quote in full where he said: “Not surprisingly, there are many factors in common between the oil industry and the electricity generation industry.”

In the first half of the 20th century, bulk generation of electricity was solely dependent on coal and, later, oil. Public electricity generating stations were thus located near coal mines, oil refineries or seaports where those primary fuels were supplied. Transporting the generated electricity from there was more economical than transporting the fuels; hence centralised electricity generation was commonly adopted.

From the 1960s onwards, natural gas became available in large quantities. It was not only cheaper to use as the prime source for electricity generation, it was also cheaper to transport than high voltage electricity lines. This was clearly demonstrated by bringing Europe’s North Sea and Russian gas to individual countries and distributing it through local gas grids rather than electrical grids.

Area of demand

Another example is the supply of Egyptian natural gas, when it was available, to Jordan for electricity generation rather than exporting electricity.

New electricity generating plants were built nearer the area of demand and in much smaller sizes than older centralised plants. The old high voltage and long electricity transmission lines were still kept in use because they were already there and large generating stations were still in working order.

By the dawn of the 21st century the ability to exploit solar and wind energy became more recognised. The numbers and sizes of new renewable energy electricity projects has escalated dramatically. Europe is committed to 20 per cent of its electricity to come from renewables by 2020.

With the strong likelihood of developing facilities for large mass electricity storage capacities, the changeover is more likely to increase.

The pointers at this time are that big central electricity stations will run to the end of their working lives and not replaced by similar ones. The apparent tendency is to move away from centralised systems in favour of decentralised ones.

Tragedy

As an expert who follows enthusiastically the power generation in Iraq, he says: “The tragedy for Iraq is that it has been up till now nearly isolated from what is going in the rest of the world in its energy sector development. The managers of the country’s energy have been more concerned with self-interest and self-aggrandisement than with public interest.

“This has resulted in covering up of overwhelming ignorance of the subject and/or being out of date by half a century or more of the industry’s progress.”

Here are two examples of each:

In July 2014, the Deputy Prime Minster for energy sector issued a directive to all government departments to stop using natural gas for electricity generation and that alternative fuels must be used.

In December, the minister of electricity published an article promoting constructing high voltage electricity lines to connect all Arab countries from Iraq and the Gulf states in the east to North Africa in the west.

This kind of macro-thinking sounds more like propaganda than actual analysis and vision. It also hides the failure to fix the power industry in Iraq though billions have been spent but the greater majority of consumers are not in the least satisfied.

In an open letter to the minister, Al Khalisi criticises the Ministry of Electricity for including imported electricity within its own production to impress the public, or rather to deceive them. This is not a small matter as the difference between what the ministry says is a production of 14,025MW and actual production of 11,862MW is not a small matter of the 2,163MW difference representing imported electricity.

He points out that the deficiency grew from 1,947MW in 2004 to 7,864MW in 2015 and perhaps to more than 9,000MW in July 2016.

Technically, it is natural for the power and refining industries to borrow from each others’ experience and to move forward with time. After all, the two work to the same codes and standards in many aspects.

The refining industry is an important consumer of electricity but may not be the major one. However, let no one forget that without electricity, there will be no refining industry as we know it today and therefore the two are entwined forever.

As for Iraq, I don’t know if Al Khalisi’s open letters and my columns will ever make a difference.

The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.