Iraq has spent around $4.3 billion on electricity production so far in 2025, but clean energy still plays only a very small role. According to the Eco Iraq Observatory, renewable sources make up just about 2% of the country’s total electricity output.
Eco Iraq pointed out that Iraq sells electricity at some of the cheapest prices in the world. Power tariffs range from 1.5 to 4.6 cents per kilowatt hour, ranking Iraq seventh globally and second in the Arab world for the lowest electricity prices.
Right now, almost all electricity in Iraq comes from fossil fuels. About 98% of power is generated from traditional sources, while renewables like solar and hydropower barely contribute.
Current electricity production reaches around 28,000 megawatts, but that’s not enough. To fully meet demand, Iraq would need close to 50,000 megawatts, according to the Observatory.
Eco Iraq said reaching that level won’t happen without major changes. These include cutting down on wasted electricity, stopping illegal connections to the grid, and replacing outdated equipment used by consumers.
There is some movement on clean energy, though. In October, the government launched a $6 billion renewable energy program. The plan aims to produce up to 12 gigawatts of green power by 2030, working with international companies like TotalEnergies, Masdar, and PowerChina. If successful, the projects could add as much as 10,000 megawatts to Iraq’s power supply.
For now, Iraq remains heavily dependent on fossil fuels, but the push toward renewables has officially begun.
