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Iran Sets Up Growth Plan to Develop Renewable Energy

From Albawaba, 27 December 2015

Iran has set up an aggressive growth plan to boost green energies as a key sustainability factor as part of the economic diversification goal under its sixth Development Plan, according to Frost & Sullivan.

The environmental and economic sustainability issues in Iran’s Economy Mission 2025 have led to incentive plans to attract the private sector to renovate obsolete power technologies and develop renewable and biomass energies across the country.

Based on Iran’s energy road map, the Government plans to embrace green technologies to increase nominal capacity of power plants from 74 GW to over 120 GW by the end of 2025.

The government has called for new investments, which require technology, engineering, and know-how and to reach this capacity (120 GW), as the country requires investments of more than $60 billion.

Ali Mirmohammad, senior consultant and business development manager, Frost & Sullivan, said: “The electricity market in Iran grew at a compound annual growth rate (CAGR) of 6.5 per cent over the past 10 years, which is far beyond its gross domestic product (GDP) growth rate, which is currently not more than three per cent.”

“Iran has witnessed the emergence of new participants in the manufacturing and agricultural sectors. Additionally, every year, almost 1.4 million new consumers are added to the electricity market. These developments require an additional capacity of 5,000 MW for each year and enhancement/new investments in the distribution and transmission network.”

The power generation plants in Iran are the main consumers of natural fuel resources and consume over $30 billion per annum of various fuels including Natural Gas (36 billion cubic meters), gas oil (12 billion liters), and fuel oil (15 billion liters).

Poor efficiency in the power generation and transmission infrastructure results in a huge loss to the economy (over $200 million per one per cent loss during transmission) that needs to be urgently addressed through new investments.

“Installing new generation high-efficiency turbines, design and construction of new GIS sub-stations, construction of high-voltage transmission lines, as well as inclusion of renewable and green technologies into the energy mix are major plans expected to be implemented by the Iranian Government in the post-sanction era. In addition, biomass from rural waste is the other key investment opportunity in Iran,” noted Mirmohammed.

The renewable energy industry in Iran is at a nascent stage. Located on the earth’s solar radiation belt and having a high potential has created scope for expanding solar technologies in Iran.

In the geothermal field, Iran is located on the active geothermal belt and, according to the exploration studies done in this field the country is gifted with 15 potential geothermal areas.

Currently, less than one per cent of the total energy in Iran is supplied through renewable energies. However, the Government plans to boost investment in the 6th Development Plan.

The target is to install over 5,000 MW renewable energies, which include 4,500 MW of wind power and 500 MW of solar power. Currently, the potential for installing over 15 GW wind energy in areas such as Manjil, Zahedan, Zabol, and Nishapur has been recognized by the Renewable Energy Organization of Iran.

Mostafa Rabeie, head of International Affairs, Renewable Energy Organization of Iran, stated: “Iran can supply over two-thirds of its energy through wind power. The long-term policy within the next decade (2015-2025) is to supply over 50% of required energy through renewables, biomass, as well as other green technologies. Renovation and modernization of existing Thermal Power Plants with green technologies is also part of the plan.

"To reach the capacity of 5000 MW of renewable energies, Iran requires investment of over USD 10 billion while project financing is a key restraining factor in this sector as of now. To meet the challenge, Iran aims to attract foreign financing to ease investment across the country. However, this is not possible unless sanctions are lifted. Currently, over 19 projects, which require over $1.5 billion, have been proposed."

Suggested additional reading on renewable energy:
Energy Management: How to Reduce your Heating Consumption at Home
The Big Shift to Energy: Why Energy Management Matters to Businesses
Global Nations and their Transition towards Clean and Renewable Energy

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