Electricity consumption surpassed 37,000 megawatts between April 20 and 22 and peaked at 37,500 MW on Wednesday, April 23.
According to Barq News website, this was at least 12% higher compared to the year before when it was 33 gigawatts.
Power consumption increased 500 megawatts (in the household sector) in the past few days, reaching 37,500 MW, and this is while the temperature has not risen in many parts of the country. The mercury in Tehran on Friday afternoon showed 23 °C.
According to Iran Grid Management Company data, electricity exchange between Iran and the neighboring states including Azerbaijan was around 3 GW during the three days.
State-affiliated Iran Power Generation, Distribution and Transmission Company (Tavanir) exported 2,000 MW and imported 1 GW between April 20 and 22.
Iran is the largest exporter and importer of electricity in the Middle East. It exports power to Pakistan, Turkey, Iraq and Afghanistan. Azerbaijan and Armenia sell electricity to Iran under swap agreements.
Electricity demand in Iran reached 57,500 MW last summer and it is not expected to exceed 59,500 GW this summer because manufactures (heavy electricity consumers) have been hit by depressed demand in the domestic market, falling purchasing power, shortage of raw materials, rising prices of goods and services (resulting in higher factory prices) and the new US sanctions.
Adding insult to injury is the coronavirus that is still spreading and is expected to peak in the fall. The infectious virus has made a bad situation worse for production units and industrial power consumption is projected fall as factories shutter or cut output while layoffs continue.
Generating one kilowatt of electricity, including cost of generation, dispatch and transmission, is 6 cents per kilowatt-hour. Consumers pay 4 cents per kWh
According to Mohsen Salehinia, a deputy minister of industries, mining and trade, 40% of manufactures and industrial towns are operating at less than half their capacity. There are 973 industrial towns in Iran.
Barqnews.com added that at least 150 small towns in the southern deprived areas, namely Kerman, Fars and Sistan-Baluchestan, were linked to the national grid in 2019 and rural communities with over 20 families (31,000 households) joined the network.
Although Iran’s electricity generation has made progress and installed capacity is about 84 GW, Tavanir says boosting power production is important not only for meeting rising domestic demand but also to increase exports as part of the government strategy to create a regional power network.
Possible Alternative
Regarding the government’s financial restrictions and a ballooning budget deficit, tapping into private sector potential to fund power projects could be helpful.
Private firms (in the electricity industry) have undertaken 84 projects in the past four decades, adding 13,000 MW to national production.
Nonetheless, volatility and instability in the currency market and the Energy Ministry's aversion to fair and reasonable tariffs for electricity produced by private companies have lowered their profit margin and discouraged investment in the sector.
One kilowatt of electricity, including cost for generation, dispatch and transmission, is 6 cents per kilowatt-hour. Consumers pay 4 cents per kWh. The disparity has been a bone of contention among private companies and government authorities long wedded to the risky business of subsidies.
In the past few years almost 50% of foreign direct investment in Iran’s power sector was in green energy. Now 200 companies active in the renewable sector are facing insolvency because the ministry has not increased the tariffs and insists that producers sell what they produce for 15 cents for 6 cents per kWh!
The imprudent policy has undermined the industry that had been growing gradually, and many companies are unable and unwilling to continue work in the (hugely loss-making) sector.
