The Ministry of Energy owes $80 million to combined heat and power plants this year, the head of Iran CHP Association said.
Small-scale power plants are among the cheapest sources of electricity the and built by private companies with little dependence on public resources or the National Development Fund of Iran, Mehr News Agency quoted Ehsan Sadr as saying.
The government is struggling with budgetary constraints for years and “is unable to build big and costly power plants. Instead the private sector has risen to the occasion” and has invested in small-scale power plants to help meet rising demand, he noted.
Small-scale plants, known as standalone or off-the-grid systems, can be used in remote areas where it is difficult to extend power lines.
For construction of a big power plant the government needs an estimated $60 million while a small-scale station (25MW or lower) can be built with $2 million.
Although the Energy Ministry is obliged to purchase electricity from small-scale power plants for five years, the biggest problem is that “they have not been paid for more than six months this year. This, however, does not include arrears of previous years,” Sadr complained. “We are aware of the financial limitations of the ministry, but the pressures are harming investors.”
Cogeneration or combined heat and power is the use of a heat engine or power station to generate electricity and useful heat at the same time.
A CHP plant works based on the supply of high temperature heat from a biomass boiler or fossil fuel driven boiler. The high temperature heat drives a gas or steam turbine-powered generator and the remaining heat is then used for the intended local application.
Advantages
CHP is an energy efficient technology that generates electricity and captures the heat that would otherwise be wasted to provide useful thermal energy—such as steam or hot water—that can be used for space heating, cooling, domestic hot water and industrial processes.
By using waste heat recovery technology to capture wasted heat associated with electricity production, CHP systems typically achieve total system efficiencies of 60% to 80%, compared to 50% for conventional technologies.
“If the power plants are not paid they cannot carry out their annual maintenance and repairs, and probably may not be able to operate at full capacity next summer when consumption rises,” Sadr said.
Small-scale electricity generation is slowly replacing big fossil-fuel driven plants, which currently are the world’s single largest contributor to greenhouse gas emissions.
Small stations help preserve the environment. While establishing a major power plant with a capacity of 500 MW requires at least 50 hectares of land, a 25MW power plant occupies less than 0.3 hectares.
