Lack of access to cutting-edge technology in household and industrial sectors, and the absence of cultural awareness regarding energy optimization have placed Iran among the most energy inefficient nations, the head of the Iran Association of Energy Service Companies said.
“Households use at least 35% of the total electricity generated in Iran, which can decline to 20% if energy-intensive appliances are replaced with energy-efficient equipment,” Saeed Mohazab Torabi was also quoted as saying by ILNA.
There are 300,000 wells in the agro sector, all equipped with pumps, but thanks to outdated technology, a massive amount of power goes to waste in the sector, he added.
According to the official, energy intensity will not decline unless new laws are adopted, especially regarding low power prices.
Electricity, like water, gasoline, gas and some foods, are subsidized in Iran – a decades-old economic policy the government cannot afford, but is hesitant to reverse.
Power generation in Iran costs at least 3 cents per kilowatt-hour, but consumers pay less than 1 cent per kWh.
Disparities between real electricity production costs, including generation and transmission, and the revenue of the state-run Iran Power Generation, Distribution and Transmission Company is so huge that raising tariffs even by 20% cannot help.
Having said that, Torabi stressed that as long as promoting the cultural awareness of the society is not a priority and families and industrial units are deprived of high-tech energy-efficient devices due to sanctions and massive inflation, increasing the prices cannot be an effective remedy.
Energy Intensity
Energy intensity is a measure of energy efficiency calculated as units of energy per unit of gross domestic product. High energy intensity indicates a high price or cost of converting energy into GDP and vice versa.
Close to 2.4% of the world's energy, equal to the energy produced by burning 3.6 million barrels of oil per day, is produced in Iran and 1.8% of the total energy are consumed.
Iran’s energy intensity is three times higher than the global average and 2.5 times the Middle East average. Following countries like Russia and Saudi Arabia with energy intensity indices at 0.53% and 0.5% respectively, Iran is ranked third with 0.63%.
"Iran's energy intensity was 0.8% in 2015, an equivalent of 6,000 barrels of oil," Hamed Houri Jafari, an advisor to Iranian Fuel Conservation Organization, said.
In the same period, Japan, South Korea, China, Saudi Arabia and the UAE had intensities of 0.1% (0.733 barrels), 0.2% (1.466 barrels), 0.27% (1.97 barrels), 0.4% (2.93 barrels) and 0.12% (0.87 barrels) respectively.
Iran’s household sector consumes an equivalent of 1 million barrels of oil per day that is nearly eight times that of the most energy-efficient countries.
Warning Over High Energy Consumption
Noting that the volume of energy consumption and wastage is exceeding supply, Jafari warned that Iran would turn into a major energy importer within a few years, if the problem is not addressed soon.
Comparing energy consumption in different sectors with those of other countries, he said a large amount of energy is wasted in homes while the “large part of energy in developed countries is consumed by industries”.
According to Farzad Kiasat, an energy expert on construction affairs, the massive energy consumption is rooted in poorly insulated walls, windows, age-old heating and cooling systems, and inefficient light bulbs.
A single swamp cooler uses as much as 70 liters of water per day.
The abundance of subsidized energy is a key factor that has exacerbated the prohibitively high consumption and waste.
Kiasat said things cannot change for the better unless buildings are made compatible with the climate and nature, especially in the hot southern regions and cold northern parts.
Iran consumed 2,873 tons of oil equivalent per capita in 2012, roughly the same as Italy with an economy over four times its size, according to World Bank estimates.
A report by the Iranian Chamber of Commerce, Industries, Mines and Agriculture says that according to the International Energy Agency, Iran tops the global list in terms of energy subsidies.
For instance, the government paid $45 billion in direct and indirect energy subsidies in 2017, it said.
Established in 2012, the Iran Association of Energy Service Companies is aimed at managing and developing energy services in the country as efficiently as possible.
