Unlike other countries where the energy intensity rate (total energy consumption per unit of GDP) has witnessed a downtrend in the last decade, statistics show a massive uptrend in Iran in the given period.
Mostafa Rajabi-Mashhadi, the spokesman of electricity industry, made the statement on the sidelines of a seminar themed “Energy in Steel Industry” in Tehran on Wednesday, the Energy Ministry’s news portal reported.
Iran’s energy intensity rate is nearly twofold higher than that of other countries, he added, noting that based on data from academic studies, the average power consumption to manufacture goods and provide services in Iran is at least two times more than the global average.
Industries account for 40% of Iran’s annual power consumption of 280 billion kilowatt hours.
Rajabi-Mashhadi said that of the total consumption in industries (112 billion kWh), the steel sector accounts for 52%, whereas the figure for producing other metals, namely aluminum and copper, stands at 18%.
“The production of 1 ton of steel in Iran requires 800 kilowatt hours of electricity, which is 300 kWh or 35% higher than the global average,” he added.
The average power consumption to manufacture 1 ton of steel in China, Turkey, India and Russia is approximately 494 kWh, which is 300 kWh less than the power used in Iran’s steel mills.
In other words, close to 300 kWh of electricity go to waste for producing each ton of steel, as power optimization techniques in the key industry are ignored in Iran and the production methods and technologies are outdated.
Iran’s annual steel output is around 40 million tons, meaning approximately 12 billion kWh of power are annually wasted in the steel sector.
“This can be avoided if energy efficiency plans are implemented,” the spokesman said
Electricity deficit in Iran was about 7 billion kWh in 2021, which show that total power waste in steel industry is almost twofold higher than the country’s annual electricity deficit.
Energy Use in Steel Industry
The steel industry is critical to Iran’s economy, as it is the material of choice for the construction, transportation, manufacturing and consumer goods production. It is the backbone of bridges, skyscrapers, railroads, automobiles and appliances.
Globally, energy use in the steel industry has been declining.
A 10-year historical trend (1991-2002) indicates that the steel industry has witnessed a 30% decline in energy consumption, but this is not the case in Iran.
According to Rajabi-Mashhadi, industries can play a key role in boosting electricity output by embarking on power plant development projects, in which case they will no longer be at the mercy of the state-run Iran Power Generation, Distribution and Transmission Company (Tavanir).
“This way, they will be enabled to use their own power-generating plants and not be dependent on the national power grid,” he added.
Mining and manufacturing industries are negatively affected by the power supply crisis in the summer, as they are forced to halt operations repeatedly in June and July because the state-run utility company cannot produce sufficient electricity.
“When heavy industrial customers are equipped with their own power stations, they will not need to stop their business in the summer when demand exceeds supply.”
If industries complete their power projects, the Energy Ministry guarantees that adequate power will be supplied to factories even during peak demand hours, regardless of households’ consumption level.
All industrial units that consume more than 2 megawatts of electricity per month are charged 2.5 cents per kilowatt hour.
As per the new bill passed by the Majlis last year, electricity tariffs for energy-intensive industries, namely cement factories, oil refineries and petrochemical and steel companies, have increased fivefold since March.
Investment of Industries
According to Seyyed Zaman Hosseini, a deputy managing director of Tavanir, the first power plant constructed with the investment of industries was connected to the national power grid in September.
“The first gas unit of Shahid Bakeri Power Plant in Semnan Province, with a capacity of 183 megawatts, is operational and its second and third gas units, each with a capacity of 183 MW, is underway,” he added.
Hosseini noted that a steam unit will also be built so that the plant will become a combined-cycle one.
Usually, one-third of the capacity of combined-cycle power stations is dedicated to steam units, which will be built next to the gas units and no longer require fuel as feedstock.
Last year, the engineering and energy giant MAPNA Group signed a deal with the Mines and Metals Development Investment Company to develop the combined-cycle power plant in Semnan.
The deal stipulates design, engineering, procurement, installation and commissioning of advanced gas units equipped with MAPNA’s own E-Class MGT-70(3) gas turbines.
MAPNA is a conglomerate of Iranian companies involved in the development and execution of thermal and renewable power plants, oil and gas facilities, railroads and other industrial projects as well as the manufacture of equipment.
The new plant is built next to Semnan Thermal Power Plant, comprising two gas units with a capacity of 162 MW each (totaling 324 MW), which was also built by MAPNA Group and is operating since 2010.
