The head of Iran's Renewable Energy and Energy Efficiency Organization (SATBA), is setting up a ‘Green Power Board’ at the Iran Energy Exchange (IRENEX), to help improve market competition.
“By starting renewables trade at the capital market, policymakers seek to create a direct supply-demand market, expand use of renewable energy and establish a competitive environment for renewable energy,” Mahmoud Kamani was quoted as saying by IRNA.
A ceremony for launching the Green Power Board will be held on May 22, Kamani said.
IRENEX is a multi-commodity market for energy futures and commodities, including oil, gas, electricity, petrochemicals and oil byproducts. It was launched in 2013 as the fourth exchange and operates under the auspices of the Securities and Exchange Organization (SEO) of Iran.
Kamani said after getting the construction permits and other licenses, SATBA will sign 20-year contracts with renewable power plants. “After that the power plants will be introduced to the IRENEX, get a trading code and offer their electricity on the energy exchange.”
If investors are unable to sell their electricity on the exchange for any reason, SATBA will settle their claims based on 70% of the discovered rate at the power plant.
Regarding benefits of investor participation in the energy exchange, he noted that with the entry of renewable energy companies in the exchange market, controversial government interventions in pricing electricity will end. “Additionally, buyers will be obliged to pay their bills on time to the electricity companies”.
Attracting Investments
"The hope is that with the creation of the new platform, development of renewable energy will accelerate encouraging more investors to join the sector."
The official added that industries that buy electricity from the Green Power Board will not face electricity restrictions during peak hours in the summer.
Studies show renewable investment in Iran turns a profit. The Energy Ministry plans to raise annual renewable energy output to 5,000 MW in four years in collaboration with private firms.
Private companies have invested $1 billion in the expanding renewable sector, mainly solar and wind, but they are expected play a bigger role.
Currently, 7,000 solar power stations of different sizes are operating in the country. Renewables, including solar and wind, account for around 1% of the total electricity generation capacity of more than 90 GW.
Renewable energy is the least expensive option for improving access to electricity, reducing air pollution and cutting CO2 emissions. It also contributes to sustainable socioeconomic growth, boosts GDP growth by 1% and contributes about 15% to welfare, mainly through health benefits from reduced air pollution, a report by the International Renewable Energy Agency said.
Share of Solar and Wind
According to Energy Ministry data, solar and wind account for 48% and 36% of the domestic renewable power production, respectively.
Small-scale hydroelectric plants, waste-to-energy plants and biomass factories constitute 13%, 2% and 1% of the total renewable output.
Introduction of the Green Power Board is seen as a major step towards promoting renewable energy and establishing a competitive market for renewables. With this initiative, the Tehran government aims to encourage investment in the renewables, reduce dependency on fossil fuels and create the proper conditions for a cleaner and sustainable future.
The integration of renewable power plants into the Energy Exchange should also help enhance transparency, efficiency, and competitiveness in the renewables market. It can also create opportunities for investors to participate in the renewable sector and promote the growth of renewable energy in the country of 85 million people.
As Iran continues to expand renewable capacity, the Green Power Board would play a key role in the integration of renewables into the national grid, underpin sustainable economic growth and meet energy demand while reducing the carbon footprint.
Unveiling the Green Power Board is seen as a positive move towards expanding renewable energy and demonstrating the government’s commitment to achieving its green energy goals.
The initiative not only encourages the transition to a greener economy but also fosters innovation and collaboration among diverse stakeholders in the renewable sector.
