Iran Energy Exchange (IRENEX) on Monday launched its ‘Green Power Board’ where renewable power plants can sell their output.
The event, attended by the Minister of Energy Ali Akbar Mehrabian, Mahmoud Kamani, head of the Renewable Energy Organization (SATBA), Majid Eshqi, head of the Securities and Exchange Organization and representatives of private power companies.
The first renewable electricity transaction took place with a price of 199,500 rials per kilowatt-hour and a volume of 670 kilowatt-hours, the IRENEX website reported.
By starting renewables trade in the capital market, policymakers seek to create a direct supply-demand market, expand use of renewables and establish a competitive environment for renewables.
Ali Naghavi, the CEO of Iran Energy Exchange, emphasized the need of private sector involvement in renewable energy expansion, stating that it can only be achieved through the establishment of a market based on transparency and efficiency and by extension decentralizing government structures.
Naghavi highlighted the change in the Ministry of Energy's approach over the last two years, resulting in cooperation between the ministry and IRENEX to offer proposals for "electricity exchange development" and the relevant guidelines.
He considered trading electricity generated by renewable power plants as one of the important issues. “Iran Energy Exchange has long prepared for this.”
Based on earlier reports, eight power plants have been listed with the Green Power Board.
As per the plan 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.
He expressed readiness of the exchange to accept other power plants as soon as they submit their requests, hoping that approval for the inclusion of all renewable power plants in the exchange would be granted by SATBA.
“Over the past two months, since the announcement of the establishment of the Green Electricity Hall by the Ministry of Energy, Iran Energy Exchange has hosted private investors wanting to build renewable power plants, and while considering funding needs and options, willing to sell electricity not through the existing guaranteed purchase contract mechanism but through a transparent and competitive platform.”
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).
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.
Studies show renewable investment in Iran turns a profit. The Energy Ministry says it wants 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 expanding the key renewable sector, mainly solar and wind but are expected to play a bigger and effective role.
