Iranian Firms Will Export Electricity to Turkey

Iranian Firms Will Export Electricity to TurkeyIranian Firms Will Export Electricity to Turkey

Negotiations were held with several Turkish companies, resulting in preliminary agreements on electricity export from Iran to Turkey, said the managing director of the National Iranian Gas Exports Company (NIGEC) on Sunday, IRNA reported.

The Turkish companies currently in negotiations with the NIGEC are well-established companies, which run several power plants in Turkey, Alireza Kameli stated. "We have had their technical and financial capability strictly examined."

One of the objectives pursued from electricity exports is to "diversify gas exports, by converting it to electricity," the official said. The oil ministry has also joined the efforts to realize the goal.

However, the oil ministry has not informed the energy ministry of the plan to export electricity to Turkey, deputy energy minister told ISNA. "The oil ministry, or any of its subsidiaries [including NIGEC], should coordinate with us on the matter since any such project can be implemented only through utilizing the capacity of the power grid," Esmael Mahsouli asserted.  

Natural gas is the largest source of fuel for electricity generation in Iran, accounting for almost 70 percent of total generation. Oil, hydropower, coal, and non-hydro renewables make up the remaining fuel sources used to generate electricity, with marginal generation from Bushehr nuclear power plant that came online in 2011 but did not start commercial production until 2013.

Regarding electricity exports, the investor is entitled to a customary profit after energy conversion, transportation, and marketing costs are deducted. The difference between the investor's net profit and the export price will be owned by the other party which, as per contract, is either the National Iranian Oil Company or the NIGEC. The private investor will determine the location of the site, and the National Iranian Gas Company (NIGC) will supply the required gas.

The first contract to export electricity to Turkey was signed with an Iranian company last month, Kameli said, without providing any further details. Iran’s power industry is ranked 14th in the world and first in the Middle East in terms of electricity generation with an installed power generation capacity of 72,000 MW.

The country is the largest exporter and importer of electricity in the Middle East and exports electric power to Armenia, Pakistan, Turkey, Iraq, and Afghanistan. Azerbaijan and Armenia supply electricity to Iran under a swap agreement.