Power outages during peak hours almost ended in 2019 and a similar trend is forecast this year, managing director of Iran's Thermal Power Plants Holding Company said.
“Due to frugal consumption in different sectors, especially industries and farming, growth in power consumption in 2019 was barely 2%. Up until 2018 growth was 7%,” Mohsen Tarztalab said in an interview with Donya-e-Eqtesad media group's video-streaming service EcoIran on Sunday.
If industries and farmers uphold their commitment to the deal with state-run Iran Power Generation, Distribution and Transmission Company (Tavanir) to shift consumption from on-peak to off-peak periods, there will no blackouts this summer because consumption will reduce by at least 5,000 megawatts (during peak hours), he said.
In 2018 and 2019, as per Tavanir’s contract with farmers and industry owners, those who turned off their water pumps and electricity-intensive tools between 12 pm to 5 pm were eligible for discounts in their bills.
The policy helped cut consumption in the key agro sector by 2% (2 GW), whereas it had shot up by a staggering 8.3% between 2007 and 2017.
If industries and farmers shift consumption from on-peak to off-peak periods, consumption will reduce by at least 5,000 megawatts
Tarztalab expressed the hope that pursuing the same policy can help meet power demand without major hassles in summer when it is predicted to reach 61 gigawatts.
“Whether or not power cuts would be announced (between June and September) depends on consumption levels.”
The official reiterated that the best solution to meet growing demand is to inspire people to stick to the demand of wisdom (by giving them discounts in billing that so far has been effective).
As per law, subscribers in cities with relatively moderate climate should use less than 300 kWh a month to be eligible for a discount, but in the hot southern provinces like Khuzestan the same ceiling is 1,200 kWh per month.
Financial restrictions, the new US sanctions and volatility and instability in the forex market notwithstanding, close to 3 GW of new (thermal) power production capacity has been added to the national grid in the last 12 months, increasing installed power capacity to 84 GW.
“This output (84 GW) is enough to meet current demand, but lack of investment in the sector is cause for concern and we could face serious shortage in the near future,” the senior power official told EcoIran.
Private Sector Aversion
The Energy Ministry’s unpaid bills to the private sector has surpassed $2 billion and so long as tariffs do not increase, private power producers will remain reluctant to invest in the loss-making sector.
Power generation cost, including production and transmission, is close to five cents per kilowatt-hour, but subscribers are charged 1.4 cents per kWh because electricity is heavily subsidized in Iran.
Power experts say raising output is not an optimal solution to address challenges of the key power sector.
“Tariffs must rise along with production or else prudent consumption will remain a missing link forever.”
Referring to other ills including the outbreak of coronavirus, Tarztalab noted that routine maintenance programs show work-in-progress of 90% since September 2019 and work should be completed by June before the hot season sets in.
Network load reached 58,000 megawatts during peak hours last fiscal year and is expected not to exceed 61 gigawatts this summer.
Not denying the adverse impact of the contagious disease, he said work continues without interruption, but obviously the momentum is slower compared to the past.
The number of electricity meters in Iran has reached 36.5 million with 1 million new consumers having joined the grid since 2019.
