Private Firms to Launch Renewable Energy Projects

Private Firms to Launch Renewable Energy ProjectsPrivate Firms to Launch Renewable Energy Projects

Diversifying the use of energy resources is one of the main objectives of the energy ministry, and it is promoting private investment to meet this end, deputy energy minister, Houshang Flahatian, said on the sidelines of his visit to the Khorramshahr gas-fueled power plant on Monday.

The energy ministry is working towards expansion of renewable energy network, and therefore will back private investors interested in construction of wind and photovoltaic power plants. Contracts were signed with private firms for construction of 1,000 megawatt (MW) wind power plants. "The ministry is receiving plenty of requests from investors," Falahatian stated.

Credits are to be allocated from the National Development Fund of Iran (NDFI) and the Oil Stabilization Fund (OSF) to support private firms investing in solar and wind power stations, the official noted.

NDFI is the country's sovereign wealth fund, founded in 2011 to supplement the OSF. NDFI is to extend 50% of its financial facilities to private, cooperative and non-governmental sectors and 20% to promote foreign investment. The remaining 30% is invested in capital markets abroad.

A sharp increase in renewable energy production is expected over the next years, according to the deputy minister. While the share of renewable resources from the total energy production currently stands at almost 0.5%, the number is expected to reach 5 percent in the coming years.

There is a great potential for wind energy production in Khuzestan Province, the official said, adding that licenses required for construction of wind and solar power plants in Khuzestan Province will be issued "at the shortest time possible."

Iran needs to generate 5,000 MW of renewable energies by 2015 as stipulated in the Fifth Five-Year Economic Development Plan (2011-16).

Electricity Export to Turkey

Turkey has demanded an increased amount of electricity import from Iran, Falahatian stated.

Turkish firms have expressed readiness to construct power plants in Iran, and transfer electricity through the existing network to Turkey. The price of exported electricity will be determined, in accordance with international standards, after a final agreement is reached.

"We will discuss electricity supplies from Iran during our upcoming visit to Turkey, which is requested by Turkish Energy Minister Taner Yildizz," the official added.

On account of growing energy consumption in Turkey, and the fact that it does not have fossil fuel resources, it has been purchasing electricity from Iran, and is now willing to raise the amount, while pledging to fund requisite power plant projects.

Iran’s power industry ranks 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.

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