Over $100 million have been earmarked in the budget bill approved for the next Iranian year (March 2022-23) for the expansion of renewable energy in Iran, the energy minister said.
“This is an unprecedented figure, as the credit is exclusively dedicated to this sector,” Ali Akbar Mehrabian said, adding that the fund will enable the government to attract more private investments into the sector.
“The development of renewables is not only a choice, but also a necessity since renewable energy will help address the problems of generating electricity by thermal power plants,” he was quoted as saying by the Energy Ministry’s news portal Paven.
Elaborating on the issue, he said thermal power stations need fuel as feedstock and water for cooling purposes and also pollute the environment. This is while renewables, being eco-friendly, require neither fuel nor water, nor do they emit greenhouse gas.
Comparing the cost of the fuel supplied to thermal power plants and the money needed for constructing new renewable plants, Mehrabian said fuel consumption costs in three years equals the investment for building several renewable power plants, which can operate for decades, without consuming any kind of fuel.
Currently, 900 MW of electricity are produced through renewable resources, which account for about 1% of the total power production capacity in the country (85,000 MW).
New Contracts
The government issued tenders for the construction of renewable power plants in fall.
According to the Energy Ministry, it received 153 applications for building 90,000 MW of renewables capacity.
The Renewable Energy and Energy Efficiency Organization (Satba) signed contracts with 12 private firms on Sunday for generating 30,000 MW of electricity via renewable sources in the next four years. The contracts include the construction of solar, wind and hydroelectric power plants.
The Energy Ministry’s estimates suggest that launching 10 GW of new renewables capacity will save the country 5.6 billion cubic meters of natural gas that is supplied to conventional power generation systems every year.
Investment by private firms in the sector has surpassed $1.1 billion, mostly in solar power, and the government attempts to encourage private producers to play a more active role in the renewable sector.
Offering higher prices is an incentive for investors. Tariffs for different types of power stations increased last May and reached 4.4 cents and 4 cents per kWh for photovoltaic power plants and wind farms respectively.
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, respectively.
Iran has a diverse climate with vast windy lands and more than 300 sunny days a year, which make it ideal to tap into wind and solar power.
There are more than 115 large solar farms in the country and around 3,500 small-scale solar installations in cities and villages. Over 2,500 rooftop photovoltaic power stations will be set up by next year, mainly in deprived and rural areas.
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, boosting global gross domestic product growth by 1%, employing close to 29 million people and generating a 15% increase in welfare, mainly through health benefits from reduced air pollution, based on a report by the International Renewable Energy Agency.
Renewables can also help transform unsustainable production and consumption patterns, protect biodiversity, reverse deforestation and combat land degradation.
