Boosting the efficiency of thermal power plants by 5% can help reduce the consumption of liquefied fuel, including mazut and diesel, by 13 million liters per day, the export of which can help earn $4 billion per annum for the National Iranian Oil Company.
Based on information released by oil and energy ministries, power stations’ daily consumption of natural gas as feedstock is close to 200 cubic meters, IRNA reported.
However, owing to the lack of gas in the cold season (mainly between November and March) when households account for the lion’s share of gas use (650 mcm/d), power plants have to burn at least 100 million liters of mazut and diesel per day, otherwise widespread outages become inevitable.
The average efficiency of Iranian power plants is around 35%. If and when the figure reaches 40%, the facilities’ consumption of diesel and mazut can reduce by 100 million liters per day (50 million liters of mazut and 50 million liters of diesel), which can be exported.
In other words, increasing the efficiency of power plants can help export liquefied fuel instead of burning it and exacerbating air pollution in big cities.
According to statistics disclosed by the administration, power plants are charged 400 rials (0.16 cent) for each liter of diesel or mazut whereas the same amount of fuel can be sold at 140,000 rials (60 cents) in international markets.
Thermal power stations account for 80% of total power generation in Iran, so enhancing their efficiency is crucial
It is simple math that NIOC can earn close to $4 billion annually, if fuel consumption in power stations were to decrease by 13 million liters per day.
Thermal power stations account for 80% of total power generation in Iran, so enhancing their efficiency is crucial.
Iran has an installed capacity of 84,000 MW. Thermal units, which either use steam, gas-powered or combined-cycle turbines, account for 66,000 MW of the total production.
A total of 123 thermal power plants are operational, which give Iran the ninth global ranking.
The government has said it wants to phase out inefficient power plants, improve aging electricity infrastructure and adopt modern power production technology.
"Under regulations outlined by the Energy Ministry, all new power plant units must have an efficiency of 58% and above," Mohsen Tarztalab, managing director of Iran's Thermal Power Plants Holding Company, said.
Converting conventional plants into efficient combined-cycle units is one of the priorities of the government.
Gasoline Consumption
Massive domestic gasoline consumption has also deprived the state-run NIOC of its overseas income.
According to Hamid Hosseini, a member of the Iranian Oil, Gas and Petrochemical Products Exporters Union, the export of gasoline has been suspended since last May due to heavy domestic consumption.
“The revocation of inter-city traffic and travel restrictions has spiked gasoline consumption by 50% and caused supply and demand to reach equilibrium.” Hosseini said.
“In other words, NIOC had to halt the sale of gasoline to neighboring states, including Iraq, Afghanistan and Pakistan, as there is no excess fuel for export and whatever is produced is being burnt domestically.”
The National Iranian Oil Refining and Distribution Company, a subsidiary of NIOC, produces close to 90 million liters of gasoline per day, but massive local consumption, which has exceeded 85 ml/d, leaves no room for exports.
According to the official, unlike oil that can be tracked and cannot be sold easily under the sanctions’ regime, gasoline and diesel can be exported with no difficulty but growing local use has deprived NIOC of its foreign currency revenues.
Each liter of gasoline is sold at 5 cents in Iran and the same amount of fuel fetches more than 100 cents in Afghanistan.
