The Renewable Energy and Energy Efficiency Organization (Satba) is obliged to prepare the ground for private sector investment in and the export of renewables.
Energy Minister Ali Akbar Mehrabian made the statement on the sidelines of the inauguration of the 12th Iran International Renewable Energy and Energy Efficiency Exhibition in Tehran on Monday, ILNA reported.
“The Energy Ministry is preparing a plan of action based on which solar and wind power generated by private companies can be sold without state interference,” he added.
According to the minister, the production and export of green energy should be as competitive as possible, such that private investors are able to handle all operations without government intervention.
“Providing thermal power stations with subsidized natural gas as feedstock is the main obstacle to the green sector expansion,” he said.
Simply put, as long as gas-powered units run on cheap fuel, private firms will not be able to compete with them.
As per law, the government buys electricity from large solar plants and small photovoltaic stations.
However, “with the new action plan whose details will be announced soon, private companies can directly use the electricity they produce, sell it to others, or export it,” he added.
One of the reasons behind the plan is the government’s limited financial resources to continue payment of electricity subsidy and the other is the oft-mentioned government decision to downsize and privatize.
In the past 10 years, the number of private companies active in the renewable sector – wind and solar – has shot up from three to over 500.
Mehrabian said private sector investment in renewable projects now exceeds $2 billion and Satba has been tasked with devising regulations and establishing infrastructure for investors to generate and sell electricity to foreign buyers.
Facilitative Role
The Energy Ministry will play a facilitative role and not intervene in the process of attracting buyers and determining charges, he added.
"The government will also not benefit from the ventures and the investors will only be charged with land and transit tariffs."
The minister noted that Iran enjoys enormous potential for the production of different kinds of renewable energies, including geothermal, solar and wind power.
"The private sector is the key to reach the goal … We welcome domestic and foreign players keen to participate in such ventures," he said.
Mehrabian said a lack of competition in an energy market largely dominated by the public sector has held back the renewable industry.
According to Mahmoud Kamani, Satba’s managing director, the state-run company has received permits from the government's Economic Council to add 4,000 megawatts to the current renewable electricity capacity of 980 MW.
“Contracts to build 60 solar farms with a total capacity of 1,400 MW in 14 provinces will be signed soon with the private sector," he added.
Moreover, eight industrial units, which are mostly producing cement, steel and petrochemicals, are now allowed to construct solar and wind farms with a capacity of 2,314 MW.
Giving a breakdown, Kamani noted that of the total capacity, solar and wind power plants will account for 1,877 MW and 400 MW respectively and the rest is expected to be biomass systems.
“Licenses to build nine more renewable power stations with a capacity of 1,062 MW will be granted to other industrial companies in the near future,” he said.
As per the contract between the state-run Power Generation, Distribution and Transmission Company and industrialists, the former is obliged to help all industrial units set up solar or wind farms, with stable power all year round, especially during peak demand hours in June and July.
Major Breakthroughs
Major breakthroughs have been made in storing solar power in batteries and concerns regarding fluctuations in power output are gradually being removed.
Investments in photovoltaic power projects can have several advantages for industries, especially steel mills, one of which is that a 10-MW solar farm can become operational in four months, he added.
The construction of renewable plants requires much less funding than building thermal power stations, the smallest of which costs $3 billion and they will take a minimum three years to be synchronized with the national power grid while steel factories need to cover the power deficit in the shortest possible time.
A total of 97 domestic and foreign companies, including those from Spain, Germany, Canada, the UAE, Austria and China, are displaying innovative products and technologies related to green energy in the 12th Iran International Renewable Energy and Energy Efficiency Exhibition that will run until Sept. 15.
The last fair dates back to 2019 before the global outbreak of Covid-19 virus.
The four-day exhibition will focus on new products and technical, engineering and export services, as well as knowledge-based companies.
According to Satba, the fair seeks to help the domestic renewables market thrive, facilitate the global marketing process and help promote the industry in international markets.
