To bolster power supply, 100 development projects are underway to add 2,700 megawatts to the production capacity of distributed generation (DG) power stations.
According to Energy Ministry data, DG or on-site generation power plants nationwide have a capacity of 1,200 MW and as soon as the new projects become operational, the capacity will witness a 125% growth, ILNA reported.
DG systems currently account for 2% of Iran’s total power generation that has reached 86 gigawatts. It meets key requirements in an optimized electricity system, namely security, improved efficiency, high system reliability, affordable energy cost and low environmental impacts.
Few companies are able or willing to invest in large-scale power projects due to the huge investments involved, the ministry said, noting that smaller units do not need large amounts of funding and have adequate market demand. Proximity to end-users and less transmission loss or energy waste are other merits of DG plants.
DG generation is electricity produced in small quantities near the point of use, as alternative or supplement to traditional centralized grid-connected power. It reduces the cost and complexity associated with transmission and distribution, while offsetting peak electricity demand and stabilizing the national grid.
Most small-scale units in Iran are powered by diesel.
As the Energy Ministry's plan is to put an end to building costly and conventional power plants, the construction of distributed generation plants has now become a priority.
“Several small-scale power plants with DG system have joined the provincial grid [in 2020 and 2021], such as Kerman, Zanjan, Yazd and Khuzestan,” Mostafa Rajabi Mashhadi, spokesman of Iran Power Generation, Distribution and Transmission Company (Tavanir), said.
Tehran and Sistan-Baluchestan provinces have the highest (370 MG) and lowest (10 MW) DG capacities.
Purchase Scheme
Urging private investors to help expand power production, Rajabi said the Energy Ministry buys electricity under a guaranteed five-year purchase scheme.
“To encourage investors in summer when consumption peaks, each kilowatt hour of electricity produced via DG power plants is purchased eight times higher than the tariff for power produced in thermal stations,” he added.
One kilowatt-hour of power is bought at one cent from thermal power plant owners.
According to the Tavanir spokesman, power from distributed generation is supplied to remote rural areas, provides backup to customers in the event of grid failure and supports the power grid during peak demand to help reduce network load.
Proximity to end-users and lower transmission loss or energy waste are other advantages of DG plants.
Referring to a newly-built DG power station in Taft County in Yazd Province, Rajabi said the facility will help stabilize power supply in the desert region.
With a 10-MW capacity, the station will annually generate at least 77,000 megawatt hours. Costing $10 million, the plant was built with the help of a private enterprise, Tadbir Niroo Company.
Small-scale power stations account for 167 MW of the province’s total output.
A memorandum of understanding for the construction of 150-megawatt small-scale power plants has been signed between the Khuzestan Regional Electricity Company and Safat Energy Yazd Company (Safatco).
As per the MoU, several small-scale power stations will be constructed in different parts of the southwestern province, each with a maximum production capacity of 25 MW.
Khuzestan Regional Electricity Company is committed to help implement these projects, including the identification of proper sites where power plants are going to be built and guaranteeing the purchase of the generated electricity.
Based in the central Yazd Province, Safatco has been active in power and petroleum sectors for over 13 years. Its operations include the construction and maintenance of steam and gas turbines, compressors, generators and cooling systems.
