The Energy Ministry has settled $1 billion of its debt to banks, private power plants and the Iranian National Tax Administration over the past 12 months, the ministry's deputy for economic and planning department said.
“The debts were mainly related to the ministry-affiliated firms, namely Tehran and Khuzestan regional electricity companies, Water and Power Resources Development Company, Thermal Power Plants Holding Company, Iran Grid Management Company and the Renewable Energy and Energy Efficiency Organization,” IRNA also quoted Mohsen Bakhtiar as saying.
He noted that of the total debt, $460 million were paid to banks, including lenders Melli, Saderat, Tejarat, Sepah and the Central Bank of Iran.
“The ministry also paid $360 million and $180 million to private contractors and Tax Affairs Organization respectively in the period,” he said.
Due to the huge gap in the real energy costs and the bills sent to consumers, the government must pay annually pay at least $1 billion in subsidies.
"Government debt to the Energy Ministry related to the disparities between real electricity costs, including distribution, transmission and generation, and what consumers actually pay, has amounted to $3 billion," he said.
“There are some 750 water and power plans, worth $40 billion, pending and cannot be completed unless the contractors are reassured that they will be paid.”
Sharp Rise
According to the deputy energy minister, Homayoun Haeri, as soon as households, offices and commercial units start to use their cooling systems, the current peak load at 40,000 megawatts will experience a sharp rise to reach 70 gigawatts and this is while state-run Iran Power Generation, Distribution and Transmission Company’s (Tavanir) maximum power generation capacity is 65 MW.
“To meet the gap, we will need at least 10 power stations that is literally impossible, so curbing consumption between June and September is a must, otherwise power outages will be a norm,” he added.
Moreover, the working hours of executive offices and administrations will shift to 6 a.m.-1 p.m. between July and September to conserve energy.
Tavanir will also sign contracts with farmers and industrialists, based on which the latter is obliged to shift consumption from on-peak to off-peak periods.
“If they [industries and farmers] fulfill their commitment, there will no blackouts this summer because consumption will fall by at least 5,000 MW hours,” Haeri said.
Network load is expected to reach 70,000 megawatts during peak hours this summer.
The number of electricity meters has reached 37 million.
A total of 123 thermal power plants are operational in Iran.
In thermal power generation, Iran is ninth in the world.
The waste heat from the gas turbine is sent to nearby steam turbines that also generate electricity.
“About 33 gas- and steam-powered units in thermal power stations have been synchronized with the national power grid since 2021,” he said.
“The new facilities have added 6,000 megawatts of power to the network to meet rising demand.”
Production Capacity
Projects are being developed to boost the country’s power production capacity by 15,000 MW over the next two years, the official said.
Haeri noted that Iran’s installed electricity generation capacity stands at 90 gigawatts, while actual production is near 60,000 MW.
The difference is due to power loss as well as the fact that power plants usually do not operate at full capacity because of several reasons, one of which is lack of water in dams that impact hydroelectric power production.
Referring to a memorandum of understanding signed last year between the Energy Ministry and the Ministry of Industries, Mining and Trade for the construction of a power plant by industries, he said, “Based on the deal, 1,400 MW from power plants will be generated by the summer peak season.”
According to the MoU, the construction of 24 power stations in 36 months by industries for generating 10,000 MW is on the agenda.
Industries account for 40% of Iran’s annual power consumption of 280 billion kilowatt hours.
If industries complete their power projects, the Energy Ministry guarantees that adequate power will be supplied to factories even during peak demand hours, regardless of households’ consumption level.
Haeri noted that about 850 MW are also expected from renewable power stations to become operational by the end of summer.
Currently, around 1,000 MW are derived from renewable sources, such as solar, wind, small-scale hydroelectric and waste-to-energy power plants and biomass factories.
In addition, about 290 MW of power plants with distributed generation system (small power plants with a capacity of under 25 MW) will be put into operation.
