Electricity Import From Azerbaijan Proposed

Electricity Import From Azerbaijan Proposed  Electricity Import From Azerbaijan Proposed

Iran has put forward an official proposal to import 500 megawatts (MW) of electricity from Azerbaijan in summer to compensate possible electricity shortages, a deputy energy minister said Saturday.

There will be no power outage in the summer if power consumption is managed to stand at 50,000-51,000 MW, Houshang Falahatian was quoted by Fars news agency as saying. However, power supply might be disrupted if consumption surpasses 52,000 MW, he noted.      

While power outage is averaged 10 minutes per annum for every subscriber in developed countries, the figure is 2 minutes per day or more than 700 minutes per annum in Iran.

According to official estimates, electricity production and consumption balance will face a 3,000 MW shortfall in the summer. Therefore, Iran is considering electricity imports from neighboring Azerbaijan to avert potential outages.

“We hope to reach an agreement with Azerbaijan to import 500 MW of electricity during summer,” said the official.

A 10 percent reduction in electricity consumption would cut government expenditures on construction of power plants by 200 trillion rials ($7.5 billion). “Around $7.5 billion, which equals the country’s entire construction budget, would have been saved if power consumption were reduced by 20 percent in power plants alone,” Falahatian stated.

The status quo in Iraq, namely chaos caused by the Islamic State, has cut Iran’s power exports by as much as 10 percent, the official noted.  Around 4,000-5,000 MW power plants are constructed by the energy ministry each year to meet the increasing demand, which is estimated to grow eight percent annually. Current power plants’ capacity suffices to meet demand should subscribers reduce consumption by 10 percent.

A recent report from the Business Monitor International said that Iran is capable of meeting its own power demand, but is distant from achieving energy export ambitions.

Iran generated 223.56 terawatt-hours (TWh) of electricity in 2014. The figure exceeds power consumption of 185.41 TWh by 20.5 percent. The excess power production is set to continue over the medium-term, with consumption forecast to climb to 215.97 TWh in 2020. This will then be met by supply, which is expected to increase to reach 284 TWh.

Iran’s electricity industry ranks 14th in the world and first in the Middle East in terms of power generation with an installed power generation capacity of 72,000 MW.

The country is the largest exporter and importer of electricity in the Middle East and exports electric power to Armenia, Pakistan, Turkey, Iraq, and Afghanistan. Azerbaijan and Armenia supply electricity to Iran under a swap agreement.

“It is absolutely wrong to think we can achieve economic growth without having sufficient electricity production,” Energy Minister Hamid Chitchian warned recently. “The electricity sector has weakened over the past five years and investment has dramatically decreased.”

The energy ministry says the power network requires at least 120 trillion rials ($4.4b) of investment.