Gas-to-Power Option Ignored in Electricity Export

Gas-to-Power Option Ignored in Electricity Export Gas-to-Power Option Ignored in Electricity Export

Iran and some of its neighbors, including Turkmenistan and Russia, are in a tough competition for a bigger share of the global gas market. According to a new report, the issue of converting natural gas to electricity and its export is among the options that first attracted attention from Iran and its northern neighbors but remains undecided.

Last year, Iran imported 3,718 million kilowatt-hours (KWh) of electricity, 67 percent of which comes from Turkmenistan. Back in December 2008, members of the Economic Cooperation Organization (ECO), including all Central Asian countries, Iran, Afghanistan, Pakistan, Turkey and Azerbaijan agreed to hold talks on converting some of their gas to power. The agreement was part of a larger plan to establish a regional power network for exporting power to Iraq, Europe and Syria.

But according to analysis by ISNA, the issue was forgotten later. Now, Iran and Turkmenistan are working separately to increase their power production. Last year, Turkmenistan increased its electricity production by about 12 percent. The country exports 2.8 billion KWh of electricity but based on a long-term plan, Ashgabat plans to establish 14 new power plants to raise its electricity production to 27.4 billion KWh.

Iran, which exports annually about 12 billion KWh of electricity, is now planning to allocate further 6 bcm/a of its gas to new power plants by 2018 to increase its power export by additional 5,000 MW. Iran is now producing equivalent of about 263 billion KWh electricity. On the other hand, Azerbaijan is exporting more than 2 billion KWh. But since Iraq and Turkey account for 68 and 20 percent of Iran’s electric power export respectively, the idea of establishing a regional network for exporting Azerbaijan’s power to these countries via Iran seems very promising.

Iran’s eastern neighbors, Afghanistan and Pakistan, account for about 10 percent of Iran’s electricity exports. So, Turkmenistan can gain a greater share in these markets via Iran. For the time being, Ashgabat is exporting about 250 MW power to Afghanistan.

The report concludes that Iran can play the role of central power distributor in the region. 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) in new investments.