Renewable energy projects by the private sector should be encouraged by utilizing resources made available through cuts in fossil fuel supplies to power plants, a deputy energy minister said.
"While there is huge potential for solar and wind energy in Iran, renewable energy production in the past decades has been insignificant," Houshang Falahatian was quoted by IRNA as saying on Friday .
The costs avoided by savings in thermal power plants' fuel consumption can be channeled to private firms willing to carry out renewable energy projects, he added. "If the costs associated with fossil fuel supplies to power plants plus environmental costs were injected into private renewable energy production, a renewable economy will emerge and byh extension help check the environmental degradation."
Natural gas is the largest source of fuel for power generation in Iran, accounting for almost 70% of total output. Oil, hydropower, coal, and non-hydro renewables make up the other fuel sources used to generate electricity, with marginal generation from the Bushehr nuclear power plant that came online in 2011 but did not start commercial production until 2013. Although fossil fuels, including coal, oil and natural gas, are still the world’s primary energy sources, their utilization is gradually receding. Share of renewables in Iran's total energy output now stands at a meager 0.5%, but is expected to reach 5% within four years. Iran needs to generate 5,000 megawatts of renewable energy by 2015 as stipulated in the Fifth Five-Year Economic Development Plan (2011-16).
Laws to encourage domestic and foreign investment in renewable energy have been passed recently and the government has also announced incentives to push forward its renewable agenda.
