Private Sector Can Boost Electricity Export

Private Sector Can Boost Electricity Export Private Sector Can Boost Electricity Export

Energy export market will boom further on condition that private sector plays a more substantial role in this regard, director general of the Energy Ministry's Office for Developing Export of Technical and Engineering Services said on Sunday.

Bahram Nezamolmolki is of the opinion that power industry cannot progress unless private sector breaks the monopoly of electricity export.

"The Energy Ministry should pave the way for the presence of private enterprises to play a major role in this field," IRNA quoted him as saying.

Referring to the directive issued by the Energy Ministry in 2014, the official pointed out that private firms, which build a power plant, are allowed to export 50% of the generated power. According to Nezamolmolki, such a directive can definitely encourage investors to put money into power projects.

"There are 40 water and wastewater as well as 45 electricity projects undertaken overseas by Iranian firms at an estimated cost of $6.6 billion," the official noted.

On the critical issue of electricity export, the official said, "Iran Power Generation, Transmission & Distribution Management Company—aka Tavanir—is in charge of purchasing electricity from power plants. Furthermore, private enterprises are bound to sell the generated electricity to Tavanir."

Underlining the fact that the company is responsible for electricity export, Nezamolmolki said, "Due to financial constraints and infrastructural shortages, the private sector is not engaged in power export, which explains why they do not show any interest in investing in this sector."

 The private sector is of the opinion that producing and supplying electricity in Iran are not a very attractive venture due largely to the "low prices"' and the government subsidies to consumers. Generating each kilowatt-hour of given electricity costs 680 rials (about 0.027 cents) while it is being sold for 430 rials (about 0.017 cents).

  Electricity Exports Cut

Experts opine that to avoid power outages and maintain the stability of power grid, the production capacity of power plants ought to be 30% more than electricity demand of the country. If so, even during the peak demand for electricity, there is no need to curb export.

However, due to hot summer days, power consumption has peaked at 50,000 megawatts in Iran because of which the Energy Ministry intends not only to reduce export to neighboring states, including Turkey, Pakistan and Iraq, but also to increase import from Armenia, Azerbaijan and Turkmenistan.

"The total power generation capacity from hydroelectric dams stands at 15,000 MW. Nonetheless, it is dwindling because of the dramatic decline in rain drop," Gholamreza Khoshkholq, a Tavanir official, said.

Danesh Madani, Tehran Regional Electricity Distribution ex-deputy, said on Sunday, "There are a couple of strategies to avoid blackouts, the best of which is to eliminate power subsidies."

According to the official, unsubsidized electricity is likely to decrease consumption by half, which is effective in addressing both the current shortage and rising future demand.

"Private investors have had a significant role in development of the power industry," Khoshkholq, a Tavanir official, said.

"Construction of small-scale power plants is one of the most appropriate means of investment for the private sector, as there are no Chinese competitors in the sector and the government supports private enterprise."