Iran's Electricity Production on the Rise

Iran's Electricity Production on the RiseIran's Electricity Production on the Rise

According to a report released by the Energy Ministry, Iran's electricity production during the first four months of the current Iranian year (started March 21) stands at 98,000 gigawatts hours, which has increased by 3% compared to the corresponding period of last year. In the same period, Iran imported 439 GWh as well, which has increased 18% compared to the same period of last year.

Azerbaijan and Armenia supply electricity to Iran under a swap agreement.

During the above-mentioned period, thermal power plants' generation increased by 5% compared to the corresponding period of last year. Nonetheless, hydropower power plants' production has declined by 15% due to a dramatic drop in rainfall, Mehr News Agency reported.

Producing electricity in Iran needs an annual budget of $10 billion, half of which is spent on the current electricity generation and the rest on development plans, Seyyed Zaman Hosseini, managing director of Tehran Regional Electricity Company said Thursday.

According to the official, annual electricity sale is estimated to be around $4 billion, $1 billion of which are given to the Targeting Subsidies Organization to be given to people as part of Iran's energy subsidy reform, Fars News Agency reported.

"Generating each kilowatt hour of electricity costs 850 rials (about 0.03 cent) while it is being sold for 500 rials (about 0.016 cent).Therefore, judicious consumption is a high priority to avoid power cuts," he said. The electricity system in Iran (production, transmission and distribution) is centralized and owned by the government. However, the present government has been actively encouraging private companies and offering incentives to join the key sector, apparently with little success.

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.