Energy Developers Ready to Ride Iranian Winds

Energy Developers Ready to Ride Iranian WindsEnergy Developers Ready to Ride Iranian Winds

Iran’s quest to rejuvenate its energy industry after decades of sanctions is attracting renewable energy developers eager to plant turbines on windy ridges across the country.

Since 2012, the government has pushed renewables as an alternative to fossil fuels that supply 94% of its electricity. Developers such as GI Umweltconsult and turbine suppliers like Nordex SE are preparing to enter the market, Bloomberg reported.

While Iran’s renewables industry is concentrated mainly on hydroelectricity plants, the government plans to bolster wind energy as a way of preserving crude oil for export and meet the electricity needs of its more than 80 million people.

With an ambition to install 5 gigawatts of renewable capacity by 2020, Iran would rank alongside France and the UK as an industry leader.

“Every kilowatt-hour of extra wind power allows them to export more oil, meaning more foreign currency,” Michael Tockuss, managing director of the German-Iranian Chamber of Commerce, said in an interview in Hamburg.

  Shifting Views

Umweltconsult, a renewable energy developer based in Berlin, is planning wind farms requiring an investment of $331 million in Iran starting next year, Shahnaz Horvath, co-head of the company, said in an interview.

“A decade ago, most Iranians still asked, ‘What do we need wind and solar energy for’,” said Horvath, before moving to Germany three decades ago. “Things have changed.”

Iran’s wind energy potential is estimated at more than 30,000 megawatts, Mohammad Saeid Hojjati, economic counselor at the Iranian Embassy in Berlin, said by email.

There is “huge potential” for electricity generation from different renewable sources, including wind and solar, he said.

Iran’s government set its renewable energy target in 2012 and has just 150 MW of clean power plants operating now. It adopted Germany’s feed-in-tariff model 10 years ago, granting developers a fixed price for electricity from renewables and recently boosted the payout for wind by 3.9% to 18 cents per kilowatt-hour.

“We haven’t had a lot of progress so far because of banking curbs,” said Mostafa Rabiei, head of international and promotional affairs at Iran’s Renewable Energy Organization, which is linked to the Energy Ministry. “We put in place regulations so the private sector is encouraged.”

  Capacity Boost

"With about 1,000 MW of new capacity planned a year, Iran’s onshore wind market may compare with France and the UK," said Oliver Kayser, spokesman for the German turbine maker Nordex SE.

The two European markets have contributed installation of about that much in most years for most of the last decade.

“Iran does have some high-wind locations, for example in the mountainous regions north of Tehran,” said David Hostert, an analyst for Bloomberg New Energy Finance in London.

Denmark’s Vestas Wind Systems A/S is eager to explore the Iranian market, said Michael Zarin, a company spokesman.

The biggest turbine maker has installed 37 of its machines in the country, most recently in 2004, according to its website.

"Banks may be willing to lend to Iran again, once payment systems are restored and sanctions are lifted," said Ludovic Subran, chief economist at Euler Hermes Group, the world’s biggest trade-credit insurer.