Gov’t Increases Electricity Purchase Tariffs

Gov’t Increases Electricity Purchase Tariffs Gov’t Increases Electricity Purchase Tariffs

New tariffs have been approved for electricity purchases from private homeowners by the government, managing director of Tehran Electricity Distribution Company said.

"The increase in tariffs is aimed at encouraging household consumers to invest in installation of small-scale solar power plants," Seyyed Ali Barband was quoted as saying by Mehr News Agency.

According to the recent bylaw, the price at which government purchases 10 megawatt, 100 kW and 20 kW of electricity from household solar power plants is now 6,750 rials ($0.20), 8,730 rials ($0.26) and 9,770 rials ($0.29) per kilowatt hour, respectively.

The new regulation allows for purchase of electricity from small-scale hydroelectric power plants with a power generation capacity of 10 MW at a rate of 3,700 rials per kWh.  

"The government is also planning to promote distributed generation via small-scale power plants," he said.

"More than 28 MW of electricity were produced through small-scale DG power plants in Tehran Province last year (ended March 20, 2015)."

So far, 300 permits have been issued for the construction of small-scale DG power plants in Tehran, with the government guaranteeing purchase of electricity for 20 years.

Conventional power stations, such as coal-fired, gas- and nuclear-powered plants, as well as hydroelectric dams and large-scale solar power stations, are centralized and often require electricity to be transmitted over long distances.  By contrast, distributed energy resources systems are decentralized, modular and more flexible. They are located close to the load they serve, albeit having capacities of only 10 MW or less.

  67 Electricity Projects

A total of 67 electricity projects, at a cost of 2,180 billion rials ($65.3 million), will be carried out in Tehran by the yearend (March 19, 2016), managing director of Tehran Regional Electricity Company said.

"A majority of the projects went on stream before the peak demand, which occurred on July 11, at 8,989 megawatts," Seyyed Zaman Hosseini was quoted as saying by IRNA.

This year's peak demand showed an increase of 0.03% compared with last year's peak demand of 8,962 MW that occurred on August 11, 2014. There are also plans for implementation of 47 projects in the next Iranian year, the total cost of which is estimated at 5,570 million rials ($166.7 million).

An area of 13,670 kilometers in Tehran is covered by TREC, supplying power to 13.136 million people, Rasoul Qesnat, TREC's deputy development manager, said on Monday.

Iran's electricity production during the first four months of the current Iranian year 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 by 18% compared to the same period of last year.

"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," Hosseini said.

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

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 state subsidies.