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Electricity Export Potential at $15b

Electricity Export Potential at $15bElectricity Export Potential at $15b

Despite Iran's $15 billion electricity export potential in the form of commodities and services, export of electricity has declined, head of the board of directors at Iran's Electrical Industry Syndicate said.

"Iran currently exports electricity to Iraq, Pakistan and Afghanistan, among which only Iraq imports Iranian commodities and services," Alireza Kolahi was quoted as saying by ISNA.

Re-stabilization of hard currency rates against domestic inflation, Iraq's internal problems and budget deficit due to lower oil prices are among reasons causing a decline in electricity exports over the past years.

"Iran's main competitors in the region are Saudi Arabia and Turkey, where interest rate for export of electricity is almost zero," Kolahi said.

"More than 80% of the country's total exports of technical services in the last Iranian year (ended March 20) belonged to the electricity sector."

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.  Private sector’s participation in energy projects has been affected by a lack of guarantee for the return of money invested in infrastructure and power plant projects. The private sector is of the opinion that producing and supplying electricity in Iran is not a very attractive venture due largely to its low prices and government subsidies to consumers.

Iran’s electricity industry ranks 14th in the world and first in the Middle East in terms of power generation with an installed power generation capacity of 72,000 megawatts.

Financialtribune.com