Energy Minister Hamid Chitchian said the country's electricity industry needs an annual investment of $2 billion .
"The industry needs and welcomes foreign direct investment," Chitchian was quoted as saying by Shana on the second day of the Iranian Petroleum and Energy Club Congress and Exhibition in Tehran.
Noting that Iran's electricity industry enjoys a vast and diverse market that could be revolutionized by new investments, Chitchian said incentives will also be granted to support investors.
Deputy Energy Minister Houshang Falahatian had earlier mentioned that if every 1,000 MW costs an estimated $500 million, Iran will need some $15 billion in foreign investments only to expand the electricity output of thermal plants.
Falahatian stressed the necessity of adding 35,000 megawatts of power generation capacity to the country's already installed capacity of 74,000 MW.
Iran needs to generate 5,000 MW of renewable energies by 2015 as stipulated in the Fifth Five-Year Economic Development Plan (2011-16). Currently, clean energy production capacity stands at 260 MW, with 300 million kWh of electricity being produced through renewables.
The ministry aims to keep the quality and efficiently of power plants above 58% and has devised a certain number of programs to optimize output.
It is also a firm supporter of renewable power generation. One of the plans topping the ministry's agenda is electricity generation near consumption sources, or what is known as microgeneration, where owners can sell the excess amount of generated electricity.
Depending on the type of technology incorporated or the capacity of the power plants, the ministry pays less than a cent (2,500 rials) to 2 cents (9,750 rials) in guaranteed purchase of each kilowatt of energy from renewable sources.
Small-scale plants do not require large amounts of funding or working capital, but enjoy a large market demand. Proximity to end-user resulting in potentially fewer transmission losses and energy waste is another merit of such plants.
The ministry also supports simultaneous production of high-quality water and electricity.
"Iran has the capacity to use the heat wasted in thermal plants of coastal regions to produce one billion cubic meters of freshwater," the energy minister said, predicting that the water and electricity sectors will attract $30 billion in foreign investments once the sanctions against Iran are lifted.
Iran plans to increase power production capacity from combined-cycle power plants by 8,000 megawatts in the foreseeable future and about 10% of the country's total electricity is produced by thermal units.
Iran’s electricity industry ranks 14th in the world and first in the Middle East in terms of electricity generation. It is the largest exporter and importer of electricity in the Middle East and exports electricity to Armenia, Pakistan, Turkey, Iraq and Afghanistan.
