Energy Services Export Set to Increase

Energy Services Export Set to IncreaseEnergy Services Export Set to Increase

The implementation of the Joint Comprehensive Plan of Action, the formal name of the July 14 nuclear deal between Iran and major powers, will help Iran increase the export of its water and electricity technical and engineering services to more than 40 countries, a deputy energy minister said on Wednesday.

Speaking on the sidelines of the 16th Energy Globe Awards held in Tehran from January 18th to 21st, Alireza Daemi added that JCPOA implementation will help increase engineering and technical exports, especially in water and electricity sectors, IRNA reported.

According to the official, Iranian skilled workforce is competent and can play a key role in undertaking international projects.

Pointing to strategies to optimize energy use in the country, Daemi added that Iran has a comparative advantage in terms of its young educated population.

"Iran's energy services are being exported to more than 40 states and it can definitely experience a surge in the post-sanctions era," he said.

Houshang Falahatian, a deputy energy minister, was earlier quoted by the news agency as saying that Iran's technical and engineering services' export is worth $3 billion per annum, of which $700 million are generated by the electricity industry.

Iran’s technical and engineering services' companies are going through a period of waning domestic demand and grappling with liquidity shortages. Furthermore, attacks by the self-styled IS militant group in Iraq—the largest export destination for Iran’s services' exports and the consequent economic implications—have limited the activities of Iranian engineering companies in Iraq, Tejarat-e-Farda reported.

According to Mohammad Reza Ansari, the head of the Association of Iranian Exporters of Technical and Engineering Services, the prospective lifting of western sanctions imposed on Iran over its nuclear energy program can create a “golden opportunity” for Iran’s technical and engineering services sector to find new export markets and shine overseas.

The removal of sanctions is expected to ease financial transactions and help Iranian service providers implement international projects.

Ansari says unlike oil or mineral commodities, services never run out and in fact grow in quality and quantity over time.

  Power Generation Vision

"Electricity wastage in the country has decreased from 14.8% to less than 11% in the last 18 months," Daemi said, noting that boosting efficiency in power production, transmission and distribution play a key role in optimizing the use of energy, which cannot be realized unless dilapidated power plants are reconstructed.

A gas power plant's conversion into combined-cycle can considerably enhance energy efficiency.

The official believes that economic incentives to generate energy from renewable resources such as the sun and wind can also help improve efficiency.

"Plans have been made to ramp up renewable energy production capacity from the current 500 megawatts to 5,000 MW," Sattar Mahmoudi, the acting energy minister said, noting that fossil fuel is like a double-edged sword, which will inflict irreversible harms to the earth in case it is not utilized wisely.

Placing high priority on optimizing use of energy, Mahmoudi added, "Energy Ministry is committed to produce at least 7,500 MW from renewable power plants by 2030, of which 6,000 MW will be realized by the end of the sixth five-year development plan (2016-21)."

The guaranteed purchase of electric output from solar panels and providing 50% of purchase and installation expenses are the Energy Ministry's incentives to promote construction of renewable power plants.