Talks with Europeans on Renewables

Talks with Europeans on Renewables
Talks with Europeans on Renewables

Negotiations with several European companies have been held to attract investments in Iranian wind and solar projects, Renewable Energy Organization of Iran (SUNA)'s managing director said.

Companies from Germany, Spain, Portugal, and Italy have expressed readiness to invest in construction of wind and solar energy power plants, Mehr news agency reported. Negotiations are currently focused on sites and economic feasibility.

Together with Iranian authorities, European investors are assessing sites in order select geographically suitable locations, Yousef Armoudeli said.

"Introducing these companies to private Iranian investors to establish joint ventures for power projects was also one of the matters discussed." Armoudeli said, expressing optimism that with ongoing negotiations between Iran and the P5+1, major renewable energy projects will be undertaken by foreign companies.

The government has pledged to protect foreign investment in power projects. Moreover, the electricity generated through such renewable plants could be exported.

In addition to European companies, some Chinese companies have also discussed terms to launch a wind turbine production line, and construct wind power plants.

Distinctive facilities are provided by the energy ministry to guarantee purchase of electricity that is generated from renewable resources. The electricity is purchased 17 cents per very kilowatt hour (kWh), which is 10 times higher than the price at which the ministry sells its electricity to subscribers.

The price formula for the guaranteed purchase, which is set for a minimum of five years, is annually determined taking into account the changes in hard currency and inflation rates.

  Special Renewable Energy Zone

On the ministry's plan to develop a renewable energy zone, Houshang Falahatian, deputy energy minister, said that Khaf region in northeastern Iran is appropriate for installing wind turbines, adding that the private sector has been given the green light for the project.

Productivity rate from wind turbines in Khaf would be above 50 percent, which makes their installation highly economical. "We have urged businesses to invest in Khaf renewable zone, and in other potential regions," Falahatian said. Negotiations have been held with the National Development Fund of Iran (NDFI) and banks to provide financial facilities, he added.

 It is anticipated that at least 200 MW new wind power plants is established in Khaf from the end of the current calendar year (March 2015) up to the end of next year.

Currently, clean energy production capacity stands at 260 MW, with 300 million kWh of electricity being produced through renewables. The figure is projected to reach 400 MW by March.

As stipulated in the Fifth Five-Year Economic Development Plan (2011-16), the government hopes to produce 5,000 megawatts from renewable resources within two years and plans to target rural communities who have been largely cut off from government services.  Laws and incentives to encourage domestic and foreign investment in renewable energy projects in the country have been recently passed.