National Power Grid Capacity to Increase

In line with efforts to expand electricity output capacity, the Thermal Power Plants Holding Company has signed three preliminary deals to build new thermal power plants that will add 8,400 megawatts to the country's total electricity production capacity by 2023, the company's deputy for planning said.

"The preliminary deals, worth about $6 billion, have been concluded since early 2016, when sanctions against Tehran were lifted," Hamidreza Azimi was also quoted as saying by IRNA on Monday.

Giving a breakdown, Azimi said the first project, worth $2.9 billion, is being undertaken with the help of Iran's top engineering and energy enterprise MAPNA Group and its foreign partners. The venture entails the construction of a 5,000-MW power station whose first phase will go on stream in Bandar Abbas, a southern port city in Hormozgan Province, by 2019.

According to the official, 85% of the total cost will be financed by MAPNA's business partners.

Pointing to the second business enterprise, he noted that Turkish energy company Unit International signed a preliminary agreement with the Energy Ministry, worth $1.4 billion, to build two combined-cycle power plants with 2,000 MW in capacity.

The Turkish firm will build a 1,200-MW plant in Saveh, 100 kilometers southwest of Tehran, and an 800-MW plant in Zahedan.

Unit International will be authorized to develop similar power plans, should it perform well in Saveh and Zahedan projects.

Commenting on the third agreement signed between TPPHC and Russia’s Technopromexport, worth $1.7 billion, Azimi added that operations to build a 1,400-MW thermal power plant in Sirik County, Hormozgan Province, has started and will become operational in 2023.

"The Russian firm will pay 85% of the costs and the rest will come from Iran's Bank of Industry and Mine," he added.

On plans to boost Rey Power Plant's efficiency to 60% from 23%, the official noted that technical talks are underway with Japanese firms to rehabilitate the dilapidated power station located in southern Tehran in two phases and much-needed licenses to attract foreign investment have already been issued.

Moreover, negotiations to conclude a $6.7 billion contract with Shanghai Electric Group to build a 650-MW power station near the city of Tabas in South Khorasan Province is on TPPHC's agenda and as soon as the deal is finalized, licenses will be issued.

----- TPPHC's Key Role

Pointing to TPPHC's key role in meeting the country's power demand in 2016, Azimi noted that 91.8% of Iran's electricity needs were met by thermal power plants.

"Combined-cycle power plants, playing the leading role, accounted for 35.9% of total production in 2016, generating 103.9 billion kilowatt-hours of electricity," he said, noting that gas-powered plants as well as steam-powered ones produced 76.7 billion kWh and 85 billion kWh respectively.  

According to the official, total electricity production capacity stands at 77,000 MW, over 62,000 MW of which are generated by thermal power plants operated by TPPHC.

Azimi noted that out of the 62,000 MW, steam-powered power plants, gas-powered stations and combined-cycle plants generate 15,829 MW, 27,258 MW and 19,470 MW respectively.

"Hydropower plants (12,000 MW), Bushehr nuclear plant (1,000 MW) in southern Iran, distributed generation stations (1,500 MW) and renewables (less than 500 MW) constitute the rest of the installed capacity," he said.