Tehran Regional Electricity Company has planned to hold a tender to develop 167 substations in the capital city, the head of the company said on Monday.
"The international tender that will be issued soon is aimed at selecting qualified local and foreign contractors to boost the metropolitan's power infrastructure," Gholamreza Khoshkholq was also quoted as saying by Mehr News Agency on Monday.
The official noted that as per the law, contractors are obliged to procure 80% of their equipment from domestic manufacturers, so the more they purchase local products, the bigger their chances of winning the tender.
According to Khoshkholq, the plan is part of a bigger scheme to establish 312 substations across Tehran, of which 135 projects have been commissioned through tenders.
Two tenders have already been finalized for the construction of 67 and 68 substations. During the first round, an unnamed Chinese contractor, along with an Iranian partner, won the tender.
The second tender has also gone to another Chinese bidder, which is obliged to work along with a domestic contractor.
The official noted that all the permissions have been issued and the projects await banks to open letters of credit.
Referring to priorities of his company in the current year, Khoshkholq said, "Some 90 projects worth 8 trillion rials ($66.7 million) have been planned to support the province's electricity network."
This is while Tehran's annual budget for the power sector amounts to 15 trillion rials ($125 million).
The official said such plans will help curb outages not only in the capital city, but also in cities on the outskirts.
Aging Infrastructure
Khoshkholq noted that devising plans for the renovation of power grid is high on the agenda.
"Half of electricity network installations in Tehran, Alborz and Qom provinces are over 20 years old, raising the vulnerability of the grid," he said.
“About 20% of the national power grid’s generation and transmission facilities and 25% of the country’s subscribers, numbering about 18 million people residing in the three provinces, are covered by Tehran Regional Electricity Company.”
Khoshkholq added that aging facilities put the grid’s sustainability at risk, which will be addressed by implementing an optimization plan.
He further said the company’s power consumption peaked on July 22, reaching 10,182 megawatts that is 0.9% higher than the last fiscal’s peak consumption.
“We predicted that peak demand would hit 10,600 MW in the current fiscal [started March 21], but the company managed to reduce more than 400 megawatts from the power load by taking management measures,” he said.
He noted that several small-scale power plants have so far been launched by Tehran Regional Electricity Company, the purchase of output of which has been guaranteed by the administration for five years. The official stressed that based on current tariffs, the Energy Ministry purchases each kilowatt-hour of the small-scale power plants’ output at 1,000 rials (2.3 cents), while the same amount of electricity is priced at 700 rials (1.6 cents) when supplied to subscribers.
"The tariff is being reviewed, as it should be set not only to return the investment of power producers, but also to enable the ministry pay the subsidy it provides to support private investors," he said.
To reduce domestic consumption, Khoshkholq urged the need for cutting electricity subsidy and raising awareness about judicious consumption.
