Financial disputes between the Energy Ministry and the contractor of the first geothermal power plant in Meshgin Shahr, Ardebil Province, has brought the project to a standstill, the governor of the province said.
"More than $16 million has been spent so far on the venture. But the contractor has stopped work due to financial disagreements with the employer [Energy Ministry]," Akbar Samadi was quoted as saying by IRNA. He did not elaborate.
Eleven wells have been drilled on the site at a depth of 3,500 meters, of which seven are ready to become operational. Almost 80% of the equipment including turbines and generators have been purchased and delivered to the site.
The plant was expected to come on stream in 2016. The 55 megawatt plant is billed as the first geothermal power station in the Middle East.
The government official noted that drilling wells for the plant by the National Iranian Drilling Company showed Iran does not need foreign knowhow, including from Iceland, New Zealand and the Philippines, to undertake such operations.
Geothermal power plants use steam from reservoirs of hot water found hundreds of meters below the Earth's surface. The steam rotates a turbine that activates a generator that produces electricity.
According to Samadi, the station is located on the heights of the volcanic Sabalan Mountain in the geothermal-rich Ardebil region, which attracts millions of tourists every year for its famed hot springs, believed to have health benefits.
Unlike thermal units that burn fossil fuel and are singled out as harmful to the environment, geothermal plants produce less emissions.
According to the US Geothermal Energy Association , emission of carbon dioxide from geothermal power stations is less than 5% that of conventional coal-fired plants. Using geothermal also eliminates the mining, processing, and transportation required for electricity generation from fossil fuel.
As of 2015, worldwide geothermal power capacity amounted to 12.8 gigawatts, of which 28% or 3,548 megawatts are in the US.
Turkey, one of the leading countries in the region in the geothermal industry, is planning to more than quadruple its installed capacity to 2,500 MW by 2023 from the current 620 MW.
Iran's investments in other forms of energy, especially nuclear energy, over the past four decades were made at the expense of renewables, which accounts for 650MW of the total installed capacity at around 80 gigawatts.
