Iran’s manufacturing sector is once again bracing for winter electricity shortages, despite repeated official assurances that supply will remain stable.
After months of summer outages that disrupted production, reports from industrial estates suggest that winter blackouts may soon resume—turning what was once an exception into an annual pattern.
The uncertainty has revived long-standing concerns about energy imbalance, insufficient infrastructure investment and inconsistent policymaking, all of which impose rising costs on producers and ultimately consumers.
Industrial power outages already persist as a structural challenge. From early May to mid-October, most industrial estates faced scheduled cuts ranging from two full workdays per week to additional evening-hour shutoffs.
According to the Small Industries and Industrial Parks Organization (ISIPO), these interruptions raise production costs by nearly 10 percent—and since many factories operate on tight margins, the resulting supply shortages feed directly into higher consumer prices.
Government officials, including the ministers of industry and energy, have emphasized that production should be the last sector exposed to outages. The President has also stressed that industry must remain operational throughout the winter.
Yet manufacturers insist that experience—not official statements—guides their expectations. They note that similar assurances were issued last year, only for blackouts to return when temperatures dropped below zero. The absence of a clear, written guarantee fuels mistrust and complicates production planning.
Escalating Costs
Industrial representatives argue that electricity cuts have intensified over the past five years, both in frequency and duration.
Beyond lost output, sudden shutoffs damage machinery, spoil raw materials and disrupt supply chains. Diesel generators, the primary fallback option, are costly and not engineered for continuous heavy loads. Fuel procurement itself has become a new burden: diesel that costs 300 tomans per liter in subsidized channels (about $0.003) may reach 15,000–25,000 tomans on the open market (roughly $0.13–$0.22). Some producers even report facing accusations of fuel smuggling when purchasing legally unavailable fuel.
These operational disruptions translate into meaningful macroeconomic consequences. Factories losing 36 hours of electricity per week effectively forfeit the equivalent of 12 working days each month.
This supply shortage contributed to sharp cost increases across several value chains. For example, paper prices climbed from 24,000–25,000 tomans per kilogram (about $0.21–$0.22) to around 40,000 tomans ($0.35). Similar patterns have been observed in food processing, apparel and home appliances.
Infrastructure shortcomings compound the challenge. In several major industrial estates, producers claim that the Ministry of Energy sold more electrical capacity than existing infrastructure can support. As a result, even factories operating within their contracted consumption levels are penalized for “exceeding capacity.” Additional usage is billed at green-energy rates—far higher than standard tariffs.
Solar power, sometimes proposed as a long-term solution, is viewed by manufacturers as impractical. Generating one megawatt of solar power requires at least 1.2 hectares of land, far beyond the capacity of most factories.
Moreover, electricity must be transmitted through the national grid before it can be retrieved, making it neither scalable nor truly self-sufficient.
With winter approaching, industry leaders warn that unless the Ministry of Energy provides a transparent, formal statement guaranteeing uninterrupted supply—and addresses structural infrastructure gaps—manufacturers will continue preparing for the worst: overhauling generators, stockpiling fuel and absorbing new layers of cost.
Without credible reforms, the cycle of shortages, rising production costs and consumer price inflation is likely to intensify—placing additional pressure on an already strained industrial economy.
