Iran’s electricity industry has undergone significant quantitative expansion over the past four decades, according to officials from the country’s power sector, even as the industry continues to face structural imbalances and mounting pressure from rising demand, aging infrastructure and investment constraints.
Speaking about the long-term performance of the electricity sector, Mostafa Rajabi Mashhadi, spokesperson for Iran’s power industry and CEO of Management of Generation, Transmission and Distribution of Electric Power in Iran (Tavanir), said that over the past 45 years the sector has not only kept pace with rapid growth in electricity demand, but has also expanded its installed capacity (90,000 megawatts) and technological capabilities, ILNA reported.
According to Rajabi Mashhadi, Iran’s power generation capacity and electricity output have grown as fast as the global average over the past four decades.
However, analysts note that capacity growth alone does not fully reflect the sector’s operational challenges, particularly the growing gap between peak demand and reliable supply, fuel constraints, and the limited pace of investment in modern, high-efficiency power plants.
Managing Demand Under Growing Pressure
Rajabi Mashhadi pointed to demand-side management as a key focus in the current year. At the beginning of the Iranian year 1404 (March 2025), electricity demand was expected to rise by around six percent. According to Tavanir, extensive consumption management measures altered this trajectory, resulting not only in the prevention of demand growth but in an estimated three percent reduction in peak load.
In total, the company said actual electricity demand was 9% lower than the initially projected trend, a development officials described as unprecedented in the country’s power sector.
These measures, however, largely reflect short-term interventions rather than structural demand reform and their sustainability remains uncertain as economic activity and population growth continue.
Outlook for 1405: Stabilizing Peak Consumption
Looking ahead, the power industry has set a target of stabilizing peak electricity demand at around 78,000 megawatts in the year 1405 (Match 2026-March 2027).
According to the official, this objective is being pursued through a combination of renewable energy development, expanded deployment of smart meters, efficiency upgrades to cooling systems and the continuation of consumption management programs.
While these initiatives align with global trends in demand management, experts caution that meaningful reductions in imbalance will depend on long-term investment, tariff reform and improvements in energy efficiency across industrial and residential sectors.
Grid Stability and Digitalization
Tavanir’s CEO highlighted grid stability as one of the sector’s key operational achievements, stating that Iran’s national electricity network has not experienced a nationwide blackout since 2003.
He noted that this record stands in contrast to recent large-scale blackouts reported in countries such as Spain, Portugal, India, Pakistan, and Bangladesh.
At the same time, grid resilience in Iran has relied heavily on operational controls and load shedding at local levels, particularly during peak summer months, rather than surplus capacity.
Rajabi Mashhadi also emphasized progress in digital infrastructure, including the launch of the country’s first national electricity consumption monitoring and control center and the installation of more than two million smart meters.
According to Tavanir, this represents a record pace of deployment and has been accompanied by the activation of over two million consumption limiters for high-usage customers.
The creation of a large-scale data platform containing more than 1,100 billion consumption records has enabled more detailed analysis of electricity use, detection of abnormal loads, and identification of unauthorized cryptocurrency mining, an issue that has placed additional strain on the grid in recent years.
Technological Developments and Infrastructure
On the technology front, officials cited several domestically developed projects, including the localization of high-capacity power transmission conductors, the tripling of electricity transfer capacity to Qeshm Island, and the construction of a 500-megawatt ampere integrated transformer, described as the largest of its kind produced in Iran. New generations of low-loss transformers have also entered production, according to Tavanir.
In parallel, the electricity sector has expanded its fiber-optic network to approximately 38,000 kilometers, making it the country’s second-largest fiber network after telecommunications infrastructure.
Renewables and Efficiency: A Gradual Transition
Renewable energy remains a stated priority for the sector’s future, though its share in Iran’s electricity mix remains limited.
Rajabi Mashhadi pointed to the construction of a 2.5 MW wind turbine as a first-of-its-kind domestic project, alongside the commissioning of the 50 MW Mil Nader wind power plant in Sistan and Baluchestan province.
Other initiatives include the development of the domestically produced MGT-75 advanced gas turbine and plans to accelerate renewable capacity expansion through to the end of 1405.
While these projects signal gradual progress, renewable deployment continues to lag behind Iran’s technical potential and regional benchmarks, constrained by financing challenges and regulatory uncertainty.
Overall, while official figures highlight decades of expansion in Iran’s electricity sector, the industry continues to operate under tight margins, facing the dual challenge of sustaining supply reliability while adapting to structural imbalances, efficiency gaps and the need for deeper reform.
