Banking problems to open a letter of credit for the construction of a 1,400-megawatt thermal power plant in southern Hormozgan Province have been resolved, the managing director of Iran’s Thermal Power Plants Holding Company said.
“The L/C is projected to be opened soon,” Mohsen Tarztalab was also quoted as saying by Mehr News Agency on Saturday.
Based on a deal signed in mid-December 2016, the Russian company Tekhnopromexport and TPPHC will jointly construct the thermal power plant.
According to Tarztalab, the whole project is valued at €1.5 billion and the Russian side is obliged to invest €1.2 billion.
The plant, developed on 199 hectares in Sirik in southwest Hormozgan, is equipped with ultra-supercritical boilers, meaning it will operate at around 45% efficiency by using higher boiler pressures and burning coal at higher temperatures.
It will include four sets of 350-MW generators and produce 1.4 GW/hour of electricity a year once it becomes operational.
The Russian side will also build a gas insulated substation (GIS) to connect to the plant in cooperation with domestic manufactures and contractors.
GIS is a high voltage substation in which the major structures are contained in a sealed environment with sulfur hexafluoride gas as the insulating medium.
"In February 2017, Russia and Iran started the plant's construction that is expected to take about five years," Tarztalab said.
Supplementary Agreement
Earlier in May, the Russian and Iranian sides signed a supplementary agreement to guarantee the project.
Iranian energy officials are seeking foreign investment to build new power plants and increase the efficiency of existing ones.
In late 2017, TPPH announced that the country was in talks with foreign firms to conclude investment deals worth $6 billion.
Around 65,000 MW, or 80% of Iran's 800,000-MW output, are generated from thermal plants that burn fossil fuels. In addition, 12,000 MW are derived from hydroelectric plants and 1,000 MW from the Bushehr Nuclear Power Plant.
Besides constructing new power plants, the government is pushing measures to convert conventional plants into efficient combined-cycle units that use both gas and steam turbines to produce up to 50% more electricity. Iran needs the new capacity to shore up domestic power supply and increase electricity exchange with neighbors as part of a scheme to establish a regional power network.
Pointing to an all-time peak power demand of 58,000 MW registered in July, up from about 54,000 MW in the fiscal 2017-18, Tarztalab said the new supply capacity is expected to help the Energy Ministry avoid periodic outages during the hot summer when demand peaks for cooling homes and businesses.
Electricity Demand
The ministry has forecast electricity demand to exceed 58,000 MW next summer, based on this year's consumption.
According to Tarztalab, by the end of the Sixth Five-Year Development Plan (2017-22), total power generation capacity should increase by 26,000 MW, of which 19,000 MW should come from thermal power.
Iran has decided to phase out inefficient power plants, improve the aging electricity infrastructure and adopt modern power production technology simultaneously.
"Under regulations outlined by the Energy Ministry, all new power plant units must have efficiency of 58% and above," Tarztalab said.
Almost 80% of domestic electricity demand are met by aging thermal plants that have been operating for decades.
Despite heavy reliance on hydrocarbons, the country is also taking measures to raise the share of renewables by 1,000 MW per year from about 640 MW at present.
