The cost of producing renewable energy in Iran, similar to many other parts in the world, has declined 2.5 times in two years, deputy energy minister, Seyed Muhammad Sadeqzadeh, said Sunday.
Production of one megawatt of solar energy in Iran cost $1.5 million in 2016, but it has declined to $600,000 at present, the ministry website reported.
Lower costs have encouraged private companies to increase investment in the solar sector and as a result the share of renewables in the domestic energy mix has increased from 0.2% of total installed power generation two years ago to about 1% now.
More than 80% of the electricity needs are supplied by thermal power plants while renewables account for 670 megawatts. The share of renewable power is expected to reach 5% by 2022, Sadeqzadeh, head of the ministry’s Renewable Energy and Energy Efficiency Organization (aka SATBA), said.
Globally there are three key enablers -- price and performance parity, grid integration and technology -- that allow renewable energy sources (notably solar and wind) to compete with conventional sources on price while matching their performance, according to a report from the International Renewable Energy Agency.
Another factor that has helped renewables grow faster in Iran is indigenizing the production of related equipment.
“Close to 85% of the equipment, including photovoltaic panels, cables and transformers, are now manufactured by domestic companies,” the official said.
Iran imported machinery and equipment from Germany, France, Spain, China, South Korea, Cyprus and the UAE in the past. Now five PV panel manufacturing companies are active in five cities.
Referring to the launch of Iran’s largest solar panel manufacturing company in Shiraz, Fars Province, last year, Sadeqzadeh said, “PV panel output is good for the production of 210 MW annually. Thanks to the robust domestic and regional markets, panel production is increasing substantially.”
During the hot season when there is need for extra power, electricity generated by solar farms will be purchased at 9,000 rials (9 cents) per kilowatt-hour
Paying More in Summer
To reduce investment risks in the growing solar sector, the Energy Ministry in 2016 announced its commitment to sign 20-year power purchase deals with the private solar power plants and foreign investors.
“The ministry purchases private solar output at a rate of 3,000 rials (3 cents) for each kilowatt-hour,” Sadeqzadeh said, adding that the purchase price of electricity generated by renewable sources will rise by up to 30% next summer due to the jump in consumption.
“During the hot season when there is need for extra power, electricity generated by solar farms will be purchased at 9,000 rials (9 cents) per kilowatt-hour”.
Iran has huge potential to harness renewable energy, including solar and wind power. Wind, solar, hydropower, waste heat recovery and biomass plants account for 45%, 35%, 16%, 2% and 2% of the total renewables respectively.
It is reported that the government wants to add 5,000 MW in new renewable capacity by 2022.
The target seems feasible thanks to the launch of several solar plants in recent months as well as a slew of factories manufacturing photovoltaic panels.
A total of 85 industrial plants and 2,000 small-scale units are active in renewable sector while several others are in different stages of construction.
