Renewable Energy Sector Update
The Iranian renewable energy sector is poised for significant growth over the forthcoming years, with plans to add 30 gigawatts (GW) of clean electricity as part of efforts to diversify the energy mix.
The Economic Council of Iran has announced its decision to grant licenses for the purchase and importation of equipment and machinery necessary for the establishment of renewable energy facilities with a cumulative capacity of 30,000 megawatts (MW). This initiative seeks to address the increasing demand for electricity.
According to Iran’s renewable energy planning, newly commissioned projects will consist of 25,000 MW derived from solar sources and 5,000 MW from wind power.
Currently, thermal power plants, primarily fueled by gas and diesel, responsible for generating approximately 93% of Iran’s electricity, highlight the nation’s reliance on fossil fuels. The government aims to expand renewable energy sources to mitigate emissions and accommodate rising electricity demand, particularly following recent supply disruptions affecting various cities.
Renewable Power Plant Infrastructure
The Economic Council’s initiative to authorize the procurement and import of equipment for renewable energy facilities is focused on maximizing the utilization of domestically produced energy, engaging knowledge-based companies, and adhering to technical standards.
Currently, 70% of Iran’s electricity generation is reliant on gas, underscoring the urgent requirement to diversify the energy mix with renewable alternatives to fossil fuels.
The council emphasized the necessity of diversifying electricity production methods, citing examples of innovation from other countries. For instance, India has successfully converted waste into gas, while certain nations generate power using geothermal energy, and others utilize biodiesel as an alternative to gasoline.
Solar Power Developments
According to Iranian Energy Minister Ali Abadi, affiliated companies within the Renewable Energy Association have entered into agreements with the Ministry of Energy to establish solar power plants with a combined capacity of 12,000 MW. It is anticipated that approximately 2,400 MW of this capacity will be operational by summer next year, and with the integration of two additional producers, the overall capacity of renewable energy facilities in Iran will reach 5,000 MW.
Minister Abadi elaborated that the government’s objective to generate 30,000 MW of renewable energy over the next four years is projected to save around 11 billion cubic meters of fuel annually and lead to cost reductions ranging from $5 billion to $7 billion.
Dr. Omud Shukri has indicated that the energy crisis in Iran could reach a 30% shortfall during peak summer demand in 2025, as highlighted in his analysis of the challenges stemming from Western sanctions and supply deficiencies.
He noted significant issues with the efficiency and reliability of aging infrastructure, especially for steam and gas power plants that have been in operation for over 30 years. The low efficiency of diesel and gas stations, not exceeding 30%, can be attributed to outdated technology and insufficient combustion processes, reflecting Iran’s lagging advancements in this area compared to other countries.
This winter, Iranian power stations faced additional operational challenges due to increasing demand across residential and commercial sectors. Approximately 80 out of about 600 generating units ceased operations due to declining supplies of natural gas and liquid fuel.
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