Economic Growth Depends on Judicious Power Consumption

Energy Minister Ali Akbar Mehrabian made the statement in the inaugural ceremony of the 21st Iran International Electricity Exhibition on Oct. 29 in Tehran, ILNA reported.

“Power supply restrictions on industries, including steel and cement factories, will regrettably result in unemployment and reduce exports,” he said.

According to the minister, Iran has access to huge hydrocarbon resources and the best strategy to take advantage of them is to convert fossil fuel energy to electricity to not only meet domestic needs but also to generate revenue via export.

“As an important production factor, electricity can and should help us manufacture value-added goods, which would create jobs in other sectors,” he added.

Referring to the power deficit in the summer, he noted that industries were adversely affected between June and October as the demand outweighed supply by 15,000 megawatts that was unprecedented over the last half century.

Electricity demand peaked at 75 gigawatts while all power stations in Iran cannot generate more than 60 GW.

“Power sector has experienced a substantial growth over the last four decades. Our installed capacity was 10 GW in 1980 and it has now reached 60 GW. However, consumption patterns should be modified, or power outages will keep taking heavy tolls on industries,” Mehrabian said.

A total of 284 prominent electrical companies, equipment manufacturers and vendors from Iran, China, Italy, Turkey, Canada, Germany, France and Japan have participated in this year’s event.

The exhibition, which will end on Nov. 1, covers a variety of fields, including lighting, wire and cable, electrical panels, electrical equipment, automation and instrumentation systems, and transmission lines.

Due to the coronavirus pandemic, the exhibit will be only open for experts, officials and businessmen active in the industry in full compliance with health protocols.

The objective of this exposition is to act as a comprehensive resource for those active in the industry, by providing in-depth information about its status and latest trends influencing its progress.

The energy minister also said that as the number of electricity meters jumps by half a million per year, lack of investment will not only hamper economic development but could also hinder normal life.

The installed power capacity of 60 GW is not enough to meet current demand and lack of investment is causing distress, as the key sector has already faced shortages, he added.

Power consumption in Iran grows by 5-6% per year, but expansion plans have been undermined by financial restraints, management issues and the dominance of energy subsidies.

Fast Growing Demand

According to a recent statement issued by the US Energy Information Administration, electricity consumption around the world continues to rise faster than the population, which is leading to an increase in the average power consumed per person.

EIA said electricity around the world is mostly used in buildings for lighting and appliances, in industrial processes for producing goods, and in transportation for powering rail and light-duty vehicles.

It said growth in global electricity consumption is tied to economic growth, but that relationship may differ depending on the country.

"Producing a service with greater economic value does not necessarily require more electricity than a lower-value service," the statement said, noting that nearly all of the increase in global electricity consumption can be attributed to developing countries outside the Organization for Economic Cooperation and Development.

The average amount of electricity consumed per person, also referred to as per capita electricity consumption, reflects possible changes in the composition of an economy, as in the shift to more energy-intensive industries, and changes in service demand, such as the growing demand for air conditioning and appliances.