Iran’s first tender for green projects coming

EghtesadOnline: Iran said it is planning to launch a major tender to attract as much as $12 billion for the development of a series of utility-scale renewable-energy projects.

News ID: ۷۳۵۲۱۱

17 July 2016

Iran’s Energy Minister Hamid Chitchian has told Bloomberg that the tender – the country’s first ever – will be held by the end of the year.

Chitchian says this is part of wider plans by the government of President Hassan Rouhani to install 5 gigawatts of renewable energy in the next five years. An additional 2.5 gigawatts will be installed in the country by 2030, he added.

“We’re not going to use the money from oil in that sector at all,” the Iranian minister emphasized in his interview with Bloomberg in London. “All the investment will be done by the private sector, including local and foreign companies.”

The Energy Ministry is already in talks with some of the world’s largest renewable-energy players including Vestas Wind Systems A/S and Siemens Wind Power Ltd., Chitchian added.

Vestas’ chief sales officer, Juan Aratuce, said last month that Iran could be an important new market for wind energy. Automaker Iran Khodro Co. is negotiating with South Korea’s LG International Corp. to jointly develop electric vehicles, Bloomberg added.

“Many companies have signed agreements during the last few months. Electricity is considered to be one of the most important sectors,” Mohammad Hassan Habibollahzadeh, Iran’s charge d’affaires in UK, has also been quoted as saying.

Most of Iran’s power plants are over 40 years old and need to be renovated and repowered. The government is planning to invest a total of $50 billion in its electricity system in the next seven years, Bloomberg has further quoted Habibollahzadeh as saying.

The Energy Ministry has set 12 separate feed-in tariffs for renewables, depending on the type of technology and the size of the power plant. That system will be kept for projects under than 100 megawatts. The new tender system will be used for facilities with higher generation capacities.

Iran will tender 1 gigawatt of wind and as many as 3 gigawatts of solar, likely in several stages, Chitchian added. It is also seeking to build biomass and geothermal plants and swap natural gas for electricity with Armenia.

Iran may also add solar to its system of energy swaps, which before sanctions were lifted allowed the country to traded crude for refined products. Under a so-called “solar for service” program, developers and land owners would split cash flows generated from power sales, Bloomberg added.

Iran currently supplies 80 percent of its power from natural gas and wants to raise that figure to 90 percent by the end of next year.