Increase in Iran's Electricity Export to Pakistan

EghtesadOnline: A 230/63-kilovolt power substation went on stream in the southeastern province of Sistan-Baluchistan last week in the framework of plans to boost electricity exports to Pakistan.

News ID: ۷۳۹۳۳۷

21 January 2017

According to Mehr News Agency, the Jakigur 230/63 kV substation project, which was implemented at an estimated cost of $6 million, has boosted power exports to the eastern neighbor.

In the project, electricity is first converted to 230 kV and then to 63 kV and supplied to buyers.

Following Energy Minister Hamid Chitchian's tour of Pakistan in March 2016, Tehran  signed a memorandum of understanding with Islamabad to boost power exports to the neighboring state by 30% and the Jakigur substation project was part of that plan, accordeing to Financial Tribune.

Pakistan imports 74 megawatts of electricity from Iran per day and reports say it intends to increase this to 104 MW per day, or nearly 30%.

"Pakistan is willing to raise power imports from Iran to 1000 MW," he said, adding that would be subject to improving infrastructure, setting up new transmission lines and providing the necessary equipment to boost the electricity supply.

According to Arash Kordi, managing director of Iran Power Generation, Distribution and Transmission Company (Tavanir), Iran's electricity export is forecast to more than double from the current 10 billion kilowatt-hours per year to 20-25 billion kWh per year by 2020.

Iran's electricity industry ranks 14th in the world in terms of output and 19th in terms of consumption.

The country is the largest exporter and importer of electricity in the Middle East and exports power to Pakistan, Turkey, Iraq and Afghanistan. Azerbaijan and Armenia supply electricity to Iran under swap agreements.

--- Electric Equipment Export

Data published by the Trade Promotion Organization (TPO) indicates that Iran has exported $8.7 million worth of electric switches, cables as well as industrial electric equipment in the first eight months of the 2016-17 fiscal.

Uganda, Iraq, China, Afghanistan and Syria imported electric equipment worth $5 million, $1.1 million, $700,000, $60 million and $7.6 million respectively in the said period, respectively.

TPO officials say electricity exports cannot increase in big numbers unless effective measures are taken to tackle the formidable challenges gripping the power industry.

Experts believe that highly-competitive prices of Chinese and Turkish electricity equipment, lack of internationally well-known brands, regular fluctuations in currency rates that adversely impact exporters as well as financial and banking constraints are among the issues hampering the domestic electricity sector.

Successive governments in Tehran have often insisted on increasing non-oil exports, yet in practice, their policies and plans have been largely dependent on oil export revenues.

TPO experts opine that the government has to facilitate Iranian producers' presence in international markets. It also needs to increase tax incentives and exemptions and support producers in marketing, advertisement and brand promotion, without which there will be little chance to penetrate the global market for electrical parts and equipment.