Talks With JICA to Finance Renovation of Power Plants in Iran

EghtesadOnline: Serious negotiations are underway with Japan International Cooperation Agency, or JICA, to finance the renovation of major power plants in the country, the Thermal Power Plants Holding Company's deputy for planning said.

News ID: ۷۴۴۶۹۳

24 January 2018

"Reconditioning two large thermal power plants, namely Shahid Rajaee in Qazvin Province as well as Shahid Mofatteh in Hamedan, tops TPPHC's agenda," Hamidreza Azimi was also quoted as saying by IRNA on Tuesday.

Referring to ongoing talks with JICA, Azimi hoped that negotiations will come to fruition and an agreement could be signed by the end of the current fiscal year on March 20 .

According to the official, permits have been issued by the government's Economic Council and if talks yield favorable results, the Japanese agency will provide TPPHC with low-interest banking facilities with a 20-year repayment period, Financial Tribune reported.

"The initiative is aimed at not only boosting the efficiency of power stations but also minimizing maintenance costs and increasing the plants' lifespan," he said, adding that Iran's power plants' efficiency stands at 37.8%, yet as per the Sixth Five-Year Development Plan (2017-22), it is expected to reach 40%.

Asked about development plans for Rey power station south of Tehran, Azimi said the construction of two electricity generation units with a total capacity of 1 gigawatts with the help of Japanese firms tops the priority list.

Technical talks are underway with JICA to rehabilitate the dilapidated power station in two phases and much-needed licenses to attract foreign investment have already been issued.

Pointing to TPPHC's key role in meeting the country's power demand, Azimi noted that 91.8% of Iran's electricity needs were met by thermal power plants in 2016.

According to the official, total electricity production capacity stands at 77,000 MW, over 62,000 MW of which are generated by thermal power plants operated by TPPHC.

According to Mohsen Tarztalab, the head of TPPHC, Iran has decided to phase out inefficient power plants, improve the aging electricity infrastructure and move toward modern power production technology.

"Under regulations outlined by the Energy Ministry, all new power plant units must have an efficiency of 58% and above," he said.

With an installed power production capacity of around 79,000 megawatts, Iran meets almost 80% of its electricity demand from aging thermal plants operating for decades.

It is reported that steps have been taken to gradually convert the conventional plants into combined-cycle units whose efficiency is much higher.

------Power Grid Expansion

According to Deputy Energy Minister Houshang Falahatian, the country's power plant capacity has reached 79,000 megawatts, indicating an 11% rise since 2014 when it stood at 69,000 MW.

Furthermore, the national power grid has expanded by 60,000 kilometers in the last four years.

Referring to Iran's electricity consumption peak that reached 55,400 MW last July, he added that power consumption has risen by 21% in the last four years.

"Power plants' efficiency presently stands at 38%," he said, noting that plans are underway to stabilize the country's power output capacity at 80,000 MW by June 2018 when consumption hit a high point during the hot summer days.

According to Falahatia, power wastage in Iran's national grid has witnessed a 4.5% reduction, receding from 15% to 10.68% in the last four years while renewable energy capacity has surged to reach 500 MW.