Electricity Export Revenues Less Vulnerable to Sanctions

EghtesadOnline: Developing electricity infrastructure and boosting power export can help minimize the country's dependence on oil sales that are vulnerable to political issues.

News ID: ۷۴۵۷۶۶

31 July 2018

The statement was made on Monday by Mohammad Chegini, an energy expert, ILNA reported.

According to the official, the development of high value-added electricity sector, both generation and services, not only will guarantee revenues under any political circumstances but will also help get rid of a single product economy.

The diversification of energy export basket by selling power and giving a wide range of services should top the country’s energy sector priority list, as it is not easily subject to sanctions or other political conflicts, according to Financial Tribune.

"Supplying neighboring states with both electricity and natural gas to run their power stations will make them heavily dependent on us," Chegini said, adding that the policy helps Iran continue its financial transactions regardless of political tensions with world powers.

Referring to looming US sanctions, he noted that if power infrastructure was more developed and more electricity was sold to neighbors, the economic situation would not have been so chaotic. The US withdrew from an international deal on Iran’s nuclear power industry on May 8 and said it would reimpose oil sanctions against the country.

The official noted that electricity export can generate more revenues than the export of natural gas or other hydrocarbon products, yet power wastage should be minimized and the range of quality electricity services need to be expanded.

According to the expert, gas-powered thermal plants' efficiency in Iran stands at 37%.

Nonetheless, the same station is working with an efficiency of 55% in Turkey, which means converting single-cycle plants to combined cycle stations that use both gas and steam turbines to produce more electricity need to be prioritized.

"As long as power plants' efficiency is less than 50%, selling electricity will not be economically viable," he said, adding that although Iran has power exchange arrangements with neighboring states, namely Armenia, Turkmenistan, Afghanistan and Pakistan, its revenue is not comparable with other energy carriers like oil that is why improvement of power infrastructure should top the agenda.