Power Sector Footprint in Technical and Engineering Export Noteworthy

EghtesadOnline: The power industry has a better performance compared to other sectors when it comes to exporting technical and engineering services, vice president of Iran Electrical Industry Syndicate said.

News ID: ۷۴۶۹۱۷

13 March 2019

“Equipment produced in Iran and engineering services of domestic companies are in line with international standards,” IRIB news agency quoted Payam Baqeri as saying.

Iran’s power industry is present in over 40 international markets as exporter of goods and services under engineering, procurement and construction contracts.

Iranian companies are active in Iraq and Syria as the two biggest markets. They also have 58 projects in other countries, namely Turkmenistan, Afghanistan, Azerbaijan, Armenia, Pakistan, Tajikistan, Uzbekistan, Sri Lanka, Uganda, Nigeria, Ethiopia, Oman and India, according to Financial Tribune.

“However, the power sector still has a small share in non-oil exports. Raw materials and gas condensates have the highest share in non-oil exports,” Baqeri added.

Experts say exporting raw material is not a wise and sustainable economic strategy in today’s highly competitive world and it is high time that policy and decision makers change course.

They have been making consistent calls for promoting value-added products, in particular export of electricity, related technical and engineering services and equipment as well as construction of power plants, transmission lines and distribution networks in other countries.

In the key power sector raw material - mostly natural gas - is converted into electricity and exporting it makes more economic sense, they say.

Current gas production in Iran is close to 850 million cubic meters per day of which 50 mcm is exported to Turkey and Iraq.

Conversion of natural gas into electricity, petrochemicals or even using it as fuel to produce steel, aluminum etc. adds higher value compared to the export price of gas.

TPO Data

Data released by the Trade Promotion Organization of Iran show that the country generated $4.1 billion from electricity exports between 2013 and 2018.

Iran exported over 42,926 million kilowatt-hours of electricity to neighbors during the period and domestic companies signed overseas water and power projects worth $5.1 billion.

The country's income from exports in the power industry surged to a record $2.5 billion in fiscal 2016-17, over 98% of which came from technical and engineering work overseas.

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

The country is the largest exporter and importer of electricity in the Middle East and plays a central role as supplier of power in the region with installed power generation capacity of 82,000 megawatts.

It exports power to Pakistan, Turkey, Iraq and Afghanistan. Under swap deals, Iran exports electricity to Armenia and Azerbaijan in winter and imports when domestic demand soars in summer.

Established in 2000, Iran Electrical Industry Syndicate has 450 members including manufacturers, contractors and consultancies from the electrical industry. It strives to help promote Iran’s electrical industry in the world.

IEIS capabilities are notable in the developing world with 95% of all the nation’s requirements being designed, engineered and manufactured locally, including gas and steam turbines, transmission towers, transformers, switchgears, high voltage cables and accessories along with control and dispatching systems.