Tehran Power Grid Major Rehab Underway

EghtesadOnline: Rehabilitation of Tehran's ageing power infrastructure is underway and several substations have been repaired or replaced, managing director of Tehran Regional Electricity Company said.

News ID: ۷۴۷۳۹۰

21 May 2019

"The capital's aerial and ground transmission cables have been extended by 534 kilometers during the past two years," Gholamreza Khoshkholgh was quoted by the Persian-language economic newspaper Donya-e-Eqtesad as saying Monday.

TREC has also replaced 100 km of old power cables since 2018, he said.

Tehran electricity network has not had a major overhaul for the past 30 years, which has become a source of concern among officials regarding possible consequences such as high rate of electricity wastage, Financial Tribune reported.

As soon as the major overhaul is over, the rate of power wastage is expected to decline to as low as 2%.

Regarding the systemic increase in demand for electricity in the capital, he said TREC covers Tehran, Qom and Alborz provinces with at least 8 million subscribers or 20% of subscribers across the country. Tehran Province has a population of 12 million.

"The peak hour demand in Tehran stood at 10,182 megawatts last summer, which is expected to increase by 700 MW this year."

Consumption during peak hours in the city was 9% higher in the current fiscal month (April 20 and May 20) compared to the same period last year, “which is alarming,” Khoshkholgh said.

"Subscribers should be required to reduce consumption by at least 2,000 MW, otherwise frequent outages will be inevitable."

Implementing power transmission and distribution substation projects, as well as extending aerial and ground transmission cables, are among the company's priorities because “Tehran's power grid is dilapidated.”

On the electricity sector's achievements, Khoshkholgh said the industry does not need foreign help in building distribution substations. "However, 3% of the equipment needed for transmission substations is imported."

Lacking Motivation

The power industry in Iran, including production, transmission and distribution, is centralized and mostly under government control. The private sector is involved in power production, but has often complained that producing and supplying electricity does not make economic sense due to the low prices.

According to Parviz Ghiaseddin, secretary of the Electricity Industry Syndicate, the government buys each kilowatt of power from power stations at 700 rials (0.5 cent). This rate has not increased in the past four years, whereas operating and maintenance costs have shot up at least three times.

“The government is keen on privatizing the power sector, but with such low tariffs it is obvious that no one is interested.”

The official believes that the government-affiliated Power Generation, Distribution and Transmission Company (Tavanir) should pay 1.75 cents for each kilowatt.

Due to the huge gap in real energy costs and what consumers pay, the government annually pays $1 billion in subsidies.

Data released by the ministry show that among more than 200 countries, Iran has the cheapest power – less than 0.5 cent per kilowatt-hour after Burma, Egypt and Kuwait.