Iranian Private Companies Expanding Footprint in Power Production

EghtesadOnline: Private companies account for 67% of Iran's total thermal power output.

News ID: ۷۴۸۰۲۸

30 July 2019

Iranian firms in the private sector produce at least 44,000 megawatts of thermal power per annum, whereas state-run companies’ output is in the range of 21,000 MW, IRNA reported.

A total of 123 thermal power plants are operational, which generated 287 billion kilowatt-hour of power in 2018. This accounts for 92% of the total electricity produced and distributed via the national electricity network.

The government has announced downsizing plans that, among other things, call for reducing its ownership of thermal power stations from the current 33% to 16%, according to Financial Tribune.

The state-owned news agency said the government intends to transfer 80% if its shares in the power plants to the private sector by 2022.

Role Reduction

According to Fereydoun Fayazmanesh, director general of planning office of Iran Power Generation, Distribution and Transmission Company (Tavanir), the government is determined to drastically reducing its footprint in the power sector.

As per law, he says, investment, ownership, production, import and export of power will be delegated to non-government organizations, cooperatives and private companies.

Over the past five years, the government has signed almost $12 billion worth of investment deals with private firms to develop the hugely subsidized power industry.

About $9 billion of the amount envisages construction of thermal power plants and $3 billion for building renewable energy.

Iran needs to add 22,000 MW to its power capacity over the next three years. Under existing contracts, private companies should annually contribute approximately 16,000 MW to the national power grid by 2022.

In Iran, steam-powered plants, gas-powered stations and combined-cycle plants comprise 82% of the total nominal electricity production capacity of 81 gigawatts.

In 2018, EUAS (Turkey's state electricity generating company) and the private sector accounted for 25% and 65% of the total power output, respectively.