Tariff Discounts Help Cut Power Consumption

EghtesadOnline: Although peak electricity demand hour growth soared by 5% on average between 2008 and 2018, the figure has barely risen by 1% in the past two months compared to the average of the last ten years, the Energy Ministry spokesman for the power department said Saturday.

News ID: ۷۴۸۱۴۳

11 August 2019

"Electricity tariffs are not high enough to compel heavy users to change their ways. The marked reduction in consumption is rooted in other policies adopted by the Energy Ministry,” Mostafa Rajabi Mashhadi was quoted as saying by Bargh News website.

Elaborating on the ministry's regular appeals to curtail electricity consumption between June and August, he said based on a contract with the agriculture sector, farmers who turn off their water pumps during peak hours (12 p.m. to 4 p.m.) are eligible for discounts in the non-peak hours. He did not provide details, but said similar plans such as "Agriculture Sector Demand Response (DR) Program" helped reduce the load on the national grid in previous years.

Highlighting other measures, he said close to 10 million fluorescent lamps are being replaced with energy saving lights in state organizations plus tuning-up of 5 million evaporative coolers and one million air conditioners with the help of the ministry, Financial Tribune reported.

Industrial consumers who shift load from peak to off-peak times are entitled to discounts from the ministry, the amount of which is calculated as per load reduction percentage plus the period of contribution.

Industries and households constitute 67% of electricity consumption in the country of 80 million people.

The state-affiliated Power Generation, Distribution and Transmission Company's (Tavanir) maximum generation capacity is 58 gigawatts and demand is   57,500 megawatts.

"So long as industries and households continue to consume prudently, there will be no need for power cuts."

Upward Shift

According to energy experts including Mahmoud Reza Haqifam, a deputy manager at Tavanir, so long as electricity tariffs are not adjusted upwards, efforts to encourage households to use less power will be an exercise in futility.

Electricity is subsidized in Iran and presently sold for 0.7 cents per kWh.

Referring to the high energy consumption rates that are reportedly 14 times that of Japan, Haqifam said should effective measures not be taken to check household patterns, "we will face serious challenges in generating energy for future generations".

"One comparison between Iran’s energy consumption and global figures shows that the world's primary energy consumption increased 27% in the past decade, while our overall energy use rose by 80%," he said.

Officials have said that large consumers must pay higher tariffs compared to regular users. He added that the experience of developed countries should be studied, as it shows that the only solution to compel subscribers to use power judiciously is by rewriting the tariff rules: higher consumption means bigger bills.