Power Demand Growing Faster Than Investment

EghtesadOnline: The number of electricity meters nationwide in household, agro and industrial sectors has grown 12 times in four decades, the Energy Ministry spokesman for the power department said.

News ID: ۷۵۱۳۰۴

19 October 2020

“There were three million electricity consumers in 1980. Now the number is 37 million, up 1000%,” Mostafa Rajabi Mashhadi was quoted as saying by IRNA.

The national electricity transmission and distribution infrastructure is expanding together with growing output and demand that have reached 60 gigawatts and 57 GW respectively.

Referring to data from the state-affiliated Power Generation, Distribution and Transmission Company's (Tavanir), he said transmission lines that supply from the main power stations to substations in and around cities now stretch over 815,000 kilometers, of which 15,000 km were laid last year. The length was 68,000 km in 1980.

Moreover, distribution lines, which carry electricity from substations to homes, industries and other end-users, extended by 1,000 kilometers in 2019 to reach 130,000 km.

“Installed capacity of substations, including transmission and distribution, has reached 122,000 megavolt ampere (MVA), up 16% compared to 2016 when it was 105,000 MVA.”

According to the official, transmission capacity of substations, both step-up and step-down stations, increased by 8,000 MVA last year, whereas distribution increased by 7,000 MVA.

Energy Ministry data show that $120 million has been spent to expand rural power infrastructure since 2013 largely for installing towers, building substations for transmission and distribution, expanding high voltage transmission lines and aerial transmission cables.

Close to 309 billion kilowatt hours of electricity was produced in 2019, up 6.1% compared to the previous year. Based on data from the Statistical Center of Iran 2.9 billion kilowatt hours were exported to Iraq, Pakistan and Afghanistan, up 4.7% compared to 2018.

Growing Demand

“Iran’s power production has made progress since 2004 thanks to the expansion of combined cycle power plants and $1 billion was invested annually in the sector. Investment needs to double to meet rapidly growing demand.”

Mashhadi noted that as the number of electricity meters jumps by one million per year, lack of investment will not only hamper economic development but could also hinder normal life.

Installed power capacity of 60 gigawatts is enough to meet current demand, but lack of investment is causing distress and it is likely that the key sector could face shortages in the not too distant future, he was quoted as saying.

Power consumption in Iran grows between 5% and 6% per year, but expansion plans have been undermined due to financial restraints, management issues and the dominance of energy subsidies.

According to the official, the Energy Ministry repaid $900 million in debt to private contractors in 2019 but still owes $2.5 billion.

Referring to subscribers’ debt to the Tehran Regional Power Company, he said the amount is $17 million, a big part of which are bills unpaid by state companies and organizations. He did not name names nor say why the debts are still pending.