Iran's Power Consumption Declines

EghtesadOnline: Farming communities and industries cut their power consumption (by turning off water pumps and machinery) in the hot season (June-August) by 2 billion kilowatt hours, the Energy Ministry spokesman for the power department said.

News ID: ۷۵۱۳۶۷

29 October 2020

As per a contract between the ministry and the two sectors (industrial and agro), they consumed much less electricity during peak hours and together got $6 million discount in the billing,” IRNA quoted Mostafa Rajabi Mashhadi as saying.

The state-run Power Generation, Distribution and Transmission Company’s (Tavanir) decision to sign contracts with heavy consumers to shift consumption from peak to off-peak hours delivered and the same scheme will be extended next year, he noted.

The company’s annual power generation capacity is around 300 billion kilowatt hours.

Referring to the ministry’s aim to prevent power outages next summer, Mashhadi said in addition to raising power output, new deals with the key agro and industry sectors will be undertaken.

As per Tavanir’s contracts with 250,000 farmers and industry owners earlier this year, those who turned off their water pumps and electricity-intensive tools between 12 pm to 6 pm were eligible for discounts.

Unlike previous years, this summer in cooperation with the household, industrial, commercial and farming sectors, consumption increased by a meager 0.3% during peak hours compared to 2019.

“The highest recorded national consumption last year was 57,600 MW in one day. Although the number of electricity meters increased by 1 million this fiscal year, consumption peaked at 57,800 MW on July 15th, 2020.”

Needless to say, the virus pandemic and economic recession forced many manufacturing units to shut down their businesses.

It was reported that if the key sectors had been indifferent, consumption would have surpassed 61,000 MW.

Put simply, promoting the culture of judicious consumption and giving industries and farmers financial incentives can play an important role (at least in short-term) in managing electricity usage during summer when households turn on the cooling systems and the mercury in some regions reaches 50°C.

Power generation cost, including production and transmission, is 2 cents per kilowatt-hour, but it was sold for 0.7 cents per kWh up until last June. Rates increased by 7% from the middle of last year.

Power consumption in Iran is among the highest in the world, but the momentum of growth has decreased n the past two years with new policies, including incentives offered to key sectors.

30% Heavy Consumers

Mashhadi put the number of household subscribers at 29 million of which 24 million use power within the average 300-kilowatt hour/month bracket -- set as an acceptable consumption model. Around 30%, or 9 million, of homes are considered heavy consumers.

Economists and environmentalists say households (similar to industries) should also be offered financial incentives if their electricity consumption in summer is less than the consumption model announced by the government.

According to the official, close to 5,000 MW of new electricity production capacity should be added to the national grid annually that would at the least need $3 billion.

Referring to the routine renovation and modernization of thermal plants, he noted that $240 million is needed to undertake such operations on time.

“The Targeting Subsidies Organization owes the Energy Ministry at least $200 million and if the debt is not settled routine upkeep of power stations will be hampered.”

Despite the fact that the government exempted the Energy Ministry from paying to the Targeting Subsidies Organization in 2016, the organization facing financial problems borrowed ($200 million) from the ministry in 2019 and has not paid back yet.

Annual overhaul operations begin every year in September and continue until May the following year.