Iranian-German Committee Explores Better Energy Ties

EghtesadOnline: Top-level Iranian and German officials gathered in a meeting on Tuesday to explore opportunities in the energy industry in a move that signaled the two countries, unmoved by Washington's efforts to undermine Tehran's nuclear deal, seek to improve economic ties.

News ID: ۷۸۰۱۰۴

28 October 2017

In the first meeting of German-Iranian Energy Committee in Tehran, hosted by Iran's Deputy Oil Minister Amirhossein Zamaninia and German Ambassador to Tehran Michael Klor-Berchtold, the two sides discussed ways of boosting investment and collaboration in Iranian projects ranging from renewables to power plants and gas turbines.

Zamaninia said improving financial and banking ties is imperative to increase the "insignificant" trade balance between Iran and Germany of around $3 billion, ILNA reported.

"This level of trade is insignificant compared to Iran and Germany's potential … One of the first messages of the Iran-Germany Energy Committee should be to facilitate banking relations," Financial Tribune quoted him as saying.

The official noted that German companies can make major investments to help improve Iran's "lack of efficiency" across the energy sector.

Making up about 80% of Iran's power generating infrastructure, Iran's fossil fuel power stations have an average efficiency of 37%, but the country has turned to using highly-efficient turbines made by German engineering giant Siemens as part of a push to renovate its electrical infrastructure.

Siemens is in a deal to sell and transfer the manufacturing know-how of F-class turbines with an efficiency rate of around 60%, a major upgrade over the existing and aging turbines.

Pointing to Iran holding some of the world's largest hydrocarbon resources, Klor-Berchtold said Tehran "has clearly committed itself to promoting renewable energy".

"The first German investments in Iran that I witnessed as German ambassador were two solar plants in Hamedan. These solar plants were the first substantial solar plants being installed in Iran. This German-Iranian project underlines our common goal of a secure, affordable and sustainable energy supply for our future economic development," he was quoted as saying in a statement released by the German Embassy in Tehran.

The energy convention comes a year after the first Joint German-Iranian Economic Commission in 15 years and less than two weeks from US President Donald Trump's announcement to decertify Iran's compliance with the 2015 nuclear accord.

The landmark agreement put Iran back on the global economic and trade map after years of limited investment.

Renewables on Agenda

Ursula Borak, the deputy director general for Germany's economy and energy minister, also told the meeting that Iran-Germany's energy collaborations are centered on renewables and raising power efficiency.

In July, a delegation of seven German companies operating in the renewables sector signed a memorandum of understanding to develop solar farms in North Khorasan Province.

Iran's total renewable energy capacity, including solar and wind, amounts to less than 500 megawatts compared to some 62,000 MW of thermal and 12,000 MW of hydroelectric capacity as well as 1,000 MW of nuclear power.

Officials say Iran needs to expand power generating capacity by 5,000 MW annually, or 20,000 MW in four years, to meet the rising demand at home and expand its footprint in the regional energy market. In roughly the same period, installed power generating capacity of renewables, including wind and solar, is envisioned to increase by 5,000 MW.