Iran Energy Ministry to Phase Out Old Power Plants

EghtesadOnline: The Energy Ministry plans to boost power plants’ efficiency by phasing out outdated plants and building new ones in line with its strategic plan by 2025.

News ID: ۷۸۲۹۹۱

20 June 2018

According to ISNA, in addition to boosting power efficiency, the initiative will curb the burning of fossil fuels in power plants and contribute to environmental conservation.

Iran's power plants' efficiency stands at 37.8%, but as per the Sixth Five-Year Development Plan (2017-22), it is expected to reach 40%.

However, as per the Energy Ministry regulations, all new power plant units must have an efficiency of 58% and above, according to Financial Tribune.

Gholamreza Agah, an official at Iran’s Thermal Power Plants Holding Company, believes the main challenge facing the plan to shut old power plants, which can only be fulfilled in cooperation with the ministries of energy, oil and roads, is the lack of a comprehensive database on domestic companies.

TPPHC’s Managing Director Mohsen Tarztalab also said earlier that every dilapidated power plant should be replaced with a modern one, otherwise the renovation plan will not succeed.

“Four power plants are to go on stream in a month in Sistan-Baluchestan Province, following which outdated power plants can be phased out,” he said.

Iranian power plants producing about 3,000 megawatts are dilapidated.

According to the official, the replacement of an outdated power plant with a modern one needs an investment of $2 billion which, if provided, will help complete the modernization plans in five years.

This is while Abdolrasoul Pishahang,a senior official at Iran Power Generation, Distribution and Transmission Company (Tavanir), said in 2016 that the outdated plants will be scrapped in a maximum 2-3 years.

Hamidreza Azimi, TPPHC’s deputy for planning, told IRNA in January that negotiations were underway with Japan International Cooperation Agency to finance the renovation of Iran's major power plants.

"Reconditioning two large thermal power plants, namely Shahid Rajaee in Qazvin Province and Shahid Mofatteh in Hamedan, tops TPPHC's agenda," he added.

Azimi stressed that permits have been issued by the government's Economic Council and if talks yield favorable results, the Japanese agency will provide TPPHC with low-interest loans with a 20-year repayment period.

With an installed power production capacity of around 80,000 MW, Iran meets almost 80% of its electricity demand from aging thermal plants that have been operating for decades.

The country is the largest exporter and importer of electricity in the Middle East and exports electricity to Pakistan, Turkey, Iraq and Afghanistan.

Azerbaijan and Armenia supply electricity to Iran under a swap agreement.