Private Investors in Iran Get Green Light for Renewable Exports

EghtesadOnline: The Energy Ministry has called on the Renewable Energy and Energy Efficiency Organization—a state-owned entity also known as Satba—to prepare the ground for private sector investment in and export of renewables.

News ID: ۷۸۳۷۳۷

18 August 2018

According to the directive, Satba is obligated to devise the regulations and establish the infrastructure for investors to generate and sell electricity to foreign buyers.

Peyman Taqipour, a director at Satba, told Financial Tribune that Satba has made available the tools through which all domestic and foreign investors are welcome to start new ventures.

"Accordingly, legal or natural entities keen on producing renewable energy in the country will be granted land and network access," Financial Tribune quoted him as saying.

The official noted that the new bid is completely different from previous plans, as the investor will act independently in attracting finance, the ministry will not buy the generated power and investors should attract overseas buyers.

"The ministry will play a facilitative role and not intervene in the process of attracting buyers and determining fees," he added.

"The government will also not benefit from the ventures and the investors will only be charged with land and transit tariffs."

However, the official said Satba will monitor the project procedures.

Requirements

Taqipour said applicants must submit documents that prove they have a memorandum of understanding with a foreign purchaser.

"After verifying the documents, Satba will issue the related permits for grid connection, as well as land and environmental certifications," he said.

"Satba will prepare the power purchase documents that should be exchanged with the target country's related organizations."

The official noted that Iran enjoys enormous potential for the production of different kinds of renewable energies, including geothermal, solar and wind power.

"The private sector is the key to reach the goal … We welcome domestic and foreing players keen to participate in such ventures," he said.

He opined that a lack of competition in an energy market largely dominated by the public sector has held back the renewable industry.

Pointing to the country's installed electricity capacity that amounts to 80 GW, Taqipour said, "The lion's share of power is produced with the help of fossil fuel-based power plants. The share of renewables in Iran’s energy mix is as low as 612 MW, although it has huge potentials to harness renewable energies, including geothermal, solar and wind power."

Energy Mix

Iran intends to increase the share of renewable electricity in its energy mix, partly due to air pollution and to meet international commitments, hoping to have about 5 gigawatts of renewables installed by 2022.

Many foreign firms have rejected the US hawkishness and are determined to continue their business in the country.

Uwe Jorg Kuhnle, the managing director of Germany's solar firm Durion GmbH, said on Wednesday he will continue his business in Iran no matter what, “even if I have to take my money in bags to the border.”

He said Iran is big enough to pursue business at a scale he considers lucrative.

The German investor emphasized that he does not need access to the US market and for this reason, he can stay in Iran.

Durion GmbH has been developing renewable energy projects in Iran for about seven years. The company, alongside its Iranian subsidiaries, has developed what it claims to be Iran’s biggest solar plant at 20 MW with an investment of $27 million. Another 100-MW project is currently under development.