Energy Ministry Willing to Help Industries Increase Power Output

EghtesadOnline: Iran's Thermal Power Plants Holding Company, a subsidiary of the Energy Ministry, is willing to cede the ownership of state power stations to major power users, including automakers, steel complexes and cement factories, the managing director of TPPHC said.

News ID: ۷۸۶۹۷۴

07 September 2021

“Industries can and should play a key role in boosting electricity output by embarking in power plant development projects, in which case they will no longer be at the mercy of the state-run Power Generation, Distribution and Transmission Company [Tavanir],” Mohsen Tarztalab was also quoted as saying by IRNA.

Industries can help the power sector in three ways, one of which is converting single-cycle plants to combined cycle stations that requires huge investment beyond the means of TPPHC, he added.

Referring to other means, the official noted that steel factory owners can build new power plants, or upgrade dilapidated power stations.

“If industries complete unfinished projects, the Energy Ministry guarantees that adequate power will be supplied to factories even during peak demand hours, regardless of households’ consumption level,” he said.

“To encourage investors, negotiations are underway with the Central Bank of Iran to provide steel factory owners with foreign currencies to help engage in power plant initiatives.”

According to Tarztalab, the maximum output of thermal power plants is close to 51,000 megawatts, while peak power demand has exceeded 67,000 MW.

Estimates show that Iran’s electricity consumption will be around 78,000 megawatts in the next five years, and in case the current level of electricity generation does not increase, the country will have a deficit of 18,000 MW.

In order to fill the gap between the current output and the level of consumption in five years, about 4,000 megawatts should be added to the nominal capacity of the country's power plants annually, which is definitely beyond TPPHC’s financial ability.

Peak Demand

IRNA quoted Mohsen Bakhtiar, the Energy Ministry's deputy for economic and planning department, as saying that industries want Tavanir to pave the way for them to build their own small-scale power stations for use during peak demand when they have to turn off all their equipment.

“Talks are underway between the Energy Ministry and the Ministry of Industries, Mining and Trade so that the infrastructure can be developed for industries to enable them to use their own small-scale power generating plants and not be dependent on the national power grid,” he said.

“If and when heavy industrial customers are equipped with their own power generation systems, they will not need to shift consumption from peak [11 p.m. to 7 a.m.] to off-peak hours. Nor will they have to stop their business in summer when demand exceeds supply.”

Mining and manufacturing industries have borne the brunt of the recent power supply crisis, as they were forced to halt operations repeatedly in June and July because the state-run utility company could not produce sufficient electricity.

Frequent power outages in Tehran have adversely affected industrial units, taking a toll on electrical equipment and reducing efficiency.

Industrialists say unplanned outages have led to a decline in production, in addition to damaging expensive machinery.

The weekly loss of steel mills due to power cuts is estimated to be around 235 million.

Mohammad Amin Emami, Tehran governor general’s deputy for economic affairs, said blackouts will cause no serious harm if industrial units take precautionary measures, one of which is installing power generators.

A manufacturer at Abbasabad Industrial Town, 50 km southeast of Tehran, noted that the units are not equipped with electricity generators because it is too costly to install devices capable of supplying sufficient power.

“Most high-tech tools in factories, like furnaces, use more than 1 MW of electricity and even an emergency generator cannot produce this amount of power,” Seyyed Sajjad Hashemi, the industrial town’s head of the board of directors, said.