Total Dependence on Thermal Power a Cause for Concern

EghtesadOnline: Policymakers’ shortsightedness and the existence of a mafia-like syndicate that controls thermal power plants has caused Iran to remain fully dependent on fossil fuel-based power, a lecturer at Sharif University of Technology said.

News ID: ۷۸۷۰۷۳

28 September 2021

“Despite the huge potentials of harnessing renewables, including geothermal, solar and wind power, the development of renewable energy projects is seriously impeded,” Barq News also quoted Hashem Oraee as saying.

“The installed capacity of renewable energy should have reached 5,000 megawatts by 2021, but shockingly it is still less than 1,000 megawatts and nobody dares to explain why,” Oraee said.

“It is regrettable that energy officials have almost done nothing to promote solar and wind energies over the past 25 years while billions of dollars have been invested in building thermal power stations in the country.”

Oraee, who also heads the Renewable Energy Union, noted that although the cost of setting up solar and wind farms has been on a downward spiral across the world in the past few years, the trend has been reversed in Iran, which explains why the field attracted no investment in the past four years.

“It makes no economic sense why the expense of generating one kilowatt of thermal power should be $600, but the same volume of power will cost $750 if it comes from a wind farm,” he said.

“The wrong policy of investing in thermal power plants has led to drastic consequences, one of which is that the Oil Ministry cannot supply them with enough fuel, so power cuts have become a norm despite massive investment in the sector.”

The lecturer also said if decision-makers had invested in renewable projects, there would have been neither gas shortage nor power cuts. “Natural gas could be either exported or given to petrochemical plants to be converted to value-added commodities, instead of being burnt in thermal power plants,” he said.

No Quick Fix

Referring to frequent power outages in summer, which are likely to continue in winter, Oraee said there is no quick fix for the problem and even if policymakers shift their attention to renewables and enough investment can be attracted, the Energy Ministry will need at least four years to overcome the power shortage that has affected not only households but also industries.

According to the professor, who also chairs the Wind Energy Scientific Society, consuming unlimited volumes of oil derivatives and gas for heating and not converting it to value added products means wasting national resources and imposing a heavy burden on future generations.

“Substituting oil and gas with clean energy and using green power should be prioritized to, among other things, get rid of the costly, wasteful and unsustainable energy subsidies,” he added.

Iran is the only country in the world where 20% of the annual GDP ($100 billion) are spent on energy subsidies. The world's total direct energy subsidies, including for fossil fuel, are estimated at $400 billion.

Oraee further said supplying natural gas to low efficiency power plants (20%) is a clear indication that energy is neither valued nor conserved in Iran.

“Gas should be converted to added-value goods in the key petrochemical sector instead of being wasted in Rey, Besat and Tarasht power plants that should have been decommissioned 20 years ago,” he added.

Of the five power stations in Tehran, three have efficiency levels under 25% for more than two decades and this means 75% of the gas feedstock turns into heat and toxic emissions.

“Even if the power plants have higher efficiency, the electricity they produce is wasted in homes for heating purposes without contributing to the GDP,” he said.

Ecological Problems

The professor pointed out that shifting to renewables is fast becoming a norm in most countries (including oil-rich states) as they face massive ecological problems, namely global warming from fossil fuels.

However, in Iran, the authorities still insist on building more thermal power plants and raising their efficiency from 20-30% with no initiative for expanding green power.

Iran's installed power capacity is 85 gigawatts, of which less than 1 GW comes from renewables such as solar and wind.

Iran’s northwestern neighbor Turkey is increasing electricity production such that renewables account for 13 gigawatts of the country's total power output of 89 GW.

This is while India’s renewable capacity is said to be 79 GW and Japan 32 GW, while the tiny UAE generates 15% or 8 GW of power from green resources.

“Iran’s annual gas consumption in the household sector has surpassed 200 billion cubic meters. Moving toward renewable energy can help reduce it to 40 bcm,” Oraee said and complained that those who decide the energy policy in Tehran remain oblivious to simple arithmetic.

Almost 98% of Iran’s power production come from oil derivatives and gas. This is while most countries are revisiting energy policies and moving toward renewables to reduce their CO2 footprint, costs and healthcare bills, in order to save resources for future generations.

Failure to do so (divest from fossil fuel) will exacerbate Iran’s energy crisis and make it irreversible, he warned.