“Conversion of single-cycle power plants (gas-powered) into combined cycles can help raise the efficiency to 40%,” Mohsen Tarztalab was quoted as saying by IRNA.
Thermal plants account for 80% of Iran’s total power generation (84,000 MW), he said, adding that steam-powered, gas-powered and combined-cycle plants constitute 19 gigawatts, 25 GW and 23 GW of the thermal units, respectively.
Of the total thermal output (67 gigawatts), 25 GW is produced by gas-powered facilities that have efficiency levels of less than 32% and their conversion to combined cycles can help increase thermal power efficiency by 4% and save12 billion cubic of natural gas a year, according to Financial Tribune.
In a thermal power station heat is converted to electric power. Energy from a thermal power plant not utilized in power production must be released into the environment in the form of heat. This wasted heat can go through a condenser and be disposed with cooling water or in cooling towers.
A combined-cycle power plant produces up to 50% more electricity from the same fuel than a traditional simple-cycle plant. The waste heat from the gas turbine is routed to a nearby steam turbine, generating extra power.
According to the official, converting 500 MW gas-powered stations to combined cycles will cost $450 million.
The Energy Ministry says thermal power capacity has risen by 16% or 9,000 megawatts over the past six years -- from 56,000 MW in 2013 to 65,000 MW now. It has said that 123 thermal power stations are in operation of which 20 were built in the last six years.
With installed capacity of 67 GW, Iran ranks ninth in global thermal power capacity. Close to 21 GW of the output comes from facilities that built more than three decades and should be either phased out or renovated. Estimated useful life of an electricity plant is 20 years.
“To rehabilitate the old plants TPPHC requires at least $3 billion per year,” the company’s boss said.
Mounting Debts
A part of the money can be borrowed from the National Development Fund of Iran, the country's sovereign wealth fund. But experience shows that power plant owners cannot repay the loan on time and have been facing mountains of debt.
IRNA says over 60% of the power plants are run by the private companies that sell power to the state-run Power Generation, Distribution and Transmission Company (Tavanir). It has been reported that Tavanir normally does not pay its bills on time as a result of which plants are near insolvency.
Tarztalab noted that after negotiations with East Asian firms in 2018 to attract investment to decommission decrepit power plants failed due to the US sanctions, the government proposed signing contracts with domestic companies. It offered to pay them in kind -- crude oil instead of cash, but senior energy officials including Oil Minister Bijan Namdar Zanganeh, say this is not doable.
The aim of decommissioning ageing plants appears to be a tall order (at least for now) because the government has been struggling hard to plug its ballooning deficit and the private sector is simply not interested due to the bloated bureaucracy and being unsure about the mechanism to get paid after the projects are completed.
Tarztalab is of the opinion that Iran's long-term plans to boost electricity output from the current 84,000 MW to 120,000 MW cannot be realized until the gas power plants are converted and old plants rehabilitated.