Zorlu Holding CEO Omer Yungul expects a concrete investment plan to be announced this year for building as much as 5,000 megawatts of capacity in Iran, Bloomberg quoted him as saying on Tuesday.
It would be similar to plans by another Turkish energy producer, Unit International, which is currently awaiting Iran’s go-ahead to begin constructing seven power plants worth about $4.2 billion in the country.
Unit International concluded negotiations with Iran last month after the Belgium-based energy firm’s chairman Unal Aysal met Iran’s Energy Minister Hamid Chitchian in Tehran where they agreed on the terms of the contract, the Fars news agency said.
The company expects to begin construction of the plants in the first quarter of 2017.
$25 billion of investment
Unit International’s agreement signed in June is part of a much wider effort by Iran to boost its power capacity. The country currently produces 74,000 megawatts of electricity, but it plans to raise this to more than 120,000 MW within the next 10 years.
Officials say some 5,000 megawatts of additional power has to be produced a year to meet rising demand in the country of 80 million.
Iran has put together a package for $25 billion of investment in its booming power industry which is key to the country’s economic recovery, head of Iran Power Transmission, Generation and Distribution Company (Tavanir) said last November.
“Iran’s power industry is facing an average growth of 5% (in energy demands) a year which calls for building annually 5,000 megawatts of additional power generation capacity at a minimum,” Arash Kordi said.
The country needs to invest $7-8 billion a year in its power generation and distribution sector in order to keep pace with its growing demands, the official said.
While energy demand is growing at 5% a year, growth in capacity is limited to a third of that. The government is trying to cut the shortfall.
As part of its plan to attract investment, the government announced in October that it would allow foreign companies for the first time to export part of the electricity which they produced in the country.
Asian, European firms lining up
European and Asian companies have held negotiations to build power plants in Iran and some of them have signed initial agreements.
Energy producers from Germany, Italy, India, Korea and Japan have visited the country to test the waters for possible investment.
Earlier this year, a German company signed a contract for the construction of a wind farm and two photovoltaic power plants in southwest Iran.
Italy’s Fata, the engineering unit of the country’s leading industrial group Finmeccanica, also signed a 500 million euro ($543 million) contract with Ghadir Investment Company to build a power plant in Iran.
Iran's power development plans include
transition from gas-fueled power plants to combined-cycle facilities. According to Deputy Energy Minister Houshang Falahatian, the conversion would boost the national grid with an average efficiency gain of 13-15 percent, totaling 7,000 megawatts.
Home to the world's largest gas reserves, Iran is the biggest electricity producer in the Middle East and North Africa, operating mostly thermal and to a lesser extend hydro plants.
However, Iran also has a significant renewable energy potential including for generating 40,000 megawatts of electricity from solar and wind sources.
/SR
