TehranIn a shocking paradox, the electricity crisis is worsening this summer in Iran, an energy exporter, invading the household sector after inflicting heavy losses on the industrial sectors and causing work to be suspended in a number of provinces, coinciding with the rise in temperatures.
After the recovery of the energy sector in Iran – following the few years following the Iran-Iraq War (1980-1988) – the new generations in this oil and gas exporting country have not known power outages in the household sector, but the problem has worsened this year after it began to appear in recent years.
The previous government used to cut off power to industrial towns in order to provide it to the domestic sector, but the high temperatures during the current summer forced it to restrict its supply to government and administrative institutions before it was forced to ration it and cut it off for several hours a day from homes to reduce its consumption, after it used to export the surplus to some neighboring countries.
Is it the temperature?
The Chairman of the Board of Directors of the Electricity Producing Companies Syndicate, Hassan Ali Taghizadeh, revealed a deficit of 17,000 megawatts in the country, criticizing government policies that have reduced private sector investments for years, while warning at the same time of the consequences of not attracting $20 billion in investments to address the crisis over the next five years.
In addition to the Iranian Ministry of Energy reports that estimate the average electricity consumption in the country at a high level, the CEO of the National Electricity Company, Mostafa Rajabi Mashhadi, says that the demand for electricity consumption during the current August broke the record set in the summer of last year, as it exceeded the threshold of 77 thousand megawatts on August 24.
For his part, Ali Akbar Mehrabian, the former Minister of Energy – before handing over the reins of the ministry to his successor Abbas Aliabadi – determined the percentage of increase in electricity consumption during the current summer in his country at around 9% compared to last year, attributing the reason to the heat dome that is looming over the country.
Causes of disability
Meanwhile, economic researcher Abdul Reza Davari mentions several reasons for the electricity shortage in Iran, some of which are natural, such as: increased consumption due to the rise in temperature, and the increase in the number of subscribers to this sector, considering these reasons to be temporary.
But he believes that the main problem lies in: the decline in investment in the electricity production sector for years.
Speaking to Al Jazeera Net, the Iranian researcher attributed the reason for the decline in investment in power generation stations to sanctions and foreign pressures on the national economy throughout the last decade, which led to the marginalization of power station maintenance and restoration projects, a decline in their production efficiency, and a reluctance to launch new projects that had been planned to fill the existing deficit.
Davari points out that the electricity deficit in Iran recently reached about 20 thousand megawatts, explaining that this percentage requires investments worth 20 billion dollars that should have started years ago gradually to reduce its accumulation, but it has not happened yet.
Regarding whether Tehran’s electricity exports to Iraq have contributed to the widening gap between electricity production and consumption, Davari says that electricity exports to neighboring countries, including Iraq, are very small and do not exceed 2% of the total electricity produced in the country, while the percentage of energy waste in the transmission and distribution system amounts to about 8% of it.
In addition to the fact that a number of dilapidated power plants have been out of production over the past years, the drought that has been plaguing Iran for about two decades has hampered the pace of production at hydroelectric plants.
big losses
Similar to the gas shortage during the winter, the power outage in industrial towns has caused many factories huge losses due to the decline in production, in addition to the damage to the agriculture, health and services sectors, as well as the damage to household appliances due to the repeated power outages.
Meanwhile, Attaullah Hashemi, a member of the Council for Pricing and Approval of Support Policies for Agricultural Crops, recalled the policy of previous governments that had always urged farmers to use electricity instead of diesel to extract water from wells, stressing that the losses of the agricultural sector due to daily power outages amounted to 4,000 trillion riyals ($95 million), calling on the government to bear those losses.
For his part, Hamid Reza Fouladkar, Chairman of the Steering Council for Continuous Business Improvement, called on the relevant authorities to compensate the losses incurred by factories due to the power outage in industrial towns and to oblige the government to pay the dues of the industrial sector in accordance with Article 25 of the Business Environment Improvement Law.
Government and Pricing
For his part, economic researcher Askar Sarmast believes that the size of losses resulting from power outages varies from one sector to another, but he believes that steel, copper and aluminum production plants are the most affected by the electricity crisis, while the education sector is almost unaffected by it due to the summer vacation.
Speaking to Al Jazeera Net, Sarmast believes that the energy crisis is indirectly causing a decline in investment in industrial sectors and depriving the national economy of projects that remain on paper due to investors’ fear of potential losses resulting from the widening gap between electricity production and consumption.
He believed that addressing the electricity crisis is possible by reducing energy waste, diversifying its sources, and supporting renewable energy sources, given that the country contains many suitable sites for producing wind energy and enjoys a sunny climate almost all year round.
Referring to the dominance of the government sector in the electricity production network, the same speaker sees the official pricing system as a challenge that does not encourage the private sector to invest in the electricity sector, calling for improving management and reducing governance in this sector.
