Iran’s electricity is caught in false pricing; power plants don’t even cover their maintenance costs

According to Energy Press, with the announcement of an increase in gas deliveries to power plants to more than two billion cubic meters since the beginning of the year, serious questions about the productivity of this volume of fuel and the efficiency of power plants are being raised again.
Mohammad Jafari Anari, CEO of Jamco (Jovin Electric Machine Industries Company) and former CEO of Zagros Kowsar Power Plant Production and Management Company, in an interview with Energy Press, emphasizing the need to reform the electricity production structure, believes that the issue of power plant efficiency is more complicated than being described with just a low or high number.
He said: When it comes to low efficiency, we need to look more closely. Old power plants have an efficiency of about 30 percent and yes, the equipment is worn out and needs renovation. But if we compare it with the global average, the situation of Iranian power plants is not much lower than the world average.
Jafari Anari continued: Increasing gas deliveries to power plants should be examined; Have they really given more gas or have they reduced liquid fuel? In any case, this year’s efficiency has improved slightly compared to last year, especially with the arrival of several new power plants.
He considered one of the main solutions to increase efficiency to be the conversion of gas power plants to combined cycle and explained: This measure can increase efficiency by about 50 percent, without the need for more fuel consumption. That is, if the efficiency is 34 percent, it will reach nearly 50 percent with a combined cycle.
However, he did not consider the construction of new power plants economical and clarified: Until the electricity economy is reformed, it is not economical to build a new power plant. The cost price of electricity in Iran is almost the same as in the world, but the selling price is much lower. When the rate is set below 200 tomans for purchasing electricity from power plants, even the cost of repair and maintenance is not covered, let alone the investment in building a new power plant.
Referring to the annual growth in electricity demand of between 5 and 7 percent, Jafari Anari warned: “For several years, this growth has not been accompanied by an increase in production, which has caused a serious imbalance and deficit. Last year, a deficit of about 18,000 megawatts was announced, and this year, unofficially, there is talk of 20,000 megawatts. If this trend continues, next year the deficit will reach 22 to 24,000 megawatts.”