Is Iran Carrying The Torch For Renewable Energy?

Posted on Sep 10 2016 - 9:06am by admin

These days, the movement for more renewable energy sources is stronger than ever. The international green lobby has been on a steady rise, and now countries all over the world are taking steps to play ball. Although the middle east hasn’t been the most prominent area in these green initiatives, Iran has recently announced its intention to generate 7 gigawatts of energy from various renewable sources by the year 2030. Here’s a deeper look at their plans.

windmillsAccording to a report from the IRIB news agency, Iran’s energy minister Hamid Chitchian spoke at the third international conference and exhibition of solar energy, expressing Iran’s intentions to drastically increase its output of renewable energy. Aside from the figure mentioned above, he also said that the country intends to add 100 MW of renewable electricity to its national grid by the end of the Iranian calendar year (02/03/17). Of this 100 MW, 70 MW is forecast to be sourced from solar energy. Chitchian went on to mention the guaranteed purchase of this electricity generated from renewable sources. The energy minister said that the government has drafted several programs, including holding tenders, assured power purchasing, and the welcoming of private investors. These initiatives are all intended to support both the energy producers, and outside investors. Chitchian went on to assure these producers and investors of the ministry’s financial support, saying that the government would have no issue in the finance and payments tied to these renewable energy contractors. He also said that there would be no change in the price of energy until March 2018.

These announcements drew media attention from across the world, and will certainly be a prominent talking point at Iran’s renewable energy conference. However, many foreign investors are concerned about certain legislative barriers to doing business in Iran. These days, if a developer wants to secure a power purchase agreement for renewable energy in Iran, they have to secure a construction license from SUNA. Following this, they would also need to obtain a few more permits from various other entities. These include lease contracts or land acquisition, as well as a permit for a grid connection and an environmental permit. After all this, the PPA still needs to be pushed through SUNA for a final signing.

This power purchase agreement usually only grants six months for development, along with 12 months of construction, which can be extended by six months. The commercial operation covers 20 years including the initial period of construction. Of course, investors from western countries also need to be aware of various political sanctions related to Iran. Both the EU and UN have essentially lifted all their sanctions against Iran. However, the US’s sanctions remain in place and very rigid. For business owners, this essentially means that if they’re based in the US, they can’t clear any payments out of Iran. In fact, they can’t enter the market or do business at all without breaking sanctions!

The future of Iran’s renewable energy is uncertain, for now the potential for progress looks very bright!

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