Interview with Mr. Reza Zarifi, Director of Iran Electricity Market Contracts Department

  • 06 November 2024
  • 11:50
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Interview with Mr. Reza Zarifi, Director of Iran Electricity Market Contracts Department

The Ministry of Energy, supported by a team of 100,000 personnel, has launched 14 mega-projects to address the electricity supply-demand imbalance expected during next year's summer peak load period. One key initiative among these projects focuses on optimizing electricity generation from industrial-owned and oil-sector power plants. Through timely and precise implementation, these projects aim to stabilize peak electricity demand in the coming year. Notably, during this year’s peak load period, electricity delivered from industrial-owned power plants to the national grid exceeded 4,000 megawatts. In an interview with the Public Relations and International Affairs Management of IGMC, Mr. Zarifi, the Director of Iran Electricity Market Contracts Department, discussed the achievements and future goals related to these projects.

Reflecting on the successful passing through of this year's peak load period, could you describe the level of cooperation between industrial-owned power plants and the national electricity grid during the mentioned period?

Fortunately, with a lot of effort and positive and constructive interaction from the owners of industrial-owned power plants, we observed substantial increases in both participation and energy contributions from industrial-owned power plants compared to last year. Capacity delivery to the national grid rose from 3,000 MW in last year to over 4,000 MW in this year. Likewise, the energy supplied by these plants grew from 6.5 billion kilowatt-hours last year to more than 8.2 billion kilowatt-hours this year.

 

Which new industrial-owned power plants participated during this year’s peak period?

New industrial-owned units such as Zendehrud (Mobarakeh Steel), Saba Dehloran, West Asia Steel, the new Goharan (Gol Gohar) unit, Sarv Power Plant (Chadormalu), and the Al-Mahdi Aluminum plant actively contributed during the peak period of this year.

 

Could you elaborate on the steps taken concerning industrial-owned power plants under Article 4 of the Law on "Removing Barriers to the Development of the Electricity Industry?

Industrial-owned power plants governed by Article 4 are subject to specific conditions, leading to the formation of a joint working group, including representatives from the Ministries of ‘Petroleum’, ‘Industry, Mine, & Trade’, and ‘Energy’, as well as the ‘Organization of Environmental Protection’. This group developed a standardized contract for energy exchange and support, finalized after extensive review. The Ministry of Energy has issued this contract format for implementation, marking a significant step forward. The first of these agreements will soon be established between the Iran Grid Management Company and Mobarakeh Steel Company for the Zendehrud Power Plant.

 

From your perspective, what challenges remain in enhancing collaboration with industrial-owned power plants?

First, fuel costs present a challenge, with industrial-owned power plants seeking better collaboration from the Ministries of Energy and Petroleum to apply appropriate tariffs for electricity delivered to the grid. The electricity sector is actively working to address these issues through negotiation. Second, settlement of overdue claims remains difficult due to liquidity constraints, but the electricity industry is pursuing financial tools or cash settlements to resolve a significant portion of the overdue claims.

 

What initiatives are planned for the next year peak load period?

As part of the 14 mega-projects defined in the country's electricity industry, increasing the participation of industrial-owned power plants and those affiliated with the Ministries of Petroleum, Defense, and Industry, Mine, & Trade is a priority for the coming year. In addition to addressing current challenges, we are collaborating with regional electricity companies to identify new production capacities and connect off-grid industrial-owned plants to the grid. With these preparations, we anticipate notable growth in electricity generation from industrial-owned power plants next year. I would like to extend my gratitude to all owners of industrial-owned power plants for their dedicated cooperation during this year’s peak load period despite various challenges.

 

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