According to Mr. Reza Zarifi, Director of Electricity Market Contracts in Iran, achieving maximum participation of industrial power plants during the 2025 peak period depends on resolving three key challenges. Below is an overview of his efforts in this regard.
Can you provide a brief overview of the 14 mega projects and your responsibilities?
As you know, the Ministry of Energy has planned and initiated 14 mega projects to address the imbalance between electricity production and consumption during the 2025 peak period. One of these projects, Mega Project No. 5, focuses on maximizing the participation of industrial and oil sector power plants. I am actively working on this initiative.
What actions have been taken so far?
The key actions related to Mega Project No. 5 can be summarized as follows:
1. Assessing and following up with regional electricity companies and electric power distribution companies regarding new power generation capacities, particularly from industrial consumers.
2. Communicating and negotiating with regional electricity companies to connect industrial power plants that are not yet linked to the national grid.
3. Conducting site visits to new industrial power plants, such as Makran, to monitor project progress and ensure new power units are operational. Additionally, visiting existing industrial power plants, like Fajr Petrochemical and Chadormalu, to address their challenges.
4. Holding meetings with the Ministry of Petroleum and the National Iranian Gas Company to resolve fuel cost issues for industrial power plants.
5. Following up and handling financial correspondence to allocate liquidity for settling the receivables of industrial power plants, a key requirement for their participation next year.
What is the progress of the projects so far?
Regarding the identification of new industrial power capacities:
A 160 MW unit at Makran Petrochemical Power Plant is expected to be operational before the next peak period.
Shirino Power Plant (Damavand Petrochemical) is expected to increase its surplus capacity from 100 MW to 200 MW next year.
The second unit of Almahdi Aluminum Power Plant, with a 160 MW capacity, will be operational before the 2025 peak period.
Additionally, 200 MW of new capacity has been identified from small-scale and workshop industries.
In the fuel cost sector, after coordination with the Ministry of Petroleum and the National Iranian Gas Company, the process of reporting electricity delivery to the grid has been streamlined, eliminating unnecessary bureaucracy. We are also working with the National Iranian Gas Company to fully digitize the data exchange process.
What are the key challenges facing the project?
We face several major challenges in Mega Project No. 5:
1. Reactive power charges applied to industrial consumers with surplus generation capacity that collaborate with the national grid. To resolve this, we need the support of Tavanir Co. and the Ministry of Energy to pass a resolution and revise the reactive power cost formula for these consumers.
2. Settlement of industrial power plant receivables, which requires 2,000 billion Tomans in financial resources. Debt settlements and offsetting industries’ receivables and liabilities can significantly help clear debts and encourage participation.
3. The formula for calculating industrial power plants’ fuel costs is another challenge. A proposal has been developed in cooperation with the Planning Deputy and submitted to Tavanir Co. for approval by relevant authorities.
When do you expect the project to be completed?
Mega Project No. 5 is a continuous and dynamic initiative, aimed at sustaining and enhancing industrial power plants’ capacity to support the national grid. Therefore, no specific completion date is set, and we will continue efforts to ensure and expand participation until the end of the next peak period.