From March 2024 to March 2025 (Iranian year 1403), Iran’s electricity market underwent major reforms in pricing, regulations, and market structure, aimed at enhancing transparency, efficiency, and investment attractiveness. The key developments include:
1. Tariff and Fuel Pricing Reform
The Ministry of Energy increased the wholesale electricity market price cap to 1,620 IRR/kWh and raised the fuel benchmark price from 750 to 1,800 IRR/unit, aligning with real costs and supporting financial sustainability.
2. Expansion of Trading via Energy Exchange
Regulatory updates boosted electricity trading volumes through Iran Energy Exchange trading platform and improved pricing transparency.
3. New Electricity Market Regulatory Board Appointed
In October 2024, a new regulatory board was established to oversee market rules and operations.
4. Growth of Bilateral Contracts
About 42% of total electricity transactions occurred outside the centralized market, reflecting increased flexibility in power contracting.
5. Unified Power Plant Operation Scheme
As per Session 398 of the Regulatory Board, four distinct power generation dispatch models were consolidated into one unified framework to improve market efficiency and coordination with the grid.