Investment in renewable energy projects in Iran is booming, according to a high-ranking official with the country’s Ministry of Energy.
“Our feed-in tariff policy has met a very warm welcome from the private sector, with many projects now on stream or under development and most of the investment coming from foreign resources,” Mohammad Sadeqzadeh, the deputy minister of energy and head of the Renewable Energy Organization (SATBA) told Trend on Tuesday.
A feed-in tariff (FIT, FiT, standard offer contract, advanced renewable tariff, or renewable energy payments) is a policy mechanism designed to accelerate investment in renewable energy technologies. It achieves this by offering long-term contracts to renewable energy producers, typically based on the cost of generation of each technology.
“About $4 billion worth of projects in renewable energy field have been submitted to the Ministry of Economy. Some $400 million worth of these projects have been completed and gone on stream and projects worth some $1.5 billion are being developed,” the official noted.
He said that these projects vary from geothermal to solar, wind and small hydro power plants.
In a bid to diversify energy resources and shift away from fossil fuels for electricity generation, Sadeqzadeh said a quarter of Iran’s new power generating capacity in the next four years should come from be coming from renewable energy sources.
Officials say Iran needs to expand power generating capacity by 5,000 MW annually, or 20,000 MW in four years, to meet the rising demand in the housing sector and expand its footprint in the regional energy market.
In roughly the same period, installed power generating capacity of renewables, including wind and solar, is envisioned to increase by 5,000 MW.
Meanwhile, Iran has small-scale solar plants with a capacity ranging from 7 MW up to 30 MW in operation, or in different stages of development.
In July, a 20-MW photovoltaic power complex, dubbed Mokran, was launched in Kerman Province, while a 10-MW solar power plant in Isfahan and a 30-MW solar unit in North Khorasan Province are to become operational in the near future.
Thermal plants that burn fossil fuels make up more than 80 percent of Iran’s installed power capacity of around 76,000 MW. The share of renewables stands at a meager 240 MW.
In 2016, only less than 1 percent of Iran’s power was generated from renewable sources.