Dubai, U.A.E. - 24th December, 2015

Iran has set up an aggressive growth plan to boost green energies as a key sustainability factor as part of the economic diversification goal under its 6th Development Plan. Environmental and economic sustainability issues in Iran's Economy Mission 2025 have led to incentive plans to attract the private sector to renovate obsolete power technologies and develop renewable and biomass energies across the country. Based on Iran's energy road map, the Government plans to embrace green technologies to increase nominal capacity of power plants from 74 GW to over 120 GW by the end of 2025. The Government has called for new investments, which require technology, engineering, and know-how and to reach this capacity (120 GW), as the country requires investments of more than USD 60 billion.

"The electricity market in Iran grew at a Compound Annual Growth Rate (CAGR) of 6.5% over the past 10 years, which is far beyond its gross domestic product (GDP) growth rate, which is currently not more than 3%," said Ali Mirmohammad, Senior Consultant and Business Development Manager, Frost & Sullivan. "Iran has witnessed the emergence of new participants in the manufacturing and agricultural sectors. Additionally, every year, almost 1.4 million new consumers are added to the electricity market. These developments require an additional capacity of 5,000 MW for each year and enhancement / new investments in the distribution and transmission network," he added.

Power generation plants in Iran are the main consumers of natural fuel resources and consume over USD 30 billion/annum of various fuels including Natural Gas (36 billion cubic metres), Gas Oil (12 billion litres), and Fuel Oil (15 billion litres). Poor efficiency in the power generation and transmission infrastructure results in a huge loss to the economy (over USD 200 million per 1% loss during transmission) that needs to be urgently addressed through new investments.

"Installing new generation high-efficiency turbines, design and construction of new GIS sub-stations, construction of high-voltage transmission lines, as well as inclusion of renewable and green technologies into the energy mix are major plans expected to be implemented by the Iranian Government in the post-sanction era. In addition, biomass from rural waste is the other key investment opportunity in Iran," noted Ali.

The renewable energy industry in Iran is at a nascent stage. Located on the earth's solar radiation belt and having a high potential has created scope for expanding solar technologies in Iran. In the geothermal field, Iran is located on the active geothermal belt and, according to the exploration studies done in this field the country is gifted with 15 potential geothermal areas.

Currently, less than 1% of the total energy in Iran is supplied through renewable energies. However, the Government plans to boost investment in the 6th Development Plan. The target is to install over 5,000 MW renewable energies, which include 4,500 MW of wind power and 500 MW of solar power. Currently, the potential for installing over 15 GW wind energy in areas such as Manjil, Zahedan, Zabol, and Nishapur has been recognised by the Renewable Energy Organisation of Iran.

Mr. Mostafa Rabeie, Head of International Affairs, Renewable Energy Organisation of Iran, states, "Iran can supply over two-thirds of its energy through wind power. The long-term policy within the next decade (2015-2025) is to supply over 50% of required energy through renewables, biomass, as well as other green technologies. Renovation and Modernization of existing Thermal Power Plants with green technologies is also part of the plan. To reach the capacity of 5000 MW of renewable energies, Iran requires investment of over USD 10 billion while project financing is a key restraining factor in this sector as of now. To meet the challenge, Iran aims to attract foreign financing to ease investment across the country. However, this is not possible unless sanctions are lifted. Currently, over 19 projects, which require over USD 1.5 billion, have been proposed".

If you are interested in knowing more about the Frost & Sullivan Energy & Environment Practice, send an email to Ravinder Kaur / Anita Chandhoke, Corporate Communications at ravinder.kaur@frost.com / anitac@frost.comwith your full name, company name, job title, telephone number, company email address, company website, city, state, and country.

The study on Iran's Renewable Market is part of the Energy & Environment Practice's (www.energy.frost.com) Growth Partnership Service programme. Frost & Sullivan's related studies include Global Liquefied Natural Gas (LNG) Market Assessment, Global Microgrids (MG) and Virtual Power Plants (VPP) Market, Global Substation Automation and Integration Market, and the Middle East Power Cables Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

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