Currently, Iran has 77,000 megawatts of power capacity, of which 360 megawatts is renewable energy. Most of the electricity generated in the country comes from thermal power plants which use fossil fuel.
According to deputy Energy Minister Houshang Falahatian, renewable energy including hydropower accounts for about 6 percent of the overall electricity produced in the country where 90% of the fuel used in power plants is natural gas.
This paltry figure in a country with over 300 sunny days and an average of 2800 hours of sunshine is while air pollution in major cities, especially in the capital Tehran, has turned into a major dilemma in recent years.
Iran is one of the most energy-intensive countries in the world, where inefficient energy use amid consumer subsidies has resulted in a per capita energy consumption which is ten times greater than that in the European Union.
The national energy blueprint is now based on expanding renewable power generation and improving energy efficiency by reducing domestic hydrocarbon use which would free up more oil and gas for export.
“We have planned to allocate part of the country's electricity basket to renewables and as a result, we have decided to bring 1000 MW of renewable energy to the national grid each year in the next five years if possible and raise the country's renewable power capacity to 5,000 MW,” Falahatian has said.
These ambitious targets are not to stop there and the overall capacity is to rise to 26,000 MW by 2022, with $60 billion of investment which the Renewable Energy Organization of Iran (SUNA) wants to attract from domestic and foreign investors.
So far, contracts for about 950 MW of renewable energy projects have been signed and others are being negotiated or considered.
Energy producers from Germany, Italy, India, South Korea, Japan, Spain, China, and Switzerland have visited the country to test the waters for possible investment.
On Friday, Norway’s Scatec Solar was reported to be in talks to generate 120 megawatts of solar power in Iran, which would rise to 500 MW later.
The Oslo-listed firm’s CEO Raymond Carlsen told Reuters that the initial project under discussion would cost $120 million per 100 MW installed.
Iran has currently 63 MW of installed solar capacity, chiefly in the cities of Yazd, Kerman, Isfahan and Hamadan.
A further cluster of photovoltaic units are being built in Hamadan and Kerman, with a capacity of 100 MW installed in each city, and another 50 MW solar plant in Isfahan.
A solar power farm in Iran
However, Iran’s largest solar project has been reserved for Qazvin, where the Italians are to set up 1,000 MW of solar capacity with $1.5 billion of investment. It includes constructing an array of 100 photovoltaic solar power stations over 10 years, each with a nominal capacity of 10 MW.
The country also has approximately 141 megawatts of installed wind power. According to SUNA, there are only 15 wind farms in Iran where 100,000 megawatts of potential capacity exists from wind alone.
Officials say more than 4,000 megawatts of renewable capacity to be built by 2020 is expected to come from wind power.