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Iran Power Report Q2 2011
Business Monitor International, April 2011, Pages: 51
The Iran Power Report provides industry professionals and strategists, corporate analysts, power associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Iran's power industry.
We forecast that Iran will account for 14.88% of Middle East and Africa (MEA) regional power generation by 2015, with a small theoretical supply surplus if nuclear generation plans proceed uninterrupted. BMI’s MEA power generation assumption for 2010 is 1,222 terawatt hours (TWh), representing an increase of 4.0% over the previous year (when markets were depressed by the economic slowdown). We are forecasting an increase in regional generation to 1,508TWh by 2015, representing a rise of 18.5% between 2011 and the end of the period.
MEA thermal power generation in 2010 is estimated by BMI to have been 1,140TWh, accounting for 93.3% of the total electricity supplied in the region. Our forecast for 2015 is 1,370TWh, implying 16.1% growth in the 2011-2015 period. This forecast factors in a slight reduction in the market share of thermal generation to 90.8% - thanks in part to environmental concerns and the promotion of renewables, hydroelectricity and nuclear generation. Iran’s thermal generation in 2010 was an estimated 192TWh, or 16.85% of the regional total. By 2015, the country is expected to account for 14.53% of regional thermal generation.
Gas will have been the dominant fuel in Iran in 2010, accounting for an estimated 57.8% of primary energy demand (PED), followed by oil at 40.1% and hydro with a 0.8% share of PED. Nuclear power should make its first contribution during 2011. Regional energy demand is forecast to reach 1,114mn tonnes of oil equivalent (toe) by 2015, representing 15.9% growth over the period since 2011. Iran’s estimated 2010 market share of 22.38% is set to ease to 21.26% by 2015. Iran’s nuclear demand is forecast to reach 10TWh by 2015, with its share of the MEA nuclear market rising to 38.46%.
Iran holds eighth place above Algeria and Kuwait in BMI’s updated Power Business Environment Ratings. This is largely a reflection of its market size. The power sector is not competitive, with no appreciable progress towards privatisation. The regulatory environment is unattractive and the risk outlook is suffering thanks to the controversy over the country’s nuclear energy programme. We see little scope for improvement on this quarter’s 39-point score.
BMI now forecasts that Iran’s real GDP growth will average 1.90% a year between 2011 and 2015, with 2011 growth assumed to be 1.2%. The population is expected to expand from 73.9mn to 78.6mn over the period, with GDP per capita and electricity consumption per capita forecast to increase by 49% and 4% respectively. Power consumption is expected to increase from an estimated 161TWh in 2010 to 176TWh by 2015, providing a small theoretical surplus, assuming 2.3% average annual growth in 2011-2015 electricity generation. The success of the nuclear programme will have a major influence on generation growth.
Between 2011 and 2020 we forecast a 23.0% increase in Iranian electricity generation, near the bottom of the MEA range. This equates to 11.9% in 2015-2020, up from 10.0% in 2011-2015. PED growth is set to increase from 11.5% in 2011-2015 to 12.6%, representing 25.5% for the entire forecast period. In 2011, the availability of nuclear power is one key element of generation growth. Thermal power generation is forecast to rise by just 21% between 2011 and 2020. Details of BMI’s longer-term power forecasts can be found later in this report.
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