Iran Power Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Irani power market is expected to register a CAGR of around 4.5% during the forecast period. The COVID-19 pandemic severely impacted the power industry due to the decreased power demand from the industrial sector in line with the long-term lockdowns. The industrial sector accounts for around 34% of power consumption in the country, thus, the reduced demand from the sector was a major setback for the power production companies. The Irani power market is expected to grow in the near future, due to high power demand, particularly from the growing manufacturing and construction industry, and a requirement to renovate the power infrastructure in the country, which is currently in a crumbling situation. However, the unstable political scenario of the country is expected to hinder market growth in the near future.

• The natural gas segment is expected to hold the largest market share during the forecast period due to the high availability of natural gas in the country.
• The country has huge power demand from the banking and financial sector, largely due to cryptocurrency mining, which requires a considerable amount of electricity. The digital network required for bitcoin mining, which is widely followed in the country, is creating a tremendous opportunity for the electricity sector. Iran accounts for 4.5% of global cryptocurrency mining operations.
• The steadily advancing renewable power segment is likely to steer the power market of the country over the forecast period.

Key Market Trends

Natural Gas Expected to Dominate the Market

• Iran stands in second place in the world for natural gas reserves, accounting for around 1133 trillion cubic feet of proved reserves. Around 85% of electricity in the country is generated from thermal power technology, either in the form of combined cycle power plants, gas-based power plants, and a small ratio of oil-based power generation.
• The natural gas-based power generation in Iran was recorded at around 220TWh (66%) in 2020. In 2020-2021, nine new thermal power plants came into service for the national grid, in which new gas-based power plants and combined cycle power plants were switched on. The projects were a part of the A-B Iran program, currently in the implementation phase by the Iranian government. The country has more such plans to expand its gas-based power generation portfolio.
• In 2021, Thermal Power Plant Holding (TPPH), the state-owned power generation organization, announced plans to establish ten more combined cycle power plants by June 2022. The combined cycle power plants run on both gas and steam turbines. The projects will add around 1752MW of power generation capacity to the national grid.
• In January 2021, Iran got its first F-class gas-based power plant commissioned in the southern Hormozgan Province. Following the agreement between TPPH and Siemens, the Siemens power utility branch installed and commissioned the first unit of a 906MW gas-fired power plant, with a capacity of 307MW. The project is a part of a long-term program currently followed by Siemens and MAPNA group (the EPC contractor) to install F-class turbines in around eight areas of the country.
• Such developments are expected to accelerate gas-based power generation in the country over the coming years.

Growth of Renewables Expected to Drive the Market

• Iran's renewable energy potential largely includes solar energy, hydro energy, geothermal, and a trivial ratio of wind and bioenergy. Hydropower technology accounts for the largest share of the total renewable electricity mix by accounting for around 94% of power generation.
• As of 2020, the country had installed 302MW of wind and 410MW of solar capacity. Under the sixth five-year plan, the country aims to deploy around 7.5GW of solar and wind capacity by 2030. Thus, many projects are lined up to achieve the country’s ambitious target.
• In November 2021, TPPH, Iran's public sector power generation company, announced that a very unique solar thermal power plant is expected to be operational by 2023. The power plant, located in Yazd, includes the integration of solar thermal technology and a combined cycle plant that is a hybrid technology called ISCC (Integrated Solar Combined Cycle). It is expected to produce around 20MW of power to the grid.
• In July 2020, TPPH announced plans to commission Iran's first geothermal power plant within two years. The upcoming power plant will be located in the Meshgin Shahr county of Ardabil Province (northwestern Iran). The first stage of the plant development includes a 5 MW turbine, while a total of 50 MW has been targeted by the end of the project.
• Such developments are expected to offer robust growth for the renewable sources of power generation in the country.

Competitive Landscape

The Irani power market is fragmented. Some of the key players in the market include MAPNA Group, Ardabil Electricity Distribution Company, Tabiran Co., Besat Power Generation Management Company, and KPV Solar Iran, among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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