Consumption of $30 Billion in Fuel at Iran's Power Plants

A member of the Energy Commission of the Iranian Parliament has reported an annual consumption of $30 billion in fuel at Iran's power plants due to their low efficiency. Malik Shariati stated on Saturday, January 22, that the efficiency of Iran's power plants is very low, around 37%, leading to a massive waste of fuel. Over 90% of Iran's electricity is generated from thermal power plants that operate on gas, mazut, diesel, and coal. Last year, Iran's power plants consumed about 74 billion cubic meters of gas, 10 billion liters of diesel, six billion liters of mazut, and some coal. The price of this volume of fuel in regional markets exceeds $30 billion. The Iranian Minister of Energy warned that the electricity shortage in summer could reach 25,000 megawatts, hoping it does not. Iran is currently facing an intensified energy crisis, with the government continuously cutting electricity and shutting down offices and schools. The Minister of Energy stated on January 6 that the country faced a 20,000 megawatt electricity deficit this summer, warning that this figure could peak at 25,000 megawatts next year. Meanwhile, the Islamic Republic has had an unsuccessful program over the past two decades to convert low-efficiency gas and steam power plants into higher-efficiency 'combined cycle' types. However, a significant portion of the power plants established in recent years are also low-efficiency gas and steam types. Currently, the share of combined cycle power plants in the country's electricity generation capacity is only 38%. In another part of his remarks, Shariati recommended the use of coal as an alternative fuel in power plants without mentioning the potential development of clean power plants like solar and wind. He stated, 'Currently, our use of coal is zero. Therefore, we can diversify our power plants to avoid fuel issues.' Contrary to his claim, Iran's coal consumption is not zero; it has doubled in less than a decade. Previously, Mohammad Baqer Qalibaf, the Speaker of the Islamic Consultative Assembly, had also promoted the use of the highly polluting coal fuel in power plants. Iranian officials have remained silent about the rising coal consumption in the country, but statistics from BP and the International Energy Agency indicate that Iran produced about 900 gigawatt-hours of electricity by burning coal in 2023, three times that of the beginning of the last decade. Iran currently ranks seventh in the world for greenhouse gas emissions, and disregarding this fact, the Islamic Republic plans to create over 5,000 megawatts of coal-fired power generation capacity by the horizon of 1420.