Power Outages Destroy 40% of Production Capacity in Khorasan; Freefall of Production in Iran

The head of the Iran Chamber of Commerce has reported that Iran's production has reached its lowest level in the past 36 months. On the other hand, Mohammad Shahmian Moghadam, a member of the board of directors of the Khorasan Razavi Industries Association, announced that at least 40% of production capacity has been lost, and Tavanir has ordered a 90% reduction in electricity consumption for industries. Samad Hassan Zadeh, the head of the Iran Chamber, also emphasized that a significant reduction in production occurred in 12 industrial sectors in the country in July of this year. Shahmian Moghadam also told Ham-Mihan newspaper that on Saturday, August 27, "about a thousand factories were contacted," and "there is evidence that they were told to reduce electricity consumption by more than 90% for two weeks; otherwise, due to network problems, electricity will be cut off without notice." Shahmian Moghadam stressed that this order was issued by Rajabi-Mashhadi, the CEO of Tavanir, from Tehran, while he stated that "according to the law, they do not have the right to cut off electricity to industries." This private sector activist mentioned that many export-oriented companies have fallen significantly behind their export plans, and many of their export contracts are on the verge of cancellation. He also pointed out the impact of these outages on the domestic market, stating that "some companies are losing their customers and have incurred losses and penalties." Another impact of the outages on employment is that Shahmian Moghadam mentioned that several companies have lost their workforce and are in the process of downsizing, while others are facing equipment breakdowns due to unexpected power cuts. This private sector activist ultimately emphasized that in a year designated for production leap, "we have already lost at least 40% of our production capacity." Experts believe that mismanagement and lack of planning are among the main factors contributing to the energy imbalance in Iran. The Bushehr nuclear power plant, which took more than two decades to complete, only supplies 1/3% of the country's electricity. Hashem Oraki, an electrical engineering professor at Sharif University, criticized the mismanagement and "weak planning" last August, noting that the total of nuclear and renewable power plants, along with self-supplied and diesel generators in Iran, "only supplies 5% of the country's electricity." Power outages not only cause damage to industries and household appliances but also contribute to rising prices of some products. The Deputy Minister of Industry, Mining, and Trade, Reza Mohtashami-Pour, announced in a letter to the Minister of Industry that the electricity restrictions for industries would intensify this summer, consequently disrupting the activities of industries such as steel and cement, which will ultimately lead to reduced production and increased prices. Reports of power outages in various areas of Ahvaz from a citizen's call to the electricity department, continued outages in Isfahan causing damage to bakeries, emptying concrete in front of the Youngroud electricity office in protest against repeated power outages, power outages in Isfahan causing traffic lights to malfunction in one of the city's streets, a baker's account of power outages in Zahedan leading to dough spoilage, reduction in flour quotas and "wasting" of bakery dough due to daily power cuts, power outages disrupting hospital operations; users: "You live in the middle of a black comedy," and a drop of up to 70% in production of listed companies due to the electricity supply crisis.