Research Findings: Why Iran is Struggling with Severe Electricity and Gas Crisis?

Research from Iran's Open Data Platform shows that many provinces in Iran have faced "gas outages followed by electricity outages" this year. The results indicate that "natural gas supply to factories and petrochemicals has been cut off, and Iran cannot meet its petrochemical production targets." According to this report, in recent months, the Iranian government declared national emergency holidays due to "extremely hot weather," but many experts believe these holidays were due to electricity shortages. The Open Data Platform explains why Iran, which was considering exporting its surplus electricity 20 years ago, is now caught in a severe electricity crisis. One reason for this crisis is the lack of rainfall in recent years, while "20% of Iran's electricity is supplied by hydroelectric power plants." Iran has not invested in other renewable energy sources such as solar and wind energy. The Open Data Platform previously explained that "the United Arab Emirates, which has no hydroelectric dam for electricity generation, has three times the renewable energy production capacity of Iran." Instead of investing in renewable energy sources, Iran has "invested billions of dollars in its nuclear power plants, which have also brought significant sanctions against the country. However, currently only 1 to 2 percent of Iran's electricity is produced from nuclear energy." The Open Data Platform's investigations show that Iran "has heavily relied on gas imports from Turkmenistan for years to meet gas needs in northeastern Iran in the provinces of Khorasan and Golestan. However, it did not pay its bills on time, and Turkmenistan filed a legal case against Iran." The report states that in recent weeks, Iran has claimed that Turkmenistan will resume its gas supply, "but the exact rate and continuity of it in the winter months are still unknown." The Open Data Platform writes that one of Iran's significant achievements, which the government has bragged about for 20 years, is replacing oil-fired power plants (fuel oil or mazut) with gas power plants. However, "in recent years, with the reduction in gas supply, the government has resorted to burning mazut in its power plants, leading to serious air pollution." The investigations show that "the most noticeable reason for the electricity shortage is the rapid decline in reserves of the South Pars gas field. Iran's gas reserves account for about 17 percent of the world's total gas reserves and are ten times the total gas reserves of Europe." As the table below shows, South Pars alone holds about 30 percent of Iran's total gas reserves, but 70 percent of Iran's gas comes from the South Pars gas field. Therefore, any production problem in South Pars can lead to a severe reduction in gas in Iran. South Pars began its production about 30 years ago. The Open Data Platform points out three methods to address the decline in production from old gas fields: 1. Stopping water intrusion: As gas fields age, groundwater seeps into gas wells and blocks the gas path. In such cases, repairs must be made inside the well using offshore rigs to prevent water intrusion. 2. Drilling new wells in other gas reserves: Due to lack of foreign direct investment and sanctions, a new phase in South Pars is not under construction. The French company Total, which was supposed to develop phase 11 of South Pars, withdrew from this project. Additionally, drilling in the existing phases has not made significant progress due to budget shortages and a lack of drilling rigs. 3. Installing gas compression facilities: South Pars is part of a large shared field with Qatar called the "North Dome." Qatar is currently initiating gas compression projects to maintain production levels of the "North Dome" and increase gas recovery. South Pars is losing pressure and urgently needs gas compression. The Open Data Platform describes the gas shortage in Iran as a "structural and very complex problem." The investigations indicate that "Iran invested heavily in the development of the South Pars gas field 20 to 30 years ago but has neglected it in recent years. It is likely that in the near future, the problem of gas outages in winter, and consequently electricity outages, will become more acute."