Why Iran's Electricity Shortage Gets Worse Every Year?

In recent years, Iran has faced an increasing electricity shortage during the peak summer months, and this year, not only are industries facing severe electricity supply limitations, but households are also suffering from frequent blackouts, leading to the closure of offices in some provinces. The electricity shortage in Iran this summer is estimated to be around 14,000 megawatts; a staggering figure equivalent to twice the total electricity production of Azerbaijan, a country that exported three terawatt-hours of electricity (equivalent to 10% of its production) worth $402 million to Russia, Georgia, Iran, and Turkey last year. In other words, even assuming there is a surplus of 14,000 megawatts from neighboring countries and the infrastructure for electricity imports is ready, Iran needs to purchase over $8 billion worth of electricity just for the three summer months. According to previous estimates by the Ministry of Energy and the Research Center of the Parliament, Iran needed to add 5,000 megawatts (7%) to its electricity production annually to prevent shortages. However, as official statistics show, this target has not been achieved in recent years. Additionally, some of the country's old power plants have been decommissioned. Meanwhile, hydropower plants are not operating at full capacity due to droughts. For instance, Iran aimed to launch over 6,000 megawatts of new power plants in 2023, but less than one-third of this goal was achieved. The last time Iran successfully launched 5,000 megawatts of new power plants was in 2010, and since then, the target for increasing electricity production has never been met; the result is that net electricity exports (the difference between exports and imports) dropped from a positive eight terawatt-hours in 2014 to one terawatt-hour in 2022. Iranian officials state that the country's electricity trade balance has been hovering around zero since last summer. The archives of the Ministry of Energy's statistics also indicate a continuous increase in imports and a decline in electricity exports since 2020. Besides the failure to meet electricity production growth targets, ongoing extensive losses in electricity also exacerbate the country's energy crisis. Official statistics from the Ministry of Energy and the Research Center of the Parliament show that 13% of the electricity produced in Iran is lost in the transmission and distribution network; this significant figure is equivalent to 40% of total household electricity consumption in the country. The low efficiency of thermal power plants in Iran is another factor contributing to the worsening electricity shortage crisis. Over a decade ago, Iran aimed to convert gas and steam power plants to combined cycle plants to increase their efficiency from about 30-33% to 45%; however, not only was this target not achieved, but the majority of the power plants launched in recent years are also of low-efficiency steam or gas types. On the other hand, the Islamic Republic's neglect of clean energy has also become problematic; currently, solar and wind power plants account for only about 1% of the country's electricity production. This is while Iran, with 300 sunny days, could be ideal for developing solar energy. The Iranian government aimed to launch 2,850 megawatts of new solar and wind power plants in 2023, but only 2% of this figure was realized.