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Iran mulls overpricing renewable power to spur investment

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
File photo shows a view to photovoltaic panels at a solar farm in the central Iranian province of Semnan.

Iranian officials have proposed a plan to overprice electricity generated in the renewable sector to encourage more investment from producers who have faced economic difficulties due to American sanctions.

A spokesman of Iran’s Renewable Energy and Energy Efficiency Organization (SATBA) said on Sunday that the government seeks to overprice the renewable power by around a third, adding that the move could help producers maintain their current output levels amid the current difficult situation.

“To continue to encourage the private sector investment in the renewable power plants, SATBA has proposed to the Ministry of Energy an increase of 30 percent in the price of guaranteed purchase of power from the renewables,” said Ja’far Sigaroudi.

The official said Iran, a country highly dependent on thermal power, has made a huge progress in production of renewable electricity over the past four years mainly thanks to a government scheme which guarantees the purchase of the power produced in private plants for a period of 20 years.

He said, however, that economic woes caused by American sanctions on Iran have dismayed some investors, prompting the government to search for new incentives that could attract more funding to the sector.

Sigaroudi said Iran’s minister of energy had ordered the creation of taskforce to pursue the case.

A tiny share, more than one percent, of electricity generated in Iran, one of the world’s largest power producers, comes from renewable sources.

Recent estimates by the Ministry of Energy shows that Iran’s total output from renewables had reached 3.566 terawatt hours although the installed capacity across the country is double that figure.

Solar and wind power currently account for over 85 percent of the output in over 100 large-size renewable power plants across Iran.

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