Iran, Caspian Region Has A Bright Future, Thanks To The Sun

Iran is not letting its vast oil and natural gas reserves hold it back from investing in alternative sources of energy. On Thursday, energy minister Hamid Chitchian kicked off the construction of what will be the Middle East’s largest solar plant.

Located in Iran’s southeast and straddled between the cities of Kerman and Bam, the plant, costing about $140 million, is expected to churn out 100 megawatts (MW) of energy per year. (It takes about one MW of energy to power 1,000 homes in the United States.)

Iran has the world’s fourth largest proved reserves of oil, and the second largest proved reserves of natural gas, according to US government statistics. Due to government subsidies for fossil fuels, Iran is considered one of the most energy intensive countries in the world, making it energy inefficient.  

But alternative energy projects launched this year, like the one shaping up in Kerman, are looking to turn things around.

In February, Germany’s Athos Solar completed two solar plant projects near Tehran, having constructed two sites that produce around seven megawatts of electricity per year. Germany has become a global player in alternative energy engineering, and Iran has reinstated 20-year power purchase agreements with it, setting feed-in-tariffs at “highly profitable” rates of 17 to 30 Euro cents ($0.33) per kilowatt-hour.

In April, Iran launched a solar plant near the central city of Isfahan – the largest one built to date. Construction was carried out jointly between Iran’s Ghadir Electricity and Energy Company and Greece’s Metka engineering firm. The plant has around 39,000 solar panels each occupying an area of about 0.64 square meters. Electricity produced from the project is being sold to the Renewable Energy Organization of Iran, contracted for a period of 20 years.

In June, the Managing Director of North Khorasan Power Distribution Company, Alireza Sabouri, announced that the construction of a 300 MW solar power plant in the northeastern province of North Khorasan will begin by October, thanks to Switzerland. In July 2016, Swiss investors agreed to invest €40 million ($44 million) in Iran's renewable energy sector with facilities wholly designed, built, installed and launched by European firms.

Harnessing the sun’s rays is not exactly new for Iran, however. The country’s first solar plant opened in Shiraz in 2008, with others in Yazd (2009), Mashhad (2011) and Zarand (2015).

In 2015 the government announced the construction of a solar plant built at a cost of $22 million in the Aras Free Trade and Industrial Zone, located in East Azerbaijan Province. 1,880 solar panels taking up an estimated area of 30,000 square meters are to churn out four MW of energy.

China has been looking to get in on the action as well. Last year the Shanxi International Energy Group voiced its readiness to construct photovoltaic power stations across Iran with a total capacity of 600 MW. The company had built a 100 MW hydro-electrical power plant in Iran in 2007, and is looking to start solar construction with a 50 MW capacity plant.

Iran’s electricity industry ranks 14th in the world and first in the Middle East in terms of electricity generation, by having an installed power generation capacity of over 70,000 MW. Due to the abundance of hydrocarbons found underground, the country has been heavily dependent on natural gas and oil to generate power.

But scientists and government officials know that someday those resources will run out.

According to a study by Finland’s Lappeenranta University of Technology, Iran has the capacity to build a 100 percent renewable energy system by 2030 at a cost of about $187 billion. In order to achieve zero carbon emissions, Iran would need to develop about 49 gigawatts, or 49,000 MW, of solar power; 77 gigawatts of wind energy, and 21 gigawatts of hydropower.

Water shortages and air pollution have become an acute problem for a country of more than 80 million people, forcing officials in Tehran to embrace renewables.  As part of its effort to boost renewable energy capacity, the Iranian government allocated $60 million during the 2014-15 Iranian calendar year to develop projects on photovoltaic technology, particularly in rural areas. The country is looking to produce 5,000 MW of renewable energy by 2020, with more than 4,000 MW expected to come from wind power. (Currently Iran has approximately 141 megawatts of installed wind power.)

Iran is not the only country in the Caspian looking to harness the power of mother nature. Despite the region being awash in oil and natural gas, energy production from sustainable, environmentally sources have been all the rage lately.

EXPO 2017, a modern-day version of the world’s fair, is currently away in Kazakhstan’s capital, Astana, where more than 100 countries are showcasing innovations and technologies focused around the fair’s main theme, namely “Future Energy.” The event, which opened June 10, runs through September 10.

In July 2009, Azerbaijan’s President Ilham Aliyev announced the formation of the State Agency on Alternative and Renewable Energy Sources within the Ministry of Industry and Energy. In a country where the majority of the public exchequer is funded by hydrocarbons, promoting the status of renewables at the federal level was no small measure. In spring 2011, SAARES in cooperation with UNDP launched a new project on ‘Promoting Development of Sustainable Energy in Azerbaijan’. This project became possible with the financial support of €500,000 provided by the European Commission and $790,000 contributed by the Government of Norway.

“Azerbaijan is a country rich in oil resources; however, we intend to minimize dependence on oil resources and strengthen human capital,” Assistant to First Vice President of Azerbaijan Anar Alakbarov said during his visit to the Expo in Astana earlier this month. “The state is set to switch to alternative energy. Many environmental projects are being implemented now,” he added.

“Developing solutions to problems in the sphere of alternative energy sources is what worries humanity today,” Alakbarov emphasised.

Nearby Turkey, while technically not in the Caspian basin, is hosting the 86th International Fair in Izmir from August 18–27. The fair has energy innovation as its peg, and there Renewable technologies in solar, wind, geothermal power and biomass will be on display.