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Go Green with GBO: Iran transitions rapidly to renewable energy despite US sanctions

Iran is saving money by investing in solar electricity and reducing its dependence on imported oil and gas

Iran has plenty of solar and wind electricity. In recent years, the Iranian government has committed to exploiting these resources to become a regional leader in renewable energy.

Iranian renewable energy efforts are driven by the desire to diversify its energy mix. Over 90% of Iran’s energy comes from fossil fuels. Iran’s fossil fuel dependence makes it vulnerable to price shocks and supply interruptions. Renewable energy can help Iran secure its energy and minimise its fossil fuel dependence.

Climate change is another reason Iran is pushing renewable energy. Iran is one of the most susceptible nations to climate change, and the administration recognises that renewable energy can mitigate its effects.

Iran has promoted renewable energy production in several ways. In 2017, the government pledged to generate 10% of its electricity from renewable sources by 2025. The government has also supported renewable energy production with financial incentives, legislation, and regulations.

Due to these efforts, Iran has advanced its renewable energy sector. Iran installed over 1 GW of solar and wind power in 2021, boosting its total renewable energy capacity to above 4 GW. Iran produces the 12th most solar electricity in the world and the 6th most wind power in the Middle East.

Iran’s solar power potential is huge. The country offers some of the strongest solar radiation in the world, with 300 days of sunshine per year. Iran is perfect for solar power development.

The Iranian government will invest extensively in solar power in the future. The government aims to install 10 GW of solar electricity by 2030. This would make Iran a top solar power generator.

Iran’s solar power programme is benefiting the economy and jobs. The solar business creates jobs and diversifies Iran’s economy. Iran is saving money by investing in solar electricity and reducing its dependence on imported oil and gas.

Iran is moving toward solar electricity. Solar power development has advanced, and the government is dedicated to continuing it. Iran may lead the world in solar power with its enormous solar resources and favourable government policies.

Iran must overcome some obstacles to meet its renewable energy ambitions. One issue is foreign investment. Iran struggles to attract foreign renewable energy investment due to international sanctions. Improving Iran’s electrical infrastructure is another issue. Iran’s electrical infrastructure cannot sustain large-scale renewable energy development.

Despite these obstacles, Iran is moving toward solar electricity. The country has the resources, government support, and private sector investment to change the global renewable energy market.

US Sanctions Holding Iranian Progress Toward Renewable Energy

The latest global data research, ‘Iran Power Market Outlook to 2035, Update 2022: Market Trends, Regulations, and Competitive Landscape’, analyses Iran’s power market structure and offers historical and forecast capacity, generation, and consumption data through 2035. We analyse the country’s power market regulatory structure, competitive environment, and key power plants.

The report also covers macroeconomics, supply security, generation infrastructure, transmission and distribution infrastructure, electricity import and export scenarios, competition, regulation, and future potential in the power sector. Power sector deals are also examined in the report.

The US sanctions have significantly harmed the Iranian power industry, making it nearly impossible for Iran’s finance and banking sectors to make payments or get debt and equity financing for projects.

Despite sanctions, the Iranian Energy Ministry declared in January 2022 that it will install 10 GW of renewable capacity (including conventional hydropower) by 2026 to reach its 30 GW renewable cumulative capacity goal. The Renewable Energy and Energy Efficiency Organisation (SATBA) inked an MOU with private investors to execute the plan and promised to allocate IRR30tn ($71.4m) to the first batch of projects in the next budget. Over 80 GW of renewable power projects have been applied for, according to SATBA.

The government exempts renewable power plant equipment from customs charges. An electricity charge is also levied on electricity bills to develop renewable power facilities. Unfortunately, this has not been enough to ensure renewable energy development in the country. Iran sanctions prevent foreign investment in renewables, which is the biggest issue.

After the country’s first solar cell facility opened in early 2022, renewables have improved. The plant, near Khomeini, has a 150 MW starting capacity.

Plans call for 1.5 GW of photovoltaic (PV) modules at the plant by 2023. To expedite renewable power production, Iran must implement the nuclear deal, which will reduce sanctions and attract private investment.

Sanctions relief will strengthen Iran’s renewable sector. Current trends indicate that just 25% of anticipated capacity additions will be accomplished by 2026. Foreign investments and knowledge transfer of new renewable technology can help stakeholders realise the Iranian renewable market’s untapped potential.

Iran’s constant-price GDP rose 0.6% from $491.1bn in 2010 to $524.6bn in 2021. After US sanctions, the country’s GDP (at constant prices) fell from $565.5bn in 2017 to $531.4bn in 2018, and to $495.4bn in 2019 after the pandemic. GDP stabilised in 2021 and is predicted to expand by 2% to $627.1 billion by 2030.

In conclusion, Iran is rapidly transitioning to renewable energy despite US sanctions. The country has abundant solar and wind electricity resources, and its government has initiated several measures to reduce its fossil fuel dependence and mitigate the effects of climate change. Despite facing obstacles such as international sanctions and inadequate electrical infrastructure, Iran has made significant progress in advancing its renewable energy sector. With continued government support and private sector investment, Iran may lead the world in solar power generation and change the global renewable energy market. Sanctions relief and foreign investments can help Iran realise its untapped potential in the renewable energy market and benefit its economy and job creation.

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