BMI View:Thermal power will remain the dominant electricity source throughout our forecast period, with its share of total electricity generation set to rise from --.- in ---- to --.- in ----, represented by a rise in absolute terms from ---.-TWh to ---.-TWh, thanks to a large pipeline of gas fired projects. A number of gas fired projects are in various stages of completion in Iran, where the gas sub-sector accounts for the overwhelming majority (--.- ) of thermal energy generation. According to the Tehran Times, three new thermal projects, with a combined eventual generating capacity of -,---MW, were scheduled to be inaugurated between late August ---- and late September ----. One of the most significant developments has been Turkey s Unit International announcing in June ---- that it will invest in seven gas-fired combined cycle power plants in Iran, which will boost generating capacity by -,---MW. Construction of the seven plants - all located in different provinces - is expected to begin in Q---. ...By the end of the period, Iran will generate ---.-TWh from natural gas, equivalent to a y-o-y average increase of over - . The benefits of the signing of the Joint Comprehensive Plan of Action in terms of new investment in gas fired power generation will begin to be seen in earnest during ----, when a series of new gas fired power plants will be commissioned.
...We retain our forecast that Iran s total power generation will increase -.- y-o-y to ---.--TWh in ----. Over the rest of our forecast period to ----, this output will grow at an average rate of -.- . ...According to the Tehran Times, three new thermal projects, with a combined eventual generating capacity of -,---MW, were scheduled to be inaugurated between late August ---- and late September ----. An agreement in principle for Turkey s Unit International to construct seven gas-fired combined cycle plants was signed in June ----, ahead of the reported conclusion of more detailed negotiations surrounding the USD-.-bn deal in August, which were expected to result in a formal approval by the Ministry of Energy, before construction gets underway in ----.In August ----, a spokesman for the Atomic Energy Organisation of Iran (AEOI) announced that work on the new Bushehr units was expected to start within the next one and a half months , in a bid to bring the two new units online between October ---- and ----. ...August ----, a spokesman for the Atomic Energy Organisation of Iran (AEOI) announced that work on the new Bushehr units was expected to start within the next one and a half months , in a bid to bring the two new units online between October ---- and ----. Repeated earlier delays and concerns that further nuclear development could undermine the easing of sanctions mean that both the new units are unlikely to start operating until after ---- - if they come to fruition at all - although there is a small upside risk to our current forecasts.
...BMI View: While the last quarter has seen extended engagement by foreign firms seeking to invest in Iran s power sector, our earlier caution about the pace of change has been borne out, with a key German industry body voicing concerns about the limits of sanctions removal. We continue to foresee overall growth in power generation of just over -.- annually over the next few years, driven largely by the gas-fired segment of the thermal sector, with fiscal constraints and the wider macroeconomic outlook likely preventing the government s ambitious plans coming to full fruition, especially in the largely untested renewables segment. ...
