Going Extra Miles: How Iran Can Transform Its Energy Crisis into a Green Future
Today, Tehran finds itself ranked among the top 10 most polluted cities in the world, a statistic that underscores not only the health challenges its residents face but also the pressing need for a sustainable energy transition. The root of Tehran's air pollution lies in an energy system that is excessively reliant on fossil fuels, inefficient in power generation, and unable to meet the country’s growing energy demands. As the energy crisis intensifies and pollution levels rise, the question remains: can Iran go the extra mile to address these intertwined issues with an ambitious renewable energy revolution?
The Energy Crisis: The Consequences of Mismanagement and Inefficiency
Iran's energy sector, once a leader in the Middle East for transitioning from Mazut (a high-sulfur fuel oil) to natural gas, has fallen behind due to corruption, poor management, and flawed policies. Between 1999 and 2008, Iran led the region in the conversion of power stations to cleaner natural gas, even achieving excess capacity in electricity production. However, a lack of consistent investment and the departure of foreign technology companies—like Schlumberger and Halliburton—has led to a deterioration of infrastructure and a dependence on gas-fired power stations that now struggle to meet the country’s rising demand.
Currently, Iran's energy production capacity is a paradox: while the total capacity appears sufficient on paper, its per capita power generation is significantly lower compared to its regional neighbors. Iran’s power generation capacity per capita is roughly three times lower than Saudi Arabia's and four times lower than the UAE's. This discrepancy underscores a critical issue: while Iran has considerable fossil fuel resources, it has failed to leverage these assets effectively to improve energy efficiency or transition to cleaner energy sources.
The country’s over-reliance on natural gas for power generation—accounting for 85% of Iran’s electricity—has become a major vulnerability. Not only is the gas production stagnating, but there is also a lack of investment in upstream gas infrastructure, leading to supply shortages. As the world moves toward renewables, Iran remains stranded in a cycle of inefficiency, with outdated power stations continuing to burn Mazut, contributing to air pollution and exacerbating water shortages.
Rising Energy Consumption: A Crisis in the Making
The problem is compounded by Iran's rising energy consumption, particularly in the residential and industrial sectors. As the country’s population grows, so too does its demand for electricity and fuel. According to the data, Iran's per capita energy consumption is significantly higher than that of Turkey, despite having a smaller GDP per capita. Iran consumes approximately 80% more liquid fuel than Turkey, a clear indication of inefficiency in its transportation and industrial energy use. Energy inefficiency has been a persistent problem, with car engines consuming more fuel and energy consumption in industry rising year after year.
In contrast, countries like Japan have significantly reduced their energy consumption per capita by investing in energy efficiency measures, such as improved fuel efficiency in cars and a shift towards cleaner energy sources. Yet, in Iran, energy consumption continues to rise by 6-6.5% annually, with no substantial steps taken to curb inefficiency.
Climate Change and Its Role in Iran's Energy Crisis
Iran is not only facing an energy crisis but also an escalating climate crisis. Over the last 30 years, Iran has experienced a 2.7°C rise in temperature, which is significantly higher than the global average. These rising temperatures, coupled with decreased rainfall, have led to severe droughts and increased soil fragility. More worryingly, extreme weather events, such as heatwaves and dust storms, have become more frequent, further straining Iran’s energy infrastructure.
As the temperature continues to climb, electricity demand spikes during summer, leading to blackouts and production disruptions. During the 2024 summer heatwave, Iran set a new record for electricity consumption, reaching 77,151 megawatts at its peak. The demand surge forced the government to implement scheduled power outages for both industrial estates and households. These blackouts highlight the vulnerability of Iran’s energy sector, which lacks the flexibility and sustainability needed to meet the growing demands of both its people and industries.
Renewable Energy: The Solution to Pollution and Energy Deficits
The good news is that Iran has a vast untapped potential for renewable energy, which could provide the solution to its energy crisis and pollution. Solar and wind energy are the two most viable sources that Iran can invest in, given its vast open spaces, abundant sunshine, and wind-prone regions.
Regions like Gilan province, home to the Jirande area, could generate over 1,300 MW of wind energy annually, surpassing the capacity of the Bushehr nuclear plant. Southern Tehran, with its high solar intensity, could become a hub for solar power generation, providing clean energy to millions of homes and businesses. The cost of solar technology has dropped significantly over the past decade, making it more affordable than ever to install residential solar systems that can feed into the grid.
Furthermore, Iran's solar power potential is among the highest in the region, but it has been underutilized for years. The country’s solar intensity could power vast solar farms that would reduce its dependency on fossil fuels and alleviate pollution caused by gas-fired power plants.
The Investment Challenge: Unlocking Iran's Renewable Potential
While the potential for renewables in Iran is immense, the country faces a major investment gap. Private sector investments in the energy sector have declined from $6.2 billion in 2011 to just $600 million in 2021, reflecting a lack of policy support and economic instability. Furthermore, sanctions and political challenges have discouraged foreign investors from participating in renewable energy projects.
Renewable energy projects, particularly solar and wind farms, are more cost-effective and quicker to implement than traditional gas-fired power plants or nuclear facilities. They offer a faster return on investment, especially in a country like Iran, where solar and wind resources are abundant. Government policy reforms are critical to creating an environment where private investments in clean energy can flourish.
The Path Forward: A Green, Energy-Secure Future
Iran is at a critical turning point. The energy crisis and pollution are interlinked problems that require a comprehensive solution. The time to invest in renewable energy has come—solar and wind technologies are affordable, abundant, and scalable. By embracing clean energy, Iran can reduce its carbon emissions, mitigate pollution, and ensure energy security for the future.
A shift toward renewable energy can also revitalize Iran’s economy, create green jobs, and restore global competitiveness. The potential is there, but action is needed now. The time to go the extra mile in embracing renewable energy is now, not tomorrow. It’s time for Iran to leverage its natural resources, invest in sustainability, and shift from fossil fuels to clean, renewable energy.
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