Europeans keen on investing in Iran’s renewable energy sector

October 24, The Iran Project – Just days after U.S. President Donald Trump unveiled a more confrontational policy toward Teheran, European companies are rushing to invest in Iranian Renewable Energy Projects.

Trump’s refusal to certify to Congress that Iran is complying with the Joint Comprehensive Plan of Action (JPCOA), the deal devised by the world community to rein in its nuclear program, has upset Washington’s allies in Europe.

In reaction to Trump’s measure, The European grouping and its single members have started to restore economic ties with Tehran after the easing of sanctions and do not want a new crisis that could imperil the current interaction with the Iranian government.

So far several European companies have voiced their willingness to make investment in the country’s  renewable energy projects.

Recently, the Iranian government decided to cede renewable energy projects to the private sector and will support Iranian companies in this respect, as well.

The US, China and many European countries plan to cut dependence on fossil fuels and by 2025 all of the electricity will be met from renewable energy sources in the mentioned countries.

At present most countries prefer to establish fewer thermal power plants and cut dependence on fossil fuels, in the meantime, wind and solar energy are considered as the best options for replacing the oil and gas in generating power.

Australia Investment

On Oct 7, Austrian Benefit & Solar Company signed a multi-million-dollar contract with Iran to construct several solar power plants in the Southern part of the country.

The contract worth $100 million will be spent on constructing four solar power plants in Abadeh, Fars Province.

“The capacity of the power plants will be 70 megawatts and will be built in Abadeh and Izad-Khast; both town are located in the Northern part of Fars Province,” Director General of Economic Affairs and Finance Office Babak Dayee said.

Dayee also said that the agreement includes two 25 and two 10-megawatt plants, adding that the four plants will be built and connected to the country’s electricity network in seven months.

Denmark readiness for investment

On Oct 10, President of the Iran Wind Energy Association (IRWEA) Hashem Oraee  said Danish companies are ready to invest $1 billion in developing renewable energy projects in Iran, adding that the giant energy companies including Siemens and Vestas will contribute to implementing wind energy projects in Iran.

The official pointed to the development of renewable energy in the past decade and said by increasing the share of renewables, Denmark currently meets 43 percent of electricity demands from renewable sources.

 UK Investment

Specialist renewable energy investor Quercus will invest over half a billion euros in a solar power project in Iran, with construction to start in the first half of 2018, the company’s chief executive told Reuters.

The planned 600-megawatt (MW) plant, located in central Iran, will be the sixth largest globally, behind projects of up to 1.5 gigawatts (GW) in China and India.

Diego Biasi, chief executive of Quercus, which has a track record of investing in renewable energy in Europe, told Reuters the firm had decided to go for such a big project to get an endorsement from Iran’s Ministry of Energy.

“This is a project of national interest, so we got special support. We had enough investors interested so instead of splitting that across smaller projects which wouldn’t have given us the same relationship with the Ministry, we decided to go for one,” he said in a phone interview on Tuesday. The hope was this would lead to more solar projects.

Mokran Solar Power Plants

The newly opened Mokran Solar Power Plants Complex is the latest proof of Iran’s ambitions in renewable energy.

The country’s biggest solar plant was constructed in the eastern province of Kerman in six months and has a capacity of 20 megawatts.

Made up of two 10 megawatts photovoltaic units, it was financed with 27 million dollars by the Swiss company Durion AG, and supervised by a German company, Adore.

The complex has been built with a total number of 76 thousand and 912 solar panels, each producing 260 watts in an area of 44 hectares.

German firm in Iran

On Oct 11, A German-Iranian company started construction of a new solar power plant in Meybod region located at central province of Yazd.

Pasargad Solar Projects Ltd, a German-Iranian Company, in collaboration with Kronos Solar Projects GmbH, international players in large-scale solar energies, announced  the launch of the construction of first phase of a new 100 MW solar power plant in Meybod.

‘According to Iran’s 6th five-year development plan, the country has had the green-light and the target of generating over 5,000 MW of renewable energies with 20 years power purchase agreement and many other advantages, the 10 MW Solar Complex with an investment of $12 million is a part of our activities in Iran’s renewable energy market in line with attracting foreign investments,’ Amir Eslamnezhad, Managing director at Parsia Business Development Solutions which is a partner at the project said.

Norway’s Saga in Iran

On Oct. 17, Norway’s Saga Energy has signed a 2.5 billion-euro ($2.94 billion) deal with the state-owned Amin Energy Developers to build a solar power plant with generating capacity of up to 2GW over the next five years., the company announced.

The company will rely on banks, pension funds and Norwegian state export guarantees to fund the plan, and aims to recoup its investment through a 25-year deal on electricity prices, Saga Energy spokesman Rune Haaland said.

“We are a little bit worried about what Trump is doing, we are very much in favor of the atomic deal, but we will of course continue with our plans whatever Trump does, no doubt about that, nothing can change that,” Saga’s Haaland added.

In total, these deals are adding up to many billions of dollars of investment into the Iranian economy. In April, Iran’s deputy economy minister Mohammad Khazaei said EU countries had invested $3.6bn in Iran’s energy sector since January 2016, when the Joint Comprehensive Plan of Action (JCPOA) came into force – the deal which cut sanctions on Tehran in exchange for it cutting its nuclear activities. Khazaei told the 1st Iran-European Union Business Forum on Sustainable Energy in Tehran that the government had “so far approved of 48 projects for electricity generation through renewable energies”.

It seems that amid Trump move for isolating the Islamic Republic of Iran, the European Union and its major member states are now trying to forge a common front toward the US president for expanding their economic relations and business transaction with Tehran.