Caspian News | Parto Jamshidi : The renewable energy investment company Quercus Investment Partners signed a deal worth more than £440 million ($594 million) to build and operate a 600 megawatt (MW) solar farm in Iran.
“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 [Iranian Energy] Ministry, we decided to go for one,” Diego Biasi, chief executive of Quercus, told Reuters in a phone interview on September 19.
Under the terms of the agreement signed by Quercus and Iran’s Energy Ministry, the British company will be responsible for the construction, development and operation of the plant. Located in central Iran, it will be the sixth largest photovoltaic facility globally, behind projects of up to 1.5 gigawatts (GW) in China and India.
Construction will start in the first half of 2018 and the plant is expected to be completed by 2021. The work will be completed in stages, in a bid to reduce investor risk, with 100 MW sections coming online every six months.
“The deal with Quercus would support Tehran’s goal to become a major hub of solar energy serving the region and beyond,” Hamid Baeidinejad, Iran’s Ambassador to the UK said in a phone interview with IRNA news agency on Tuesday.
Despite Iran having the world’s fourth largest proved oil reserves and the second largest proved reserves of natural gas, the country plans to expand its renewable capacity due to severe air pollution in major cities. Iran has made a commitment to develop five gigawatts of new renewable energy capacity by 2020, although this will only satisfy a tiny fraction of its electricity demand.
In 2014, Iran consumed 218 billion kilowatt hours (kWh) of electricity, according to US government data, making it the world’s 18th largest consumer. Although Iran is a net exporter of electricity, it imports nearly 40 percent of its demand. Iran’s installed generating capacity was 77 million kW, generated mostly from in thermal power plants that use fossil fuels.
According to Iranian energy ministry, Iran’s installed solar energy capacity is currently 53 MW, and 76 firms have signed deals to study building an extra 932 MW of capacity. Its solar capacity is located mainly in the cities of Yazd, Kerman, Isfahan and Hamadan, and international interest in Iran’s renewables sector has only grown since the lifting of international, nuclear-related sanctions in January 2016.
On September 18, according to reports from Iran Business News, the CEO of Norway’s Scatec Solar, Raymond Carlsen, said that his company is in talks to generate 120 MW of solar power in Iran, and increase it to 500 MW in the future. The initial project under discussion would cost $120 million per 100 MW installed.
Before the announcement of Quercus, contracts for about 950 MW of renewable energy projects had been signed. They are part of the plan to add 1000 MW of renewable energy to the national grid each year in the next five years but the ultimate goal is to establish a 26,000 MW renewable capacity with $60 billion of investment.
Iran’s largest solar project is reserved for Qazvin, where the Italians are to set up 1,000 MW of solar capacity with $1.5 billion of investment. Meanwhile, on July 27 Iran launched a project to build the Middle East’s largest solar plant costing about $140 million in the southeastern province of Kerman.
In February, Germany’s Athos Solar completed two solar plant projects near Tehran, having constructed two sites that produce around seven MW of electricity per year. In April, Iran launched a solar plant near the central city of Isfahan – the largest one built to date.
In 2016, the Chinese 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 will begin 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.