The latest in our series on clean energy in the Middle East and Africa takes a closer look at the progress being made in Iran in pursuit of reducing carbon emissions.
Iran’s quest for clean and renewable energy is complicated by unique circumstances and difficulties. Iran is said to possess roughly 12% of the world’s oil resources1, however Iran’s wealth of oil is counter-balanced by its poverty of vital environmental resources – namely water, fertile soil, and cool, clean air. These already-scarce resources are being depleted further by climate change and pollution, and have tangible effects on the population’s quality of life.
Although Iran’s economy is more diversified than some of its neighbours, it is still significantly tied to its oil exports, and so at a time when countries and companies are increasingly seeking cleaner forms of energy, Iran’s oil resources may prove less of a blessing in the medium- to long-term. Furthermore, the widespread use of petroleum-based products (for example in power generation) that results from such abundance and subsidisation only further exacerbates the environmental issues plaguing Iran’s population (see ‘The environmental issues motivating action towards renewable energy in Iran’ below).
The historical sensitivities involving Iran’s oil
It is not solely Iran’s economic reliance upon oil that makes the thought of turning away from it unimaginable, but also the role oil has played as a nationalistic lifeblood of the country since its discovery at the turn of the twentieth century. The former Prime Minister Mohammad Mosaddeq’s campaign in the 1950s to gain control of Iran’s oil resources from the majority British-owned Anglo-Iranian Oil Company (renamed in 1954 to British Petroleum Company (BP)) through oil nationalisation was one of the most significant events in Iran’s modern history, and the oil workers strike in Abadan played a pivotal role in the 1979 Revolution. Control over its own oil resources has long been a key symbol of Iranian self-determination, and so attempts by the international community to curb Iranian usage of their resources hits an historical raw nerve.
Some members of the Iranian government are more enlightened regarding clean energy than others. This past October – just one month before COP26 – the Iranian Oil Minister, Javad Oji, offered a desperately out of touch solution to the energy crisis: “The Islamic Republic has repeatedly announced with good intentions that it is ready to supply the world’s energy – even for developed countries – by increasing the production of oil and stabilising the oil market, and by supplying this fuel, it will solve the majority of the challenges that are facing the people.”2
The Oil Minister’s bravado appeared not only out of touch with the international community’s crusade for cleaner energy, but also with the current energy crisis in Iran. Last summer, significant electricity shortages resulted in blackouts across the country which caused protests so significant that then-President Hassan Rouhani apologised on behalf of the government, as the production and distribution of electricity in Iran is controlled by government-owned Iran Power Generation and Transmission Company (TAVANIR). It is an irony not lost on the general population that a country so rich with oil should suffer such a severe energy crisis.
Iran's progress towards renewable energy sources so far
In Iran, government responsibility for climate change initiatives is held by the Renewable Energy and Energy Efficiency Organisation (SATBA), part of the Ministry of Energy. A spokesperson from SATBA announced in December 2021 that the amount of energy being supplied to Iran’s power grid from renewable sources is 900MW (1% of the country’s overall consumption), and that this consists of 390MW from solar, 310MW from wind, and the rest from a combination of small hydropower plants, biomass and turbo expanders. SATBA’s research suggests that Iran could ultimately supply 140,000MW of electricity from renewables, of which 100,000MW would be solar and 400,000MW would be wind.3 The Deputy Minister of Energy has said that the present government intends to create plants for 10,000MW of renewables, and a record budget of over 30 trillion rials has been allocated to the pursuit of this ambitious goal.4
Looking ahead: Iran’s roadblocks to investing in clean energy
Iran’s ability to invest in and develop its climate initiatives is to an extent dependent on the performance of its economy. There are certainly many in the government who are endeavouring to create change, and indeed, an Iranian delegation did attend COP26. The head of the Environmental Organisation of Iran, Ali Salajaqeh, argued in his official speech at COP26 that despite Iran’s desire to act in accordance with Paris Agreement, due to the sanctions and resulting financial stress the economy is under, the State is unable to make or attract the necessary investment in renewable energy. He pointed to the commitments that Iran had made for the Paris Agreement – reducing carbon emissions by 4% – which he said would cost US$17bn, and argued that this is outside of their capabilities in the current economic climate.5 Whilst Iran was clearly trying to use the platform of climate negotiations as a bargaining chip in its broader sanctions agenda, it is certainly true that sanctions are a genuine barrier against the development of clean energy initiatives and the amelioration of environmental issues. Iran will need significantly more investment in the sector, as well as an ability to trade with foreign companies in order to attain the relevant technology to enable development.
Iran’s clean energy potential as a solar belt country
One of Iran’s most promising routes to achieving renewable energy is its utilisation of solar power. Located on the solar belt, Iran has a huge capacity for solar energy, and yet it is very far from reaching its potential. After the JCPOA was initially signed, Iranian company Mokran Solar Energy Company started working with German company ADORE GmbH Company (as the program manager) and Swiss DURION AG Company (as the key investor) to create a significant solar farm in Kerman. This farm consists of 76,912 solar panels – each panel producing 260 watts of power – and according to Mokran it is the largest solar farm in Iran. This success shows both Iran’s potential in the global clean energy sphere, but also by contrast, the role sanctions play in the frustration of such potential.