Investigating and analyzing challenges of increasing share of private sector in construction and development of thermal power plants in Iran

Abstract

This article discusses the challenges faced in constructing power plants in Iran, such as the lack of government funding and technical knowledge transfer. Power plant projects have been delegated to the private sector to address these issues. However, private sector investments have plateaued, leading to potential electricity shortages in the future. The purpose of this article is to identify the obstacles encountered by the private sector and suggest policy packages to incentivize investment. This descriptive and analytical research aims to promote the contribution of the private sector to developing and building thermal power plants. The study employs a case study approach, interviews with industry experts, and content analysis of existing reports and documents. Policy recommendations are suggested based on the identified challenges and solutions. Thematic analysis is used to process the data, and reliability is guaranteed through structured processes and peer review. The findings reveal that the most significant challenges include the inability of the Ministry of Energy to fulfill the demands of private power plants, inefficient financial flow within the power industry, and non-competitive increases in the cost of establishing and operating thermal power plants. To tackle these challenges, suggested solutions include reforming the electricity tariff system for households, high-consumption (above 5 megawatts) and export-oriented industries, devising an exclusive equipment pricing system, and dissociating equipment prices in contracts.

Keywords

• energy policy
• private sector
• thermal power plant
• electricity generation
• removal of production obstacles