Purchase price for electricity from renewables set to double

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Wind power in Iran has received a major boost with government approval of a 100% increase in the guaranteed purchase price for electricity from renewables. The tariff goes from an average of IRR 620/kWh (EUR 0.048) to IRR 1241 (EUR 0.096) over 20 years, which competes favourably with prices paid in the most dynamic markets for wind power elsewhere. Producers sell the output to the Iranian renewable energy agency, SUNA, under 20-year power purchase agreements (PPAs) on a "take-or-pay" basis: SUNA must pay for the power even if it does not take it up. At the same time, the energy ministry is working on a legal and financial framework to encourage private sector investment. Early next month, Teheran will host a conference on investment opportunities in wind energy in Iran to explore the legal, financial and practical aspects of the market. Sponsors include turbine maker Suzlon and Germanischer Lloyd, a German consultancy, alongside local company the Sadid Industrial Group, which makes blades and towers under licence from Vestas (Windpower Monthly, February 2007). To date, Iran has 120 MW of wind capacity and has signed PPAs for 420 MW, while SUNA has issued preliminary permits for 650 MW. The energy ministry estimates wind potential at 10 GW, though it could be 40 GW.

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