The new Iran Power Report from BMI forecasts that the country will account for 16.31% of Middle Eastand Africa (MEA) regional power generation by 2013. BMI’s MEA power generation estimate for 2008is 1,200 terawatt hours (TWh), representing an increase of 6.1% over the previous year. We areforecasting an increase in regional generation to 1,561TWh by 2013, representing a rise of 30.14%between 2008 and the end of the period.
MEA thermal power generation in 2008 is estimated by BMI at 1,135TWh, accounting for 94.6% of thetotal electricity supplied in the region. Our forecast for 2013 is 1,453TWh, implying 37.59% growth thatreduces slightly the market share of thermal generation to 93.1% - thanks in part to environmentalconcerns that should be promoting renewables, hydro-electricity and nuclear generation. Iran’s thermalgeneration in 2008 was around 198TWh, or 17.45% of the regional total. By 2013, the country isexpected to account for 15.74% of regional thermal generation.
For Iran, gas was the dominant fuel in 2008, accounting for 55.1% of primary energy demand (PED),followed by oil at 43.3% and hydro with a 0.9% share of PED. Regional energy demand is forecast toreach 887.6mn tonnes of oil equivalent (toe) by 2013, representing 20.7% growth over the period since2008. Iran’s 2008 market share of 26.10% is set to remain around this level to 2013. Iran’s nucleardemand is forecast to reach 8TWh by 2013, with its share of the MEA nuclear market rising to 32.0%.
Iran is now ranked fourth in BMI’s updated Power Business Environment rating. This reflects its marketsize and relatively high proportion of renewables (hydro-power) use. The power sector is not competitive,with no appreciable progress towards privatisation. The regulatory environment is unattractive and therisk outlook is suffering thanks to the controversy over the country’s nuclear energy programme. We seescope for a reduced score and a drop down the rankings during the next few quarters.
BMI is now forecasting real GDP growth for Iran averaging 3.24% per annum between 2009-2013, withthe 2009 growth estimate being 1.40%. The population is expected to expand from 72.2mn to 77.2mnover the period, with GDP per capita and electricity consumption per capita forecast to increase 33% and17%, respectively. The country’s power consumption is expected to increase from an estimated 182TWhin 2008 to 228TWh by the end of the forecast period, providing export potential rising from an estimated24TWh in 2008 to 27TWh in 2013, assuming 4.5% annual growth in electricity generation. Losses duringpower transmission and distribution mean that the actual level of Iranian power exports is well below thetheoretical surplus, but is set to rise.
Between 2008 and 2018, we are forecasting an increase in Iranian electricity generation of 47.3%, whichis near the middle of the range for the MEA region. This equates to 19.3% in the 2013-2018 period, downfrom 23.4% in 2008-2013. PED growth is set to decrease from 20.5% in 2008-2013 to 16.7%,representing 40.7% for the entire forecast period. The availability from 2010 of nuclear power is one keyelement of generation growth. Thermal power generation is forecast to rise by 37.3% between 2008 and2018. More details of the longer-term BMI power forecasts can be found later in this report.
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