While industrial business owners report various negative consequences of power outages on production—such as a 50% reduction in industrial park production capacity, the shutdown of 22 cement factory kilns, the closure of many manufacturing units, and a decline in steel production—the CEO of Tavanir (Iran’s Power Generation, Transmission, and Distribution Management Company) has announced that the electricity supply-demand imbalance will worsen next year.
Reza Shahrestani, a steel producer, highlighted the dire situation of the steel industry due to energy imbalances. Speaking to Tejarat News, he stated that Turkish and Arab traders are the biggest beneficiaries of steel production in Iran. He added: “It is estimated that due to energy shortages, Iran has lost at least eight million tons of production capacity, equivalent to a $5 billion loss.”
Meanwhile, Mostafa Rajabi Mashhadi, CEO of Tavanir, announced that the 20,000-megawatt electricity shortage experienced this summer will increase to a 24,000-megawatt deficit next year.
Rajabi Mashhadi attributed the main cause of this shortage to the country’s low electricity tariffs, which he claimed have made “all types of businesses and activities economically viable” in Iran.
Ali-Asghar Ahaniha, the representative of employers in the Supreme Council, recently announced that 50% of the production capacity in industrial parks has been halted due to power outages.
Alireza Kolahi Samadi, chairman of the Industry Commission of the Iran Chamber of Commerce, told Khabar Online: “In some industrial companies, power outages have reached 50%, but this situation is not uniform across the country.”
Private sector representatives report that the damage from power outages has reached $20 billion. In this regard, the head of the National Union of Alternative Fuels and Related Services stated that power outages are causing extensive harm to industries. According to studies, last year alone, power cuts inflicted $11 billion in damages on the country.
Alireza Kolahi also commented on the losses caused by industrial shutdowns, stating: “Our conservative estimate is around 2,500 trillion rials (250 hemats, approximately $5 billion).”
Experts believe that $30 billion is needed to improve Iran’s electricity production and distribution infrastructure—provided that fuel supply issues do not arise. Analysts estimate that if a 20-year outlook is considered, this figure could reach $50 billion or more. However, at present, such investment resources are not available in Iran.
