Despite sustaining significant blows to its electricity infrastructure during recent conflicts, Iran's power industry has not only recovered but has surpassed its development goals for small-scale generation plants, a senior official confirmed this week.
Abolfazl Asadi, Deputy for Planning and Economic Affairs at TAVANIR, announced that small-scale power plant capacity has reached 1,692 megawatts (MW) — a 262 MW jump from last year's 1,430 MW. This figure overshoots the Seventh National Development Plan's 2026 target of 1,635 MW, which had originally called for 200 MW of new capacity.
The achievement is particularly noteworthy given that approximately 130 MW of nominal capacity was destroyed during the recent imposed war. Through swift mobilization of available resources and close coordination with private investors, authorities managed to bring over 200 MW of new capacity online, effectively turning a wartime liability into an opportunity for expansion.
Private Sector at the Forefront
Asadi credited much of the success to aggressive private sector engagement. Over the past two years, investor-friendly policies have encouraged businesses to expand their footprint in electricity generation, with small-scale plants emerging as a preferred vehicle due to their rapid deployment, cost-effectiveness, and ability to reduce network losses while strengthening passive defense capabilities.
To sustain this momentum, TAVANIR has rolled out three distinct investment channels: the Green Board for renewables, the Free Exchange Board for thermal plants, and the Savings Board for energy efficiency projects. The latter has seen explosive growth, with contracts soaring from just 2 to 55 in 18 months — a clear signal that investors are betting big on optimization.
Market Reforms and Transparency
In a parallel push, authorities are steering electricity trading toward the Energy Exchange, where buyers and suppliers interact directly. The plan mandates that 60% of all power transactions flow through this transparent platform — a share that has been steadily climbing. "The government is gradually stepping back from direct deals," Asadi explained, noting that this shift should eventually resolve long-standing grievances over pricing and delayed payments.
Meanwhile, demand-side management remains a twin priority alongside generation growth, with large thermal plants, renewables, and small-scale facilities forming a three-pronged strategy to tackle the country's chronic power imbalance.
A Collaborative Victory
Asadi praised Oil Ministry for securing fuel supplies, the Ministry of Industry for facilitating currency allocation, and private investors for their unwavering commitment. "This collaboration turned challenges into achievements," he said, expressing confidence that Iran's electricity sector is now better positioned for future resilience.
