Prepared by: Sahar Mozafarian of SGPM

COP 27 has reinstated the need for immediate reduction in carbon emissions worldwide. Many countries have made huge strides in transitioning to green energy, while others, such as Iran have a long road ahead. 


According to EIA, Iran has the 3rd largest oil reserves and the 2nd largest gas reserves in the world. Therefore, it comes as no surprise that the country is highly dependent on hydrocarbon for energy and foreign income generation. This, itself, has hindered plans for a fast and effective transition to green energy. At present the vast majority of electricity generation capacity is from hydrocarbon sources while only 1% from the total 87,936 MW capacity is from renewable energy sources.

Chart1 Electricity Generation Capacity per Energy Source

Source: Ministry of Energy Annual Report 1400      

Although only 933 MW of electricity generation capacity is from renewable sources, the country has the generation potential of over 100,000 MW of electricity – more than the current total of installed electricity generation – from wind and solar alone (May be a source can be mentioned, in the presentation also you mentioned numbers for growth of solar and wind with no mention of source) .

The main source of renewable electricity generation in Iran is solar with over 480 MW in 2021-2022 period under its belt. Wind stands in second place with 324 MW. Waste incinerators, small hydro-electric plants and combustion turbines account for only 124.6 MW of green energy capacity in total.

When looking into green energy capacity over the past six years, the main hike is related to solar electricity with an increase of 2.5-fold. This is due to the ease of imports for required parts, cost effectiveness and availability of land. In terms of wind generation there has been a limited increase, only 25%, with obstacles for growth that include monopoly of MAPNA over wind turbine construction, high production expenses and the lack of technology for high-capacity wind turbines.

With this in mind and following COP 21 in 2015 and Iran’s agreement to unconditionally reduce carbon emissions by 4%, the government devised its energy transition plan which included the production of 2% electricity from renewable energy sources by 2021. The government fell short of this target and blamed sanctions for this issue. Although sanction have been a major contributor to Iran’s slow progress towards green energy, mis-management, reliability on hydrocarbons, banking limitations and not prioritizing renewable energy generation are also factors that must be taken into account.


Chart2 Share of Renewable Electricity Production 2017-2022

Government aim of 2% not reached


Source: Ministry of Energy Annual Report 1400      

With 2030 fast approaching and the danger of Iran not being able to stand by its Paris Agreement pledge, the government is ramping up activities in this sector of the economy and has devised the following plans:

  • Energy intensive industries such as iron, copper and aluminum provide part of their energy from renewable sources such as solar power plant
  • Government offices and non-profit organizations to install 2,500 MW of solar power by 2025
  • Installation of 550,000 units of 5 KW solar panels in rural areas by 2027
  • 7,000 MW of solar plants and 3,000 MW of wind turbine plants to be constructed by 2025
  • Increase in the number of waste incinerators
  • Finalizing of the “Strategic Document and Road Map of the New Methods of Production, Purification, Storage and Transportation of Hydrogen Fuel”

Although these aims are highly ambitious, provided there is a suitable investment environment and priority is shifted from hydrocarbons to green energy, they could be met. In addition, the high potential Iran has in terms of hydrogen as a fuel must not be overlooked. Hydrogen as a fuel is in its infancy at present and vast amounts of investment, infrastructure changes and technology will be needed to pursue the development of this energy source in Iran. 

Sources: EIA, Ministry of Energy, SATBA, SGPM