Iran leaping to economize $870 Bln by halving energy intensity (EXCLUSIVE)

Baku, Azerbaijan, Sept. 16

By Dalga Khatinoglu -- Trend:

A top Iranian oil official says the country needs a $200 billion investment in total to halve energy intensity by 2021.

Iran consumes about 2 billion barrels of oil equivalent (OE) annually, while more than 20 percent of that is wasted before reaching any consumer. Iran's annual final primary energy consumption stands at 1.6 billion barrels of OE, of which natural gas and fuel oils share about 67 percent and more than 33 percent respectively.

Iran's consumes 170 billion cubic meters per annum (bcm/a, as well as above 100 billion liters of liquid fuels. The country also consumed above 210 billion kWh of electricity last year, consuming 50 bcm/d of gas and 20 billion liters of liquid fuels.

Mohammad Mirzaei the head of equipment and housing sector at Fuel Conservation Organization, affiliated with Iran's oil ministry told Trend Sep.16 that Iran planned to halve energy intensity by 2021 and the required investment for this goal is estimated at $200 billion in total.

"For instance, Iran needs to attract $2 billion to optimize 600,000 engine rooms, about 80 percent of Iran's households uses heaters, while the others uses central heating system in apartments. One of our plans is optimizing the heating equipment as well as producing new heating systems with high efficiency," he said.

About 20 million heaters are active in Iran, consuming 1500 cubic meters each on average annually. Currently, engine rooms waste 50 percent of energy they receive.

According to the International Energy Agency, the energy intensity index in Iran is one of the highest in the world (twice as much as the world average) and has been increasing on average by about 3.4 percent per year over the past 40 years.

Mirzaei said that Iran is also working on combined heat and power (CHP) as well as combined cooling, heating and power (CCHP) equipments to optimize energy usage as much as possible.

Iran's agriculture, industry and housing sectors uses 3.3 times, 2 times and 1.5 times more energy compared to global averages according to Iran Fuel Conservation Organization (IFCO).

The housing sector consumes 91 bcm/a of gas as well as 70.5 billion kWh of electricity annually. Beside 20 million heaters, about 2.2 million households use central heating systems.

Housing, industrial, agriculture and transport sectors share 36 percent, 24 percent, 4 percent and 26 percent of energy consumption in Iran.

Details of contracts

Mirzaei says Iran offers buy-back contracts, the contractor should invest and complete the project and then Iran's oil ministry will pay 13 cents for economizing a cubic meter of gas in any project for 33 months at residential buildings and 22 months at official buildings. A cubic of natural gas is sold in Iran at 2.9 cents on average for the housing sector. The oil ministry secures the payments for contractors itself.

He said that Iran also plans to imports 17,000 buses and 140,000 taxis that use gas as fuel. Iran also plans to improve rail transport system to economize 13 billion liters of gas-oil consumption annually. In total, supposing a 6 percent GDP growth annually by 2021, the country would:

- Decrease 1300 million barrels of OE energy consumption in housing sector.

- Decrease 1000 million barrels of OE energy consumption in housing sector in industry sector.

- Decrease 130 million barrels of OE energy consumption in agriculture sector.

- Decrease 2000 million barrels of OE energy consumption in converting and distributing sector.

In total, Iran would economize 5 billion barrels of OE during this period. It's expected that Iran will economize $870 billion in next 15 years by halving the energy intensity by 2021.

Dalga Khatinoglu is an expert on Iran's energy sector, head of Trend Agency's Iran news service. Follow him on @dalgakhatinoglu

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