Feasibility of private sector's participation in geothermal power generation in Iran

Abstract

Iran wants to become an attractive frontier market for geothermal energy projects. The government has implemented laws guaranteeing power purchase for a period of up to 20 years but it seems not to be favourable enough to attract private sector participation. This is evident in the total lack of field developers since geothermal exploration begun in the Iran. The current system is not very attractive to prospective investors due to the unfavourable rate of return on their investments. This study gives an overview of the current conditions and procedural steps. It was also carried out with the aim of finding out the challenges towards Feed-in-Tariff law instrument to promote geothermal energy in Iran. To be attractive for the private sector, the price of electricity in Iran needs to increase, or drilling costs to be lowered to a comparable level to costs elsewhere in the world.