The private sector in the Iranian power industry started its activity in 2003 with the beginning of the restructuring process and formation of wholesale electricity market. Similar to the experience of many leading countries in the field of electricity markets, the restructuring process of power industry in Iran has primarily emphasized creating competition and establishing the rules to form a wholesale market. However, taking into account the global experience, developing the retail market and providing a right of choice to the end users is one of the basic prerequisites for achieving all the goals set for restructuring of power industry.
In Iran, the required infrastructures have been provided for the effective presence of retailers in the form of approvals of Iranian Electricity Market Regulatory Board and instructions for electricity retail. Although the instructions for electricity retail in Iran have structurally provided the possibility of retail activity and electricity sale to consumers at any voltage level and type of tariff, for numerous technical and non-technical reasons, the electricity retailers in Iran are now only allowed to supply the electricity for industrial consumers with a demand above 5 MW.
In Iran, any legal entity willing to set up a retail business must acquire an electricity retail license from the Ministry of Energy. Electricity retail companies can make a contract with power plants or purchase electricity from the energy exchange market to provide the electricity to their consumers. Given the limited scope of retail electricity activity in Iran, there is a very limited number of active companies in this field.
As an expert in power industry, I have worked in the fields of electricity generation, distribution and retail. Due to the policies of the Ministry of Energy and the beginning of the legal process of retail electricity sale in Iran and relying on scientific and experimental support in the national power industry, I established the Paak Pooyesh Persian Clean Energy Development Company in collaboration with a few experienced directors. Electricity retail activity in Iran has always been associated with challenges and I have devoted the largest part of my business activities to overcome the obstacles, and it has always been attempted to provide a structure for electricity retail companies in which they can work at all demand and voltage levels. Given the potential found in Iran as well as the macro policies considered by the Ministry of Energy, it is predicted that the rules of the Iranian electricity market will love towards providing further activity for retailers.
Despite the shortcomings in the development of the retail electricity market in Iran, Iran is a leading country in the development of electricity market rules in Western Asia. Experts, scholars, and retail companies in Iran can play a role in transferring the experiences and knowledge of retailing to other countries, particularly the neighboring countries, and also accept the experiences of leading countries in this field.
The website of Paak Pooyesh Persian Clean Energy Development Company, as the first electricity retail company in Iran, is given below.
The power industry is one of the strategic and dynamic industries, which plays a critical and pivotal role in realization of the national development plans for a country. In line with continued restructuring of Iranian power industry, the formation of the electricity market as a prerequisite for promoting competition and effective presence of the private sector was prioritized by the approvals of the Tavanir General Assembly. The Iranian electricity market began working on October 2003 by formulating and announcing the regulations for determining the method, rate, and conditions for purchase and sale in the national electricity network. In the restructured environment, various companies and organizations play a role. In recent years, some efforts have been made for activity in the private sector in the domain of power distribution.
According to Article 2 of the Executive Regulation on the Conditions and Guarantees of Electricity Purchase, the Paragraph "b" of Article 25 of the Fourth Economic, Social and Cultural Development Plan of the Islamic Republic of Iran, the power providers can supply their own electricity to their target consumers using the national electricity grid facilities. In this regard, the approvals of 138 and 146 Minutes of the Iranian Electricity Market Regulatory Board followed by the executive instructions for the Iran Grid Management have provided the legal and executive platforms required for making such contracts.
The retail companies, as one of the active elements in the restructured environment, can sell electricity in accordance to the approved instructions by receiving a retail license from the Ministry of Energy. The retail activity in Iran officially began with announcement of the first retail instruction No. 93/24967/350 on 9 August, 2014.
Currently, the legal entities can acquire the retail electricity license by referring to the Ministry of Energy. These companies can supply the electricity to the consumers by making contracts with power plants or through the Iran Energy Exchange.
• Following up and stabilizing the real position of the electricity retail in Iran through the law enforcement agencies;
• Updating the services available to the end users of electricity;
• Providing the necessary infrastructure for the entry and investment of private sector;
• Lowering unauthorized use of electricity;
• Consumer rights’ protection;
• More active presence of scattered generation resources;
• Enabling subscribers to increase efficiency;
• Competitive power supply on demand side;
• Specializing the services of cable distribution companies;
• Increasing the capital efficiency by load factor correction, reducing losses, increasing the life of equipment, lowering waste;
• More fluidity of the electricity market;
• Increased services to customers by increasing efficiency in operation;
• Adequate sensitivity of engineering and management systems to improve the service delivery indicators;
• Promoting the deployment of microgrids and virtual power plants.