Economic Analysis of Geothermal Power Generation in Iran for Private Sectors

Abstract

Based on the abundant resources of geothermal, Iran is attractive for geothermal development. A feed-in tariff is a policy mechanism designed to accelerate investment in renewable energy technologies. This policy seems to be unfavorable to attract private sector participation in Iran for geothermal energy projects. This is evident in the presence of no field developers since geothermal exploration begun in Iran. This study gives an overview of the current conditions and procedural steps for different geothermal power plants. The costs of a geothermal projects are examined, including the exploration, drilling and construction of a power plant. The state-sponsored government policies and regulations to enable private companies are investigated. To be attractive for the private sector to participate in geothermal projects, the price of electricity in Iran would need to increase, or drilling costs to be lowered and thereby be comparable to costs elsewhere in the world.