The competitiveness of wind power compared to existing methods of electricity generation in Iran

In Iran, there are more than 15,000 MW of wind power potential, but only about 90 MW have been installed since 2009. Because fuel costs are the main part of fuel-consumed power generation costs and fossil resource costs are highly subsidized in Iran, renewable energies such as wind power have yet to be fully developed. This analysis sets out to evaluate the total generating costs of wind power and conventional power plants in Iran. A levelized cost approach was conducted that included investment costs, O&M costs, fuel costs and external costs of emissions for each type of technology. Comparison of cost assessments of power generation show that by taking into account global fuel prices and incorporating air pollutant externalities, wind power can be as competitive as conventional power plants. This paper suggests that a subsidies targeting law would significantly affect the development of the Iranian wind power industry in the future.

► Although wind energy requires no fuel consumption costs, the investment costs of wind power plants are considerably higher than those for the other technologies.
► With a rapidly growing market, advancing technology and significant drops in capital requirements over time, it is expected that the competitiveness of wind power will increase over fuel-consumed power plants.
► Execution of the Economic Development Plan and increases in the prices of natural gas, mazout and gasoline could affect the attractiveness of developing wind power plants.
► Sensitivity analysis confirms when natural gas price reach about 31 cent per m3, wind plant will as the lowest-cost source of power generation among conventional power plants.
► Sensitivity analysis by changing wind plant’ capacity factor shows that wind farms with high capacity factor will have generation cost less than fossil fuel plants.