Iran in talks with Siemens and Rolls-Royce on energy investment

• 7 years ago (2016-07-18)
• David Flin

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Iran is seeking overseas investment in its energy infrastructure following the lifting of international sanctions.

Hamid Chitchian, Energy Minister for Iran, met representatives of both companies in London to discuss collaboration in power generation technology. The talks focused on decentralised generators. Chitchian said that while no deals had been struck at the talks, Siemens and Rolls-Royce were interested, and he expected to “reach a result” soon.

Rolls-Royce said the talks involved the potential use of gas turbines and gas engines made by the group’s power systems business in Germany. It said: “The minister requested a meeting with Rolls-Royce to discuss the renewal of Iran’s energy infrastructure, and whether or gas power generation systems have a role to play.”

Siemens said: “We have a close dialogue with the Iranian government and local partners in infrastructure, energy, and technology. We have been active in Iran for about 150 years.”

Any deals would add to a provisional licensing agreement signed in March to allow the Iranian energy and infrastructure conglomerate Mapna Group to manufacture Siemens F-class gas turbines in Iran for use in power stations.

Iran needs investment to modernise and expand its power network to ensure the country has enough electricity to support economic growth. It plans to add 26,500 MW of generating capacity in the next five years, according to Chitchian. Almost 20 per cent of the new capacity will come from renewable sources.

Dalga Khatinoglu, an expert on the Iranian energy market for Natural Gas Europe, said Iran would need $15 billion of investment in new generating capacity in the next five years, and a further $5 billion in the transmission network. He said: “Iran strongly needs immediate foreign investment because the country has no choice but to boost rapidly its power generation capacity. Iran’s electricity export plunged during the past two years due to the rapid increase of domestic demand, and this summer, it faces the possibility of power outages.”