International Power Generation and Turbo Machinery Exhibition and Conference 2018

International Power Generation and Turbo Machinery Exhibition and Conference 2018

Tehran is scheduled to be host of the first International Power Generation and Turbo Machinery Exhibition and Conference, also known as IPGTEC 2018. The event will be held in Tehran International Fairground from March 2 to 5. IPGTEC is a platform in which power industry meets the flow of information on modern power generation and achieved technological advancement. It also provides an opportunity for scientific society to discuss the newest findings and promising ideas on eco-friendly approaches of power generation as well as potential challenges. For the ones who are involved in energy industries, this event is a good chance to discuss solutions for advancing future of energy in Iran and the region.
The participants of this conference are more than 100 Iranian as well as foreign companies. Italy, the Netherlands, Germany, the United Kingdom, Japan, Belgium, Taiwan and China will participate in the event to showcase their latest products and services related to turbo systems, generators and rotating machinery. It helps the businessmen to access a wealth on technological advancements on power and turbomachinery industries to drive new business and partnerships with power industry’s leaders. It’s a networking tool that enables exhibitors and delegates to search and arrange meetings either in advance or during the exhibition. Trade professionals and leaders of power industry as well as companies are the ones whom the visitors will network with at IPGTEC 2018.
There will be also several workshops on the latest trends and challenges of this industry in the region. IPGTEC workshop sessions are about Asset management in power industry, Condition monitoring and value added maintenance, Gas turbine life assessment and extension, Root cause analysis in power industry and turbomachines, OEM & non-OEM related insurance liability and risk management in power industry, etc.
Due Iran’s power generation sector is moving towards one of the world’s most modern power industries and it is one of the largest power sectors in the Middle East, with a rapid forecasted annual growth rate, attending such conference will help to grow the industry and undoubtedly these kind of specialized exhibitions are known as the most effective platform for enhanced collaboration.

Energy Department

Iran’s Exports to EU Jump 109 Percent

Iran’s Exports to EU Jump 109 Percent

Iran exported more than €8.24 billion worth of commodities to the 28 member states of the European Union during the 10 months to Oct. 31, 2017, indicating a 109% hike compared with the similar period of 2016, according to Eurostat statistics shared with Financial Tribune.
Italy, with more than €2.58 billion worth of purchases, was Iran’s main export destination over the period. The figure shows a 315% hike compared with the corresponding period of 2016.
Italy and France with over €2 billion, Spain with €1.15 billion, Greece with €1.05 billion and the Netherlands with €690.7 million worth of imports from Iran, registering a 109%, 85%, 102% and 47% year-on-year growth respectively.
Imports from the EU countries during the same period exceeded €8.4 billion, registering a 32% rise year-on-year.
A 57% rise in imports of transportation machinery and equipment, which constitute 25.5% of total imports, was the main reason behind the increase in imports.
Germany with more than €2.35 billion was the main European exporter to Iran. The figure experienced a 19.2% rise compared with last year’s similar period.
Other major exporters to Iran include Italy with €1.38 billion, France with €1.17 billion, the Netherlands with €653.6 million and Belgium with €495.2 million worth of exports to Iran, indicating a 14.5%, 119.5%, 10.5% and 33.3% year-on-year growth respectively.
As such, Iran- european union trade over the period amounted to €16.65 billion, registering a 61.6% upsurge compared with the corresponding period of last year.
The Eurostat data show Iran’s main trade partners during Jan.-Oct. 2017 were Italy with more than €3.96 billion worth of exchanges, France with €3.18 billion, Germany with €2.66 billion, Spain with €1.48 billion and the Netherlands with €1.34 billion, registering a 117%, 112%, 20%, 66% and 27% year-on-year rise respectively.
Export Department

Automobile Importation Statistics; Renault & Hyundai are in Lead

Automobile Importation Statistics; Renault & Hyundai are in Lead

In accordance with Iranian Auto Importers Association Report during the last 9 months, 55,816 automobiles with the total value of $1.47 billion have been imported into Iran indicating a 13% rise in comparison with the same period last year.
According to the latest statistics among all the imported cars, Renault and Hyundai have the largest importation share in the Iranian automobile market among foreign companies with 15,114 and 12,687 cars respectively. In this regard, Renault has increased its share 13% this year reaching 27% of the total imports. Its closest competitor i.e. Hyundai holds 23% of the market share currently, though it has lost 7% of the market.

Renault’s Lead


Renault has been successful since it has established its business in Iran in partnership with Negin Khodro and they have recently set up after-sales service centers in almost all major cities. The French carmaker also has a trilateral joint production deal with Negin Khodro and Iran’s Industrial Development and Renovation Organization.
SUV Koleos (4,387) is the most popular model of Renault’s car in Iran, followed closely by Renault’s sedan Talisman (4,161) and then subsequently Captur (3,400), Duster (1,870) and lastly the Symbol (1,274).

Hyundai Motor Decline


According to the existing statistics, Hyundai’s share has decreased to 7% and is currently around 23% meaning that the South Korean company dominance on the Iranian market has ceased. Hyundai has also an Iranian partner called Kerman Motor which is the second largest private car company in Iran.
During last the nine months 12,687 of Hyundai cars have entered Iran and Tucson is the most popular model with 4475 units. After Tucson, Santa Fe (3,618), Sonata (3,294) and Elantra (1,144) are the most popular Hyundai models

Other Automobile Companies


Two major Japanese carmakers Nissan and Toyota jointly claim the title of the third most popular imported brands, each with 9% share of the market.
KIA Motors share of the Iranian market has sharply i.e. 11% declined to 6%, pushing the South Korean firm to fourth place.
During the nine-month period, 4,306 cars produced by the South Korean firm were imported. The most popular Kia model was the mid-size crossover Sorento with 1,578 units, followed by Optima with 1,487.
SsangYong Motor with 3,578 units of its mini SUV Tivoli. The company had 6% share of the market. During the period 2,931 BMWs, 2,604 Lexus and 2,185 Mitsubishis were also imported.
Automotive Department

Mammut Khodro initiates to sale two models of Volkswagen in Iran

Mammut Khodro initiates to sale two models of Volkswagen in Iran

Mammut Khodro as the official distributor of Volkswagen started sales of two models, Tiguan and Passat, in Tehran last week. The cars found a warm welcome.
Iranian customers bought 2,000 units in less than a day, according to company officials.
The noteworthy sales by the German car-maker means it has been able to claim a 4% share of the domestic imported car market in less than a day. According to data released by Iran Auto Importers Association, close to 50,000 cars entered Iran during the nine months to Dec. 21.
VW as one of the most important automobile manufactures has recently come Iranian huge automobile market. With implementation of the nuclear deal in January 2016 and easing of economic sanctions, major international car-makers made a foray into Iran. Companies like Peugeot, Citroen, Renault, Hyundai and Mahindra forged joint production deals with local car-makers and firms like Taiwan’s Luxgen and Germany’s Borgward introduced official representatives.
VW has had an inconsistent presence in Iran. Prior to the imposition of sanctions, local automotive company Kerman Motor assembled VW’s hatchback model, the Brazilian-designed Gol. The assembly lines were shut down in 2010. Later, Mammut imported the New Beetle, Golf and Passat models, the imports were also halted later.
However, VW’s success in the market does not come as surprise. According to a survey conducted by Iran Standard and Quality Inspection Company, German cars are the most popular among Iranians. The relatively low price of VW cars compared to its German peers in Iran market has apparently given the company a competitive edge.

VW Global Sales


Since news about the company diesel emissions test cheating scandal broke in 2015, VW has been struggling to keep up its sales. The company installed secret software in vehicles in order to elude emissions tests. Better known as Diesel gate the scandal has cost VW about $30 billion.

Automotive Department

Solar Power Plants in Iran

Solar Power Plants in Iran

Renewable energies including solar energy would play an important role in future of power generation. In this regard a brief introduction on some of the legal elements of construction of solar power plants has been provided in this article. This essay does not reflect the full picture but only provides a glimpse.

A. Protective & Promotional Governmental Policy

Iran is situated in a highly suitable location for generation of power from solar energy. According to studies, 90% of the country has enough sun to generate solar power 300 days a year. To fully utilize this geographical position, the Iranian government has taken a very protective and promotional approach towards construction of solar power plants. In this regard, one of the key applicable instruments is National Instrument on Iran Energy Strategy adopted and approved by Energy Supreme Council which is headed by the Iranian president. In this instrument, paucity of renewable energy share in Iran power sector is recognized as a challenge of power sector. To overcome this challenge, it sets forward macro-objectives of power sector which includes:
• Diversification of energy resources;
• A shift from oil and gas as financial sources of budget to investment resources with emphasis on renewable resources.
To achieve such objectives, the following strategies have been designated:
• Commercialization of renewable energies’ technologies;
• Increase in share of renewable and clean energies in electricity production.

B. Feed-in Tariffs


To implement such strategies, the Renewable Energy and Energy Efficiency (SATBA) has been formed to manage and coordinates all the efforts. One of the key advantages is that the Ministry of Energy, acting through the SATBA, purchases all electricity generated from renewable sources belonging to the approved private sector projects at specific Feed-in Tariffs (FiTs). Under the current regulatory framework, developers will be granted a 20-year Power Purchase Agreement (PPA) negotiated on the basis of SATBA’s model- form. The level of FiTs available depends upon a number of factors, including project size (i.e. generating capacity) and technology-type. The Ministry of Energy determines and publishes revised FiTs (in Iranian Rial per kWh) each year. The Iranian government has endeavored to set the FiTs at a level that is designed to attract investors, both domestic and foreign and for this purpose the rate of purchased electricity from renewable sources is higher than the rate government pays to buy electricity produced by fossil fuel power generators. Current rates are as follows:
Above above 30 MW capacity *:3200 IRR per KWh
with the capacity of 30 MW and less: 4000 IRR per KWh
with the capacity of 10 MW and less:4900 IRR per KWh

* SATBA determines the maximum capacity for the large solar farms according to the total 2000 MW annual capacity development policy.

C. Practical Procedure


It is foreseen that an investor should apply for a construction permit and subsequently at the end of the process the PPA is concluded by either a newly-registered company in Iran or partnering with an existing Iranian company, subject to receiving respective permits in Iran. These extra permits include environmental permit, grid connection permit and land use permit (for state owned lands), PPA will also be signed with applicants. The detail of this summarized procedure is as follows:
• Applying for Construction Permit: At this stage, applicants should fill two worksheets and submit to Non-Governmental Partnerships Office of SATBA. This form shall be accompanied by relevant information pertaining to a developer’s technical and financial capability and general details of the proposed project, so that SATBA would be able to evaluate whether the application should proceed;

• Issuance of Grid Connection Permit: The application is forwarded to TAVANIR which is responsible for management of generation, transmission and distribution of electric power; this organization will then also analyze the applicant’s proposals and if satisfied with the proposals, approve the issuance of a Grid Connection Permit. The issuing body for plants of more than 7 MW will be the relevant regional electricity company;

• Environmental Permit and Land Right: The applicant will also need to obtain an Environmental Preservation Organization Permit from the Department of Environment. This will only be issued if such Department is satisfied that the project complies with certain environmental criteria. Where the land on which the plant is to be developed is state-owned (as is usually the case), the applicant must enter into a lease with the Land Affairs Organization of Iran;

• Concluding PPA: Once the applicant has received all the required permits, SATBA will invite it to start negotiating for a PPA. It is important to note that Construction Permits are not transferable so must be obtained in the name of the legal entity that is intended to own the plant.

D. Power Purchase Agreement Terms


Payment of the rates provided in section B is provided in the Power Purchase Agreement (PPA) of power plants for a 20-year period with the specified tariffs. This agreement starts from the signing date of the agreement which includes the progress and the construction period of power plant. It should be mentioned that a maximum delay of 9 months since the commercial operation date allows SATBA to terminate the PPA, cancel the construction permit and inform the authorities to return back the state lands which are intended for the construction of the power plant. If an agreement is terminated due to delay, the new request will be taken in to consideration after 2 years.
During the period of PPA and after that, the investor is allowed to sell electricity across the country in the form of bilateral contract, power exchange, electricity day-ahead market, or any other form approved by the Ministry of Energy. The export of electricity from clean and renewable power plants is allowed but depends upon separate permits. If such mechanisms are decided by the electricity producer, it replaces the guaranteed purchase of the electricity by the Iranian government.
Above-mentioned tariffs are multiplied based on the hourly coefficient which is announced and updated by Iran Grid Management Co. Moreover, to compensate for devaluation of money, the tariffs will be annually adjusted during the contracts based on Euro exchange rate fluctuations and internal inflation; It can be increased up to a maximum of 30% for power plants constructed, using local know-how, design and manufacturing.
The above-mentioned rates are valid for the PPAs which the power plants will be constructed and commercially operated within a maximum of 30 months for a maximum of 15 months for different types of solar power plants since the signing date of the PPA. In case of delay in finishing the project, a lower rate which is applicable to later agreement shall be applied to the previously- signed agreement. All tariffs will be multiplied by 0.7 starting from the first day of the second 10 years till the end of the contract.

E. Conclusion


The overall legal framework for construction of solar power plants in Iran is favorable for investors. There are many advantages to invest in this field but a secure position requires many legal and commercial considerations to be taken into account and this short introduction provides a glimpse and not the full picture. It is necessary to gather all relevant data and then to proceed to the project in accordance with legal advice.
Energy Department

Cooperation Agreement between Iran and India

Cooperation Agreement between Iran and India

Iran signed a 2b $ agreement for cooperation in the rail sector. In the presence of Iran’s Minister of Roads and Urban Development, Abbas Akhoundi, and his Indian counterpart Nitin Gadkari, this agreement was signed.
This agreement contains a memorandum of understanding worth $600 million for Iran. Through this MOU, Iran will be capable to purchase locomotives and freight cars from India. Furthermore, India announce its willingness to finance the purchases. This MOU was inked between the deputy for transportation planning and economics and managing director of RITES Ltd Co. RITES Ltd Co. is a government of India enterprise specialized in the field of transport infrastructure.

Project Procedure


As Iran’s Minister of Roads and Urban Development stated, both of the parties are willing to upgrade the MOU to the contract. Through this MOU Iran has this opportunity to be provided with the latest global advancements in rail industry. These new locomotives will help the transportation industry grow.
The important effect of this agreement is accelerating growth in Chabahar Port in line with India’s goal to connect to Central Asia. Ultimately Europe through this Iranian port can connect to the Asia. Iran’s only oceanic port city is Chabahar and consists of two separate ports: Shahid Kalantari and Shahid Beheshti.
The first phase of this project will commence on Dec. 3 2018 by Iran’s President Hassan Rouhani. The Capacity of Shahid Beheshti Port will be tripled to 8.5 million tons.
As the other part of this agreement, there is also the development of Chabahar-Zahedan Railroad which worth $1 billion. India has agreed to build a 500-km railroad from Chabahar to Zahedan. After connecting Chabahar to Zahedan, the railroad will be linked to Zaranj in Afghanistan.
Regarding to this Agreement, Iran is undertaken to provide land in Chabahar Special Economic Zone for Indian companies. It is a very appropriate area to establish petrochemical, fertilizer and other gas-based industries. Through the negotiation between the parties, it was announced that Chabahar-Zahedan Railroad will be completed by March 20th 2018.Finance Department