The privatization of electricity industry with an approach based on global experience

 Majlis Research Center studied how to privatize electricity industry in Iran.
 According to the Public Relations Office, global experience of the privatization and liberalization of the electricity industry show that in 1980s and 1990s, dissatisfaction and inefficiency at the public electricity sector to provide services in this industry caused that policymakers of some countries thought to use the private sector for this industry and its related services, the office of energy, industry, and mine studies said.  Each of these countries on the one hand, according to the government structure and on the other hand economic and social status of the society to transfer public services to the private sector had a different plan, it added.  In some of these countries, including Britain’s policy of privatizing the power industry carried our quite successfully, but privatization in some countries has been faced problems (including the United States of America that led to the power outage and shortages in California). In some other countries not only the privatization has been successful, but also has been still problematic including Brazil, Argentina, and India that they have been faced many problems for this process.  
 Although Iranian power plants have been transferred quite legally but unfortunately, using the private sector for this industry not only has been viable solution but if the same procedure for continuing transfer of power would be disastrous for the Department of Energy. Its Objective evidence is the transfer of one of the Iranian power plants that after leaving, the Department of Energy is forced to buy electricity from the same power plant that 400-600 billion Rilas to be paid for per year. Before the assignment, the annual cost of the power plant has been about 100-120 billion Rials that under the law, the buyer’s private sector deposits price of purchasing the power plant to the National Treasury directly through the Privatization Organization and while the Department of Energy would be costly to purchase the produced electricity from the same power plants. In case that before leaving the power plants, production cost of per kilowatt hour has been less than 40 Rials while after transferring them the figure has been increased to 22o Rials. Obviously if this trend continuous, the Department of Energy will require more than 30000 billion Rials the budget surplus just to buy electricity from private sector power plants in next year that it is impossible, Majlis Research Center added.


Electricity, Experience, Global, Industry, Privatization