World Business and Economic Analysis
World Business and Economic Analysis
Technical and economic benefits of distributed generation for the Ministry of Energy of Iran are obvious. Therefore, in order to decentralization of power generating units, improve network reliability and increase efficiency, "Development of distributed generation project" is planned. The policy of the project to increase power generation in distribution network is incentives facilities offering to private sector. In this paper, the Ministry of Energy incentive policies are followed.
Among the various technologies of distributed generation, due to higher generation and reduce gas consumption, combined heat and power (CHP) have more appropriate economic indicators and the willingness of the private sector to invest in this project is more.
Therefore, we present an overview of the investment opportunities, government incentives and expressing examples of combined heat and power(CHP) projects, to inform investors and to achieve purposes mentioned in this plan.
Description of investment and government incentive policies
Investment overview:
Installation Combined heat and power generation (internal combustion engines, generators and heat recovery facilities).
Components of investment cost
installation initial cost
maintenance costs
Personnel / oil filter / lost revenue due to generation interruption
Government incentive policies
The advantage of investment and economic indicators
Most important advantages of investing in energy generation are Government support in providing free gas and guaranteed power purchase. The following components of income and investment cost of CHP generators have been described.
Incomes:
Sale of electricity to the grid (or sale to domestic consumption)
Depending on the efficiency between 2.57 to 3.14 cent/kWh, Electric power generators purchased and the guaranteed purchase contract will be signed to 5 years. The invoice paid by Ministry of energy in less than 15 days.
Gross income for 1 MW generator: 20,000 US$/month.
Use of generator heat in production or in reduction fuel consumption:
The use of generator heat utilizes based on potential region. Usually the heat generators used in the following processes:
Production of carbon dioxide from the generator smoke (200 kg/hour for 1 MW generator-price 114.28 US$/ton)
Production of distilled water
Cold production in absorption chiller and injection into the fridge (300 ton of refrigeration per 1 MW generator)
Heat and carbon dioxide production and injected into greenhouses to accelerate growth.
Hot water production for swimming pools and domestic consumption (70 cubic meters/hour per 1 MW generator)
Sale Emission Right:
According to the efficiency cogeneration generator, yearly 3000 tons of greenhouse gas emissions can be avoided per 1 MW installed capacity. According to Kyoto Protocol, the project as a friendly environment project registered, and based on Emission Right price in the global market (average price was 2 US$ in 2014, and Predicted be 5 to 10 US$ in 2015),is profitable up to 10 years.
Costs:
Initial costs:
Generator and grid connection equipment: 600,000 US$/MW (Stock generator: 314,000 US$/MW and Used generator with guarantee: 200,000 $/MW)
+The costs of heat recovery equipment+ Recovery of costs of land acquisition/ lease +the project registration fee as environmentally-friendly.
Monthly costs:
Fuel cost: 5,000 US$/MW (This cost is monthly statement and paid by TAVANIR, See the attached documentation)
Oil and filter cost: 1,400 US$/MW
Personnel costs (for the whole site): 3,000 US$ (This is not a separate cost for industrial sites)
Estimation of costs and revenues of the CHP system for each project according to characteristics and potential of the site is a free service of Distribution Generation Development Center.
Silencer units (reduction of noise up to 60 dB – equivalent to a car)
Summary table of costs and benefits of 1 MW generator installation:
Initial costs Revenues
New generator Stock generator Used generator with 6-month guarantee Power generation Using of heat
600,000 US$ 314,000 US$ 200,000 US$ 20,000 US$/month Depending on the application of unit is variable
Electric power generation revenue can be increased 50% by selling energy to commercial customers.
With the increase in electricity tariffs in 1394, revenue will increase.
period of return on investment (Month)
With using heat of Generator Without using heat of Generator
Using the new equipment 20 32
Using the Stock equipment 10 15
Using the Used equipment 6 10
For a Used 1 MW generator:
Investment Process
Conclusion and call for consultation
Niroo Research Institute to facilitate investment in the development of CHP generators provides all services to small-scale plants investors with the aim of increasing penetration of combined heat and power generators, increasing efficiency and peak shaving of the Network.
Issuance Agreement, construction and operation permit, obtaining permits and certificates, contract of guaranteed electric power purchasing.
Coordinate the activity of attract participation units in regional electric companies and electrical distribution companies.
Condition assessment tests, performance testing and Maintenance Planning.
Free consultation services to investors in great Tehran:
Feasibility consultation, technical-economic evaluation of projects, investment consulting.
Finding the optimal place for generator installation and heat recovery.
Introduction of qualified consultants and contractors to design and implementation of CHP units.
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Iranian trade officials are scheduled to mull trade relations with the European states in the course of their visit to Europe.
Iranian economic and trade delegation embarked on their tour to four North European countries accompanying Foreign Minister Mohammad Javad Zarif on Sunday.
Poland, Finland, Sweden and Latvia are the destinations for the Iranian trade delegation.
Head of Iran Chamber of Commerce, Industry, Mine and Agriculture Mohsen Jalalpour is among the group of 60 economic activists.
Trade with Poland stood about 400 million dollars last year, but, the capacity for cooperation is much higher than the figure and the two governments have decided to give a major boost to trade and economic cooperation.
In addition to negotiations, the Iranian delegation will attend Iranian Economic Forum with the four European states.
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Christian Benger, the regional minister of Austrian state of Carinthia for economy, agriculture and tourism, says there is high know-how technology in the fields of solar and other green energy resources as well as water management in Austria and the country is keen to help Iran in these areas.
In an interview with Iranian Media , Benger said, “There is also high know-how in Austria for recycling plastics. You have petrochemical industry and we have technology to recycle your products, so a lot of opportunities we can develop.”
The interview came on the sidelines of a meeting between Benger, heading a high-ranking trade delegation, and Masoud Khansari, the chairman of Tehran Chamber of Commerce, Industries, Mines and Agriculture.
The Austrian minister mentioned problems with the banks and money transfer as the main downside for business in Iran, while noting, “I think this will be solved in the very near future.”
Austrian banks help remove this obstacle, Benger said, adding, “Raiffeisen Bank is one of the main Austrian banks in the international business. It’s the Austrian control bank, which controls every international money transfer. This bank and all other banks are active and support resolving this problem. So, solutions will be seen in the near future.”
Elsewhere in his remarks, the Austrian official said the trade level between Iran and Austria at this point is nice, but not enough. “I think we have big opportunities on both sides, so we are here to enforce these possibilities into potentials for both sides.”
He also asserted that there is a big chance to develop tourism ties between the two countries.
‘Carinthia willing for long-term ties’
“We are eager to have long-term cooperation and investment relations with Iran,” said Jürgen Mandl, the president of Carinthia Chamber of Commerce, in the meeting.
“Carinthia is a state focusing on exports and now that the sanctions are being lifted against Iran we are focusing on this country, although our ties were never cut during the sanctions,” he noted.
He said that Iran is not their final target for exports, while they see the country also a hub for access to all countries of the region.
“Materializing all these objectives depends on the finance, so it is important for us that Austrian banks will resume ties as soon as possible”, the official further asserted.
‘Austria’s rapid action required to remove banking barriers’
Khansari, for his part, said that for creating and developing trade ties between the two countries, Austrian banks should take rapid action to remove the problems related to transfer of money between Iran and Austria.
While many European banks are still cautious to resume ties with Iran, two Austrian banks have already made relation with the country, the official highlighted.
He said five trade delegations have visited Iran in the recent months and some fruitful negotiations have been conducted between the two sides.
“Now that the sanctions are being removed against Iran, we the both sides should think about bilateral long-term investments for strengthening our trade ties,” Khansari asserted.
It is worth mentioning that at the end of the meeting, a memorandum of understanding on trade cooperation was signed between the chambers of commerce of Tehran and Carinthia.
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