Iran has the fourth largest oil and second largest natural gas reserves. However, despite the rich hydrocarbon resources, lately, the country has shown a great interest in developing the renewable energy sector. In addition, under the Paris Agreement on climate change, Iran has made a commitment to decrease the amount of carbon dioxide (CO2) emissions by 4% using domestic investments in the amount of 17.5 million or by 12% with an aid of international investments totaling to $35 billion. In this light, Iran has to generate 7% of its electricity from renewable energy sources by 2030.
Most of the power plants in Iran are 40 years old. So, due to the outdated technologies and transmission lines electricity generated at power plants is lost despite the $30 billion spent annually to fuel the power plants (Wheeler and Desai, 2016). Nowadays, most of the plants in Iran use fossil fuels, especially natural gas. 65 billion cubic meters of gas which accounts for 93% of fossil fuels used for energy generation is to be burnt in thermal power plants in Iran in 2016. 84.8% of electricity in Iran is generated at thermal power plants and this number is not expected to decrease by 2021. Therefore, taking into account all of these issues, F-class turbines are expected to replace currently installed E-class turbines, bringing efficiency of turbines from 37.2% to 58%. Moreover, new conventional power plants are also to be built. So in the next five years 26 thousand megawatts (MW) of energy is to be generated by new power plants. Also, Iran plans to convert conventional power plants into combined-cycle power plants (CCPPs). Energy generation at CCPPs is expected to be increased by 20 thousand MW by 2030. Currently, the share of CCPPs accounts for 27%. Energy generation capacity at CCPPs is almost 20 thousand MW.