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Half of Iran’s industrial capacity halted by energy crisis

Dec 28, 2024, 21:50 GMT+0Updated: 11:59 GMT+0
A power plant in Iran
A power plant in Iran

Fifty percent of Iran’s industrial parks have ceased operations due to power outages, according to the employers' representative in the Supreme Labor Council, as the electricity cuts further hamper the economy.

“Several power plants are out of operation, and some industries have shut down. We faced power issues in the summer, and now in winter, we are dealing with both electricity and gas shortages,” said Ali-Asghar Ahaniha in an interview with the Revolutionary Guards-affiliated Tasnim on Saturday.

The energy crisis, marked by widespread electricity shortages and gas deficits, has disrupted industries across the country. Aging infrastructure, international sanctions, and poor management have compounded the problem, leading to the shutdown of approximately 80 power plants.

During the winter, Iran faces a daily shortfall of at least 260 million cubic meters of gas, further straining the electricity supply.

Iran has vast oil and gas reserves, much of which it cannot tap due to US-led sanctions which stall investment and technology improvement.

Ahaniha highlighted the strain caused by the crisis, noting employers are under immense pressure during the year-end period due to bonuses and additional costs.

“In a year dubbed the 'Year of Production Leap,' the lifeline of production and industry must be preserved. When the wheels of industry turn, employment and people's income flourish,” he said, criticizing the ministry of energy for prioritizing residential consumption over industrial needs.

The crisis has caused significant losses in industrial regions, where power cuts have resulted in damages amounting to hundreds of billions of rials. Ahaniha also criticized recent electricity and gas price hikes, arguing that industries have filed complaints against the ministry of energy, saying the increases were unlawful.

Iran’s electricity shortage was estimated at 14,000 megawatts during the summer. Heavy state subsidies have encouraged inefficient energy consumption, while geopolitical tensions and sanctions have hindered infrastructure investments.

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