Wind Energy has a special place in the Iranian market. It’s an undiscovered market with a technical capacity of about 40 GW and very attractive priority areas of 15 GW. Despite having about twice the area of Turkey, the fact that the population of the country with almost the same means a much faster investment process for the projects to be developed.

The 3 permits you need to get to develop a wind power plant in Iran are:

  • Environmental Permit from local authorities
  • Grid Connection Permit from TAVANIR or local distributors (depends on your project size)
  • Construction permit from SATBA

Besides this, of course, the right of use of the project area must also be investor. Classically, it is possible to purchase private property through purchase, while state land can be used by long-term rental.

It is possible to say that it’s enough to have 6-9 months for the first three permits and 1-2 months for the PPA signatures. In other words, it is quite possible to make the site ready for construction within 1 year after start-up of the project.

After completing the authorization process, it is time to sign a PPA that provides 20 years’ purchase guarantee. As of today, the feed-in tariff is quite attractive, except for the domestic support contribution. Separate purchase guarantees of 3 classes are offered in Iranian Riyal (IRR), 0-1 MW, 1-50 MW and above 50 MW. With a regulatory formula, the risk of exchange for an investor who uses credit in foreign currency has been eliminated. At the same time, not only exchange rate risk but also inflation in the country, PPA is signed on the basis of the risk of this mechanism, you are allowed to assure yourself against exchange rate risk and / or inflation with a formulation. The important point here is that you can determine as an investor that you want to secure yourself against the exchange rate risk or inflation with a factor of one in this formula which will be effective on the feed-in tariff.

After signing the PPA, you have a valid 20-year purchasing guarantee and a 24-months construction period. As you may have noticed, there is a mechanism that encourages you to keep your hands on the construction phase to not spending any moment of the first 10 years which is the the most profitable period of your 20-year purchase guarantee. Because, in this 24-months period,  If you can not reach the COD of your power plant, your feed-in tariff faces the risk of updating with the current feed-in tariff which can be lower then your own, and you are given an additional 9 months to finalize your construction. If at the end of this 9 months, your power plant is still not in operation, you will be able to get all your rights back from your hand and you can not apply for a license for another 2 years.

When I talked about the previous paragraph, I talked about the most profitable period for the first 10 years, which is why the feed-in tariff for the second decade of the end of 10 years is reduced by the capacity factor of the wind power plant. In general, the more capacity you have, the more decrease of feed-in-tariff you will have.

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