Given the widespread human reliance on electrical energy and its profound integration into daily life, it would not be an exaggeration to consider it a fundamental human right. A right that governments are obligated to produce and make available to their citizens. However, in Iran, this right has often been neglected and denied for various reasons, sometimes irrelevant to the people’s will or concerns. This broader perspective frames the focus of this article.

The story of electricity in Iran dates back to 1921 (1300 SH), a time when modern life was virtually nonexistent in the country. Anything resembling modernity was often branded as heretical and against religious values. Yet, electricity made its way into Iran, initially capturing the interest of the royal court, leading to its gradual development, and eventually finding its way into people’s homes. It became a 24/7 phenomenon, indispensable for those who had tasted the comfort it brought. As dependency grew over time, electricity became essential, rendering life without it unimaginable. Efforts to ensure its continuous supply have persisted for decades. However, interruptions, whether in Iran or elsewhere in the world, have occurred for various reasons.

In Iran, electricity outages have distinct contexts. Historically, blackouts served as a defense mechanism during wartime, such as evading enemy airstrikes. Other reasons included imbalances in energy production and infrastructural deficiencies that failed to keep pace with growing demands. This is despite one of the 1979 revolution’s slogans emphasizing the provision of piped water and electricity to deprived rural areas. From the start, the Islamic Republic emphasized these promises without adequately considering infrastructural realities or execution capacities. The outbreak of the eight-year Iran-Iraq war shortly after the revolution posed a serious obstacle to the rapid fulfillment of these promises. Wartime blackouts made achieving these goals both challenging and distant.

As noted earlier, widespread blackouts began with the war in 1980 and continued until 1988 (1367 SH). However, between 1988 and 2008, Iran experienced only intermittent blackouts, such as during sudden events in 2001 and 2003. During the war, people endured blackouts in solidarity, but their continuation after the war was unjustifiable and intolerable. Following the war’s end, restoring wartime damages became a priority for electricity industry managers. Considering the scale of damage to transmission facilities and other equipment, one can imagine the immense efforts required for reconstruction. From the second half of 1988 until the end of 1991 (1370 SH), damaged units and facilities were brought back online.

After the war, the electricity industry’s activities became more organized, achieving significant progress aligned with the first and second post-revolution development plans. The extensive dam-building projects during President Akbar Hashemi Rafsanjani’s so-called Reconstruction Era ensured electricity supply and coincided with substantial investments in this sector, minimizing blackouts except under exceptional circumstances. From 2008 to 2020 (1387–1399 SH), due to increased oil revenues and investments in building new power plants, the country experienced 12 blackout-free years. However, in December 2020 (Dey 1399 SH), the specter of widespread electricity outages loomed over Iran once again.

Causes of the Crisis

The failure to make necessary investments in Iran’s electricity sector, exacerbated by Donald Trump’s withdrawal of the U.S. from the JCPOA and the consequent collapse of oil revenues, led to a production-consumption imbalance. By the end of Hassan Rouhani’s presidency, power outages were evenly distributed between urban and industrial sectors, with urban areas seemingly bearing the brunt.

Under the administration of Ebrahim Raisi, populist rhetoric without a clear vision for resolving energy issues transformed blackouts into a nightmare for Iran’s production and industry sectors. To prove that ordinary citizens would not face power outages, the administration prioritized industrial electricity cuts, choking the industrial sector to near-collapse.

Widespread Consequences

When Raisi’s short-lived administration ended, the true extent of the energy crisis—particularly in electricity—was publicly acknowledged. Scheduled blackouts returned to homes, justified by the need to keep the industrial sector running. Despite intermittent suspensions, electricity outages continue to plague both industry and residential sectors.

The root causes of this imbalance seem more tied to broader systemic issues than to consumption patterns. Without resolving sanctions or making necessary investments in the energy sector, the situation will only worsen. The most affected by these circumstances are industries and production units. Since electricity is the primary energy source for manufacturing companies, blackouts halt production lines, reduce revenues, increase production costs, cause worker layoffs, and waste valuable production time. These disruptions exacerbate social and cultural challenges.

Sudden outages damage manufacturing equipment. Power interruptions can cause malfunctions, including interference with the sinusoidal waves of machines, resulting in expensive repairs or even replacement of entire industrial units. Smaller production facilities also face product spoilage, creating waste and rework.

Interruptions in interconnected production chains can disrupt overall manufacturing processes. Even publicly traded mining companies have been adversely impacted, reflecting losses not only for individual businesses but also for national development. Larger industries like steel and petrochemicals face extensive damages; restarting furnaces alone incurs astronomical costs. According to Abdolvahab Sahlabadi, President of the House of Industry, Mines, and Trade of Iran, the damages caused by electricity outages are irreparable. He explains that production chains collapse, raw materials are wasted, workers face uncertainty, and there is no accountability for fixing electricity supply issues.

Broader Implications

The inefficiency of Iran’s electricity sector has increased costs and reduced reliability, highlighting the urgent need for infrastructure renewal. Blackouts inflict severe economic damage, with estimated annual losses of $5–8 billion to industries, contributing to greater economic instability. International sanctions and Financial Action Task Force (FATF) restrictions further limit access to investments and advanced technologies. Renewable energy sources, such as solar and wind, account for less than 0.6% of electricity production, underscoring the need for extensive investments to expand renewable capacity.

Voltage fluctuations, in addition to outages, have wreaked havoc on industrial equipment. Voltage imbalances can cause severe damage, such as overheating wires and reducing the lifespan of machinery. Reports indicate that industrial units face at least two days of power cuts weekly, with three-hour outages on other days.

Financial Toll

As announced by the head of the parliamentary Civil Commission, power outages have caused 300 trillion tomans in damages to the agricultural sector and approximately 600 trillion tomans to the industrial sector since they began.

Addressing the Crisis

The electricity imbalance in Iran is more than just a crisis; it is a super-crisis requiring not only investments and modernization but also political will to address sanctions and systemic issues. Without these, the situation will persist and worsen.

The electricity sector’s imbalance has been long foreseen. Experts warned during the Sixth Development Plan that without economic incentives for electricity production, investments would stall. This dire prediction has materialized. Meanwhile, equipment manufacturers and service providers, primarily small and medium-sized enterprises, have been sidelined, leading to an exodus of experienced companies from the sector.

The Iranian Parliament’s Research Center highlighted these challenges in its 2021 report, “Obstacles to and Support for Production in the Electricity Sector: Challenges and Solutions.” The report identifies systemic obstacles such as inconsistent interagency objectives, lack of an industrial development strategy, excessive bureaucracy, political risks, and international sanctions.

Ultimately, the challenges outlined in this report seem insurmountable under current circumstances. The Research Center listed 13 key challenges:

1. Failure to optimize and convert gas power plants to combined cycles.
2. Halt in construction of new fossil and renewable power plants.
3. Neglect in upgrading transmission and distribution systems.
4. Ineffective pricing mechanisms.
5. Inefficiencies in supplying raw materials, equipment, and fuel.
6. Lack of investor interest in the electricity sector.
7. Conflicts of interest between the Ministry of Energy and the private sector.
8. Low tariffs for imported equipment with domestic counterparts.
9. Unstable electricity export-import regulations.
10. Lack of standard testing facilities for some products.
11. Sanctions hindering exports of technical and engineering services.
12. Stagnation in the market for electricity industry equipment.
13. One-sided Ministry of Energy contracts.

References:

1. “Iran Faces Its Largest Blackouts Yet: A Historical Overview,” Hamshahri Online, November 11, 1403.
2. “Power Outages Shouldn’t Be Limited to Industry: Irreparable Losses,” Mehr News Agency, August 16, 1402.
3. “Iran’s Power Crisis Amid Sanctions: Why Isn’t Iran Fully Utilizing Solar and Wind Energy?” Asr-e Iran, November 14, 1403.
4. “Damages from Voltage Drops and Power Cuts Persist,” Donya-e-Eqtesad, December 19, 1403.
5. “900 Trillion Tomans in Damages to Agriculture and Industry Due to Power Outages,” Mehr News Agency, September 4, 1403.
6. “Rising Inflation in Electricity Production Costs,” Asr-e-Bazar News Portal, August 14, 1403.
7. “Removing Obstacles in the Electricity Sector: Challenges and Solutions,” Research Center of the Islamic Parliament of Iran, August 3, 1400.
8. Ibid.