In 1963 the Iranian government created a hydroelectric management
authority. Its functions were incorporated into the Ministry of
Water and Power in 1967. The electric power industry had been
nationalized in 1965 so that a large, integrated system might
be built. In 1967 all water resources were nationalized except
generators attached to industrial plants (see Water , this ch.).
The Fourth Development Plan (1968-73) ushered in a new phase
of utility development designed to add 4,915 million cubic meters
of storage capacity for water, which in turn would generate electricity.
Projects designed under this program were completed after the
Revolution; they included dam projects in Halil Rud (Jiroft),
Shahrud (Taleghan), Lar, Minab, and Qeshlaq.
By 1972, about one-quarter of the population had electricity,
and approximately 3,218 kilometers of transmission and distribution
lines had been constructed as the start of a national system.
Two smaller, separate networks were centered on Kerman in the
south central area and Mashhad in the northeast.
During the 1960s and early 1970s, the rapid growth of manufacturing,
increasing urbanization, and the extension of electrical service
to more of the population put great pressure on planners to build
ahead of demand. They did not always succeed, even with extensive
foreign advice. For example, industrial development was temporarily
held up in the vicinity of Bandar-e Abbas because of insufficient
power, and by mid-1977 brownouts and blackouts were frequently
disrupting industry. Nevertheless, many experts favored building
a network with large, interconnected power stations rather than
the more costly and inefficient construction of separate facilities
to head off each impending local shortage. The near doubling of
investment goals for the fifth plan compounded the problem of
keeping the power supply ahead of demand, however, for it meant
a substantial increase in the number of industrial consumers.
In the 1980s, the government began to emphasize the development
of steam-powered plants, as part of a plan to reduce hydroelectric
power from 25 percent to 10 percent of available national energy
by the end of the century. Reversing this policy in the mid-1980s,
Minister of Energy Mohammad Taqi Banki stated that hydroelectric
power had once again been given priority for reasons of environmental
safety and higher productivity.
By the end of 1986, 17 dams were operating with a total energy
generation capacity of 7,000 megawatts, a 10-percent increase
over 1985. Construction on the Qom River of a US$130 million dam
with a 200- million-cubic-meter capacity was scheduled to begin
in December 1986. It would supply the northern city of Qom, seventy
kilometers away, with drinking and irrigation water. A three-megawatt
power station was planned nearby. A feasibility study for a US$1
billion hydroelectric dam on the Karun River was submitted in
early 1987. This dam, which would take 6 years to build, would
generate 800 megawatts of electricity and replace 2 other proposed
Iran's total electric power capacity was approximately 12 million
kilowatts in 1985, the most recent year for which statistics were
available in 1987. It produced almost 42 billion kilowatt-hours
in 1985, compared with 33 billion kilowatt-hours in 1983. In the
FY 1987 budget, the Ministry of Water and Power was authorized
to raise electricity rates for consumers who used more than 250
kilowatts, with a further increase for those using more than 400
kilowatts, in order to boost revenues by US$830.4 million.
The national supply of electricity dropped 40 percent in early
1986 because of Iraqi bombing of power plants. The minister of
energy announced that the shortages began in January because of
severe gas shortages at the Esfah power plants in Rey, Lowshan,
Rasht, and several other locations. Again, in December 1986, the
minister of energy announced impending power cuts as a result
of shortfalls in generation.
Iranian officials had earlier opted for nuclear power plants
to meet part of the demand for electricity, entering into discussions
with representatives from West Germany and France. The plants
under consideration were pressurized water reactors using enriched
uranium. They were to be built near the Persian Gulf because of
the need for large quantities of water for cooling. The decision
in favor of nuclear power stemmed from policy decisions to develop
non-oil energy sources.
Nuclear power was not abandoned in the 1980s. The Atomic Energy
Organization of Iran, set up in 1973 to produce nuclear energy
for electricity needs, focused in 1987 on the exploration and
use of uranium deposits and on the use of nuclear energy in industry,
agriculture, and medicine. The construction of the nuclear power
plant in Bushehr ceased in 1982 as a result of a fire in the plant;
additional damage stemmed from three Iraqi attacks in 1985 and
1986. In 1987 an Argentine-Spanish firm was negotiating to finish
construction of the nuclear power plant. Designed to have two
1,200-megawatt reactors, it was expected to take 3 years to complete.
Data as of December 1987