IRANIAN ENERGY ECONOMICS
Year:2015 | Volume:4 | Issue:14|Papers Count:6

The continuous growth of electricity consumption in Iran, due to the low and unreasonable prices, has created immense pressure on the national network of supplying electricity to meet the ever-increasing demand. The realistic and economically justifiable pricing of electricity has, therefore, become an urgent issue for managing supply and demand. The residential electricity consumption in the country is one of the main sources of such demand increase. The present study focuses on the impacts of government subsidies on electricity demand and consumption for the urban and rural households in Iran. Data used for this study include price index, urban and rural household expenditures, provided by the Iranian Center for Statistics, Central Bank of Iran during the period 1991-2012. The study utilizes Almost Ideal Demand System (AIDS) and Seemingly Unrelated Regression (SUR) estimation methods for data analyses. The results show that electricity is an essential good for both urban and rural households, and as such the demand and consumption levels for both urban and rural households in the country have very little (less than one) elasticity to prices. The conclusion is that the demand levels for residential electricity consumption are not meaningfully reduced by the price increase for customers created by elimination or reductions of governmental subsidies for electricity. Therefore, pricing policies alone would not be effective to reduce residential electricity consumption in the country, and there is a need for additional and supplemental policies.

We have shown that the reliance on foreign investment within the framework of oil contracts with international oil companies has not been and will not be productive in the transfer and development of technology in Iranian upstream oil industry unless the following conditions are satisfied: i) adequate growth in the propositional and prescriptive knowledge related to oil industry to create a satisfactory absorption capacity, and ii) the active role of regulatory institutions for supervising, managing and enhancing efficiency in the market for technology to secure an effective utilization of the absorption capacity. It is emphasized that a careful identification of players in the market for oil technology transfer and development, and the realization of the processes of weakening and strengthening positions of international oil companies and service oil companies in this market, respectively, is the prerequisite in the design of optimum oil technology policies in Iran. Despite the importance of contractors in the recognition of the necessity of technological development in the chain of oil operations and conveying that to technology developers, we have noted that the scarcity of financial resources for investment in the transfer and development of technology as well as the shortcomings in the optimum utilization of the absorption capacity in Iran imply that the regulatory institutions in the market for oil technology should become more efficient and assume more active role in managing this market. It is shown that these institutions can direct the process of the transfer and development of oil technology along with the national strategies in industrial development by prioritizing the technologies which are consistent with the objectives of oil sector and at the same time having spillover effects to certain key industries in the national economy.

This paper examines the effect of the abundant natural resources (oil and gas) on financial repression and economic growth through the income distribution channel. The three equations which are extracted from theoretical explanations are estimated simultaneously using the three-stage least squares (3SLS) for the period 1352-1389. We have demonstrated the positive effects of natural resources on financial repression by raising the inequality. The results show that financial repression leads to lower economic growth rate, hence the main hypothesis of the study was supported, i.e. the effects of the abundant natural resources on economic growth and financial repression through the channel of distribution of income. We have also observed that the natural resource abundance have negative effects on economic growth (direct effect) and positive effects on inequality.

National Iranian Oil Company as the second largest oil company in the world and the biggest business complex of Iran has an undeniable importance in Iran, and its activities and management have significant impact on economic and political spheres of the country. The issue of reforming the NIOC articles of association has been a matter of discussion for years in the legislative and administration departments. The stated reasons could be the separation of state duties from the company duties, defining company’s scope of work, omission of additional advantages and adjustment with the new upstream legislations. This study is an attempt to answer the question of “what are the features and principles of a desirable NIOC articles of association?” This question is dealt with by analyzing the past NIOC articles of association as well as examining the selected similar articles of association from National Oil Companies world-wide. Based on this analysis, the acts such as concentration of NIOC on company duties and administrative affairs, not being involved in government affairs and subsequently submission of all the responsibilities and authorizations related to conservation, controlling and supervision on upstream activities to The Ministry of Petroleum are suggested to the National Iranian Oil Company. Considering the professional and business essence of NIOC responsibilities, the activities of the company must be performed in a competitive context with no specific exclusive advantage. More specifically, NIOC can succeed in a competitive environment only under the circumstances of facing the risks inherent in its activities.

Signing Oil Contracts with international oil companies for upstream and downstream operations in Iran's oil industry has a long history. After the discovery of oil, the first international oil contract was signed in Iran. Different types of oil contracts have been used in Iran. In most cases, the adequacy of contracts in terms of economic benefits has raised questions and ambiguities for Iran. To investigate this topic, the gas buyback contracts are evaluated from an economic point of view. In order to assess the results more carefully, these contracts are compared with the Production Sharing Contracts. Phases 2 and 3, and also 4 and 5 of South Pars Gas Field have been selected for this paper. Since these projects have been awarded in the form of buy-back contract, in addition of defining different scenarios, the Production Sharing Contract for the project has been simulated. After finding the best scenario in terms of the production sharing contracts for both projects, we found that for phases 2 and 3 of the South Pars, the Production Sharing Contract and for phases 4 and 5, the buyback contract, are proved to be more favorable for Iran.

Regarding the 6% annual average rate of growth in using the electricity in the country and the necessity of setting up more than 3000 MW additional power plants, it is necessary to prioritize the kind of power plant based on the range of criteria. In this study by considering the different economic, environmental, political and social and technical criteria, power security and by using the Analytical Hierarchy Process for weighing these criteria and evaluating the amount of qualitative criteria and PROMETHEE method to calculate the amount of quantitative criteria, we have evaluated and prioritized different alternatives in generating the electricity. Among the 23-criteria determined by the experts, the Levelized Cost of Energy for each KW is in the first grade, the security of securing the entrance resource is in the second grade, the initial investment is in the third grade, the effect on keeping and saving the terminable resources is in the fourth grade and the impact on the diversification of the supply system is in the fifth grade. And finally three criteria affecting on other nations (soft power), knowledge spillover and the amount of the land used for power plant can be utilized. The results of this study show that, wind, hydro-electric, photovoltaic, combined cycle, nuclear, gas and steam power plants are the priorities.