Abstract
This paper provides an overview of the power sector development in Iran for the period 1984–2014. A retrospective optimization approach is applied to assess economic and environmental benefits that would have been achieved through appropriate long-term planning. MESSAGE, a systems engineering optimization model, is used for this analysis. Two alternative scenarios are defined to explore the impact of supply- and demand-side strategies on the power generation mix, fuel consumption and CO2 emissions. The focus on the past choice of energy scenarios provides some insights for future scenario design. The results of the cost-optimal scenarios with international fuel prices are compared with the actual historical development. The findings indicate that the demand-side strategies are key drivers in achieving a low-carbon generation mix. Least-cost scenarios would favor much more combined cycle, renewable technologies and distributed electricity generation units, and less gas turbine than the actual transition pathway. Long-term energy planning would have reduced the cumulative total power system costs by $21-$90 billion.
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