Iran Faces Escalating Crisis Amid Power Outages and Economic Woes

EditorAugust 26, 2024
Iran Faces Escalating Crisis Amid Power Outages and Economic Woes
As Iran grapples with mounting internal crises under the new government of Massoud Pezeshkian,

Written by
Mansoureh Galestan

As Iran grapples with mounting internal crises under the new government of Massoud Pezeshkian, a new set of challenges has emerged, casting a long shadow over the nation’s economic and social landscape. The scorching summer weeks have seen widespread power outages, water shortages, and the shutdown of various industries, sparking severe public dissatisfaction. With an already struggling economy inching closer to the brink, these issues have further strained the country’s fragile state.

The state-run news website Asr Iran reported on Saturday, August 24, detailing the impact of the power cuts: “From bakeries to factories, everyone is affected. Companies have been asked to reduce their electricity consumption by up to 90% during peak hours. A 90% reduction means shutting many production lines in a factory. The lack of electricity has also hurt other businesses. For example, bakeries suffer because dough left in the mixer sours and must be thrown away. All of this can worsen the economic situation.”

The public outcry is palpable across various regions. In Isfahan, shopkeepers voiced their frustration over the recurring power outages on August 24: “Today is also Saturday. Look, there’s no electricity in the market. Tomorrow is Arbaeen, and the market will be closed. Is it fair that we, the shopkeepers, have to deal with this power cut? Tomorrow, when it’s a holiday, they will cut our electricity. Look, we’ve been sitting here for almost two hours. We call the electricity department, and no one answers.”

Meanwhile, in the city of Mirjaveh, bakers also protested against the power cuts on August 24. One baker complained, “It’s now 11 a.m., and the power has been out without any warning. The dough is slowly spoiling. No one is accountable. I called the union, and they say it’s not their problem.”

Mustafa Rajabi Mashhadi, CEO of Iran’s state power company Tavanir, highlighted the severity of the situation. On Sunday, August 25, he told the state-run Mehr News Agency, “For 42 days, the country’s electricity demand has exceeded last year’s peak consumption.” He explained that the failure of the government to increase electricity production, combined with an unprecedented heatwave, has pushed the power deficit to 17,000 megawatts.

The electricity consumption record has already been broken amid Iran’s scorching summer. Ali Akbar Mehrabian, Minister of Energy in Ebrahim Raisi’s government, had previously noted that due to the unprecedented heat, electricity consumption in Iran increased by about 9% compared to last year. “The average growth of Iran’s electricity industry over ten years has been recorded at 4.7%; in such circumstances, it can be said that the country has experienced twice the average growth of past years this year,” he said.

The issue is not just about the heatwave. Hasanali Taghizadeh, chairman of the board of directors of the Iran Power Syndicate, recently warned that by 2035, the power imbalance could reach 37%, equivalent to one-third of the country’s electricity demand. He described this imbalance as “very dangerous,” noting that “the power imbalance this summer was 17,000 megawatts. Last year, the power imbalance was also 12,000 megawatts.”

The power deficit in Iran is not solely a result of the unprecedented heatwave but rather a consequence of chronic underinvestment in the country’s infrastructure. Much of Iran’s power grid is outdated and inefficient, leading to significant energy wastage. Years of neglect and insufficient funding have left the energy sector unable to modernize or expand its capacity to meet rising demands.

The state-run newspaper Arman Emrooz reflected the growing divide between the government and the public: “Currently, the greatest gap between the people and the government exists, and as a result, whatever the government does is practically perceived as anti-social because the grounds for public participation are blocked.”

Meanwhile, another government website, Entekhab, reported on the broader environmental crises exacerbating the situation, including drought and climate change, which have led to excessive use of groundwater resources. According to Entekhab, “The province of Golestan is on the brink of a subsidence disaster that, if it occurs, will have irreversible effects on the vital arteries and infrastructure of the province.”

Despite these dire warnings, the government continues to lay the groundwork for further austerity measures. On August 25, Masoud Pezeshkian suggested potential increases in fuel prices and further purges in government offices.

“Right now, the Ministry of Health has thousands of people who don’t work but are getting paid. They are just creating costs for us,” he said. “Who says we should spend three billion, four billion, five billion dollars to buy gasoline and then sell it at a subsidized price? What logic allows us to do this? Give us a solution. We will talk to the people. Why should I give away gasoline for free when I am buying it at a high price? There is a major imbalance in both gasoline and electricity.”

Despite his frequent warnings about the strain on the population, Massoud Pezeshkian appears to be on a path similar to his predecessors, lacking any concrete plan or initiative to address the country’s persistent economic and social crises. Throughout his electoral campaign and in the months following, Pezeshkian has repeatedly failed to present a clear strategy for tackling these overwhelming challenges. As a result, he risks repeating the same mistakes as previous leaders who ignored the suffering and frustrations of the people, ultimately leading to widespread discontent and nationwide uprisings.

EditorAugust 26, 2024
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