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 dams.

Iran's tc5a 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.

Laborers weigh and process jute in a small mill
Courtesy United States Information Agency

Data as of December 1987