Iran is grappling with a severe energy crisis that has already caused widespread disruption to daily life, paralyzed industries, and inflicted massive economic losses. With consecutive power outages during autumn and winter, the situation is expected to worsen significantly in the coming months. Minister of Energy Abbas Aliabadi warned on Sunday, January 5, during a meeting with parliamentarians, that the country is facing a more critical summer ahead, with an anticipated electricity deficit of 25,000 megawatts by the summer of 2025.
Aliabadi bluntly stated that “big dissatisfaction” is on the horizon, emphasizing that while people can endure winter by wearing warm clothing, surviving summer without electricity will be far more difficult. This term, “dissatisfaction,” is often used by Iranian officials to refer to the widening gap between energy production and consumption.
A Growing Energy Deficit
According to investigations by the Iranian Chamber of Commerce, the maximum daily electricity demand in the country has reached 80,000 megawatts, while the highest recorded daily electricity production stands at only 62,000 megawatts. This gap is expected to grow over time.
The imbalance between electricity supply and demand was supposed to be minimized by the end of the 7th Development Plan. However, current trends suggest otherwise. If conditions remain unfavorable, the shortfall could reach 60,000 megawatts by the end of the plan. Even in the most optimistic scenario, the deficit is projected to be 33,000 megawatts. The economic damage caused by this imbalance is staggering, with losses to Iran’s industries estimated at $20 billion.
Iran’s Fossil Fuel Dependency and Industrial Challenges
Arash Najafi, head of the Energy Commission of the Iran Chamber, pointed out that 90% of Iran’s power plants rely on fossil fuels, a significant issue for energy security. He stressed the urgent need to phase out low-efficiency power plants. Najafi also highlighted the dire state of private power plant operators, many of whom have gone bankrupt. He added that the government’s inability to manage cryptocurrency operations has exacerbated the crisis. In 2024 alone, blackouts caused losses exceeding 250 trillion tomans for the industrial sector, raising concerns about widespread “industrial bankruptcy” if the situation persists.
A report by Etemad newspaper revealed further losses caused by power outages. The daily economic damage from disruptions to electricity production, transmission, and distribution is estimated at 17 trillion tomans, with 9 trillion tomans of that total attributed to the industrial sector.
Sector-Specific Impacts of Power Outages
Electricity consumption in Iran is divided across several sectors:
Industries: 36%
Households: 31%
Agriculture: 14%
General Use: 9%
Other Uses, Exports, and Public Lighting: 9%
Despite the service sector being the largest contributor to Iran’s labor market and economy, it is relatively more resilient to power outages. Many components of the service sector can continue operating, albeit with challenges. However, the industrial sector suffers the most significant losses, particularly when considering its contribution to gross domestic product (GDP). Power outages impose a loss 3,694 times higher on the industrial sector compared to other sectors, followed by severe impacts on electricity production, transportation, and agriculture.
Key industrial losses include:
Base Metals Production: 900 billion tomans daily
Chemical Sector: 900 billion tomans daily
Non-Metallic Mining: 660 billion tomans daily
Machinery Repair and Installation: 42 billion tomans daily
The Role of Cryptocurrency Mining
One of the primary drivers of Iran’s power shortages is unregulated cryptocurrency mining. Harvik Yarijanian, head of the Tehran Chamber of Commerce’s Industries Commission, confirmed reports linking the regime’s agencies to cryptocurrency mining activities. Minister of Energy Abbas Aliabadi also acknowledged this issue, stating that electricity is being used domestically to mine cryptocurrencies, which are then sent abroad. These operations, coupled with the strain on Iran’s aging power grid, have worsened the country’s already fragile energy infrastructure.
A Bleak Outlook
Iran’s energy crisis is not only a technical issue but also a major economic and social challenge. The ongoing electricity shortages are expected to deepen, with widespread consequences for industries, households, and the broader economy. As the country braces for a critical summer in 2025, urgent action is needed to improve energy efficiency, modernize power plants, and address the root causes of the crisis, including unregulated activities like cryptocurrency mining. Without decisive steps, the economic losses and societal disruptions will only escalate, leaving Iran in an even more precarious position.
Source » iranintl