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Iran's breakthrough in power generation amid critical supply imbalance

Iran Press TV

Thursday, 21 August 2025 2:36 PM

Iran's unveiling of the MGT-75 gas turbine marks a significant milestone not only in its energy sector but also in the broader economic landscape, signaling a pivotal shift toward technological self-reliance and enhanced energy security.

This development emerges amid a challenging geopolitical environment marked by intensified sanctions and economic pressures, positioning the MGT-75 as a linchpin in Iran's efforts to circumvent external constraints and foster sustainable economic growth.

The MGT-75 turbine represents a convergence of decades-long ambitions, technical know-how, and strategic determination to reduce dependency on foreign technology and imports. Its introduction is a strong statement of national capability and economic resilience in the face of geopolitical headwinds.

The MGT-75, a domestically developed gas turbine, represents more than an engineering achievement; it embodies Iran's strategic pursuit of technological sovereignty in a sector traditionally dominated by multinational corporations from the US, Germany, Japan, and Russia.

The original collaboration agreement signed in 2015 between Iran's MAPNA Group and Germany's Siemens to acquire and localize Class F turbine technology was abruptly disrupted by escalating US sanctions, compelling Iran to accelerate its indigenous development pathway.

This disruption, while initially a setback, galvanized Iranian industry and policymakers to double down on their efforts to create a fully self-reliant domestic supply chain for these advanced technologies.

This enforced pivot away from foreign dependency has substantial economic ramifications. By substituting imported turbines with homegrown alternatives, Iran dramatically reduces its foreign exchange outflows.

Importing energy infrastructure technology is notoriously capital intensive, with an estimated cost of approximately one million USD per megawatt of installed capacity.

For a country aiming to add 10,000 MW to its grid, the cumulative import bill could reach billions of dollars. Domestic production of the MGT-75 thereby liberates substantial financial resources, which can be reallocated to other critical sectors, reinforcing economic resilience under sanctions.

This is not just a matter of cost savings; it represents a strategic reallocation of scarce foreign currency reserves that are crucial in an economy constrained by international financial restrictions.

Iran's electricity sector currently grapples with a supply-demand imbalance estimated at 15,000 MW during peak consumption periods. This gap, exacerbated by constrained investment and the long gestation period for new power plants, threatens industrial productivity and economic stability.

The MGT-75, capable of generating between 190 to 220 MW in simple cycle operation, offers a timely solution to augment generation capacity efficiently.

Its deployment can partially mitigate the pressing risk of power shortages that have historically hampered economic activities, leading to reduced industrial output and affecting millions of consumers.

By enabling a more reliable electricity supply, the turbine supports not only the manufacturing and service sectors but also crucial social infrastructure such as hospitals and schools.

Replacing outdated turbines with MGT-75 units not only increases power output but also improves operational efficiency, reducing fuel consumption and emissions.

This efficiency gain translates into lower operational costs, strengthening the financial viability of the power sector.

Additionally, the turbine's adaptability to hydrogen fuel signals Iran's entry into cleaner energy technologies, aligning with global decarbonization trends and opening potential future revenue streams from green energy exports.

The broader economic implications extend beyond cost savings. The domestic development and production of advanced turbines stimulate job creation directly within manufacturing and indirectly through supply chains.

This employment growth enhances household incomes, drives consumption, and fosters a virtuous cycle supporting domestic demand.

Moreover, the MGT-75 positions Iran as a potential exporter of advanced energy technology within the region and beyond. Regional markets in West and Central Asia, often characterized by energy deficits and heavy reliance on imports, represent promising destinations for Iran's energy products.

Exporting the MGT-75 could generate stable foreign currency inflows, diversifying Iran's export base away from volatile oil revenues and contributing to economic stability.

By developing export capabilities, Iran also leverages geopolitical influence in energy-dependent neighboring countries, potentially strengthening economic and diplomatic ties. The move toward exporting high-tech energy equipment thus holds not only economic but also significant geopolitical value.

Iran's success in indigenous turbine manufacturing underlines an important narrative of economic resilience amid sanctions.

By reducing technological dependence on sanctioned countries, Iran mitigates the efficacy of economic pressure. This strategic autonomy strengthens Iran's bargaining power in geopolitical negotiations, allowing the country to assert greater control over its energy resources and infrastructure.

Furthermore, reducing the impact of sanctions on critical infrastructure investment helps avoid economic disruptions.

Energy security is foundational for economic growth, and consistent electricity supply underpins industrial productivity, commercial activities, and social welfare.

The MGT-75's contribution to national energy security is thus a vital pillar for sustained macroeconomic stability.

Its spillover effect contributes to the diversification and modernization of Iran's industrial base, enhancing its resilience against external shocks and fostering a knowledge-based economy.

Furthermore, the technology transfer and adaptation involved in this process provide a foundation for future innovations and upgrades, positioning Iran's energy sector to adapt to evolving technological trends.

In sum, the introduction of the MGT-75 gas turbine marks a transformative step for Iran's energy and economic sectors.

It showcases a successful adaptation to external pressures, turning the challenge of sanctions into an opportunity for technological advancement, economic savings, job creation, and potential export growth.