Iran to Press Ahead with Energy Reforms as Government Seeks to Ease Power, Gas Shortages

Iran to Press Ahead with Energy Reforms as Government Seeks to Ease Power, Gas Shortages
(Sunday, August 9, 2026) 08:15

TEHRAN, August 6 (NIPNA) — Iran will continue efforts to address persistent energy shortages by expanding renewable power generation, reforming subsidies and improving the management of state-owned businesses, President Masoud Pezeshkian said.

Speaking in a televised interview on Thursday, Pezeshkian outlined the government’s economic reform agenda, identifying clean energy development, changes to the subsidy system and management reform as three main pillars of its strategy. He said the reform process had begun and would continue despite economic constraints and sanctions.

Pezeshkian said the government inherited a severe energy imbalance, with fuel reserves of about 1.2 billion liters and concerns that supplies would last only until November. Shortages of natural gas also threatened electricity generation and winter heating, he said.

The government has since worked to strengthen power plants and expand solar generation. About 7,000 megawatts of solar capacity has now been brought online, according to Pezeshkian, who said the government plans to expand clean-energy capacity beyond the 12,000 megawatts targeted under the country’s five-year development plan.

The government had initially planned to build 30,000 megawatts of solar capacity but was unable to meet that target because of challenges including the recent conflict, Pezeshkian said.

Iran is seeking to reduce its dependence on fuel for power generation while addressing both energy shortages and air pollution, he said.

The president also said power plants had come under attack during the conflict, while the country faced a daily natural-gas shortfall of about 230 million cubic meters. Despite those challenges, electricity outages were limited, he said, adding that the government was working to avoid cutting power to industrial facilities and workshops.

Planning is also underway for the winter, when Iran is expected to face a similar daily gas deficit, Pezeshkian said.

The government’s energy strategy is closely linked to broader plans to overhaul subsidies. Pezeshkian said existing subsidies for electricity, gas, water and other forms of energy disproportionately benefit higher-income households, making reform necessary to direct public resources toward those most in need.

“We have to carry out reforms,” Pezeshkian said, arguing that delays in addressing imbalances in water, electricity, gas and fuel would only make the eventual adjustment more difficult.

He acknowledged that sanctions remain a major constraint on the economy, particularly by limiting oil sales and reducing the country’s access to foreign currency. The government, he said, must find ways to minimize the impact rather than expect all economic problems to be resolved.

Pezeshkian said the broader objective of the reforms was to improve economic efficiency and ensure that public funds are distributed more equitably, while reducing waste and rent-seeking.


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