In today’s world, the energy consumption is one of the most important factors in countries’ performance evaluation because it can show the number of active production units in economies on one hand and the number of equipment and also machineries and industry-level productivity on the other hand.

To find out the countries’ consumption patterns, the energy intensity index has been introduced. The mentioned index is calculated by dividing final energy consumption of a country by its GDP in order to express the efficiency of using energy resources in countries’ production. It’s supposed to be noted that some factors such as climate and geographical conditions which are not related to the energy consumption’s efficiency can affect the foresaid index.

General energy intensity trends for OECD countries, Iran, Middle East in comparison with global average are shown in the charts below:

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Source: www.tsp-data-portal.org

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Source: www.tsp-data-portal.org

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Source: www.tsp-data-portal.org

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Source: www.tsp-data-portal.org

As It has been demonstrated, the Middle East countries especially Iran unlike the world and developed countries have increasing trend of energy intensity and also the average annual final energy consumption in this area, experience a higher level than the global average. So that, according to IEA (International Energy Agency), at the end of 2009, Iran hit the first place of energy consumption around the world which was an alarm for Iran’s authorities to control energy losses.

Energy subsidies, old machinery and equipment and energy-based industries such as aluminum, steel and cement can be pointed as the main consumers of energy in Iran.

Most of the governments enact the energy subsidies because of some important goals such as reducing inequality but in fact, this decision leads to inefficiency in resource allocation, imbalance of budget and energy trade balance. According to Eghtesadgardan website in 2014, the gap of energy price between Iran and GCC countries was about 43 Cents and the accessibility to cheaper energy resulted more contraband, wasteful energy consumption and less development investment in Iran. Bastanzad and Nili study in 2005, showed that the increase in energy subsidies didn’t lead to economy boom. The available data confirm the above research. Accordingly, Iran’s energy consumption from 1967-2012 had 3.7% annual growth while GDP grew only 2.3% annually and as a result, Iran’s energy intensity increased. Therefore, the necessity of removing energy subsidies reveal that it can lead to some difficulties such as decrease in production and households’ welfare and also increase in inflation but will have much benefits for countries in long-term periods.

In the following, the countries which have the highest level of energy intensity index in 2014 are shown:

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Source: www.tsp-data-portal.org

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Source: www.tsp-data-portal.org

Production and Consumption of Energy in Iran 

The total primary energy supply of Iran is shown in the table below in details. Based on these data, total production, import and export of energy were respectively about 2,380.8 , 76.1 and 655.1 million barrels in 2014.

Since the main primary energy carriers in Iran are oil and gas, the total primary energy supply is strongly based on them. For this reason, the share of this sector in energy loss is significant.

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*: All the units in this table are equal to million barrels crude oil
Source:www.moe.gov.ir
“*”: A few amounts
“- “: Unavailable data

After JCPOA and improvement in Iran’s international relations, it’s expected that the amount of producing primary energy carriers and therefore the supply of total primary energy will increase accordingly during the last few years.

On the other side, the information of total final energy consumption is expressed in the table below. The total final consumption was about 1,320.7 million barrels in 2014.

Studies show that the most energy consumption in developed countries is related to service sector while in undeveloped countries, the energy mainly consumed in industry sector. In support of the mentioned fact, as it’s shown in the table, industry sector is one of the largest energy consumer sectors in Iran.

According to the table, in 2014(latest available data), the wasted of energy consumption in industry sector was lower than the other sectors. It’s worth noting that food industry and brick industry by deviation of 25% and 130% with global standards are respectively the best and the worst industries in the field of energy efficiency in Iran.

 

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*: All the units in this table are equal to million barrels crude oil
Source:www.moe.gov.ir

All things considered, Iran with valuable energy reserves can become the first regional power. At the moment, one of the major barriers for Iran’s global place improvement is energy losses. In this regard, the current government has a plan to increase energy prices gradually and removing energy subsidies and this program will lead to better prospects for Iran in the future.