Farhad Shahroki, the first vice president of the Energy Commission of the Islamic Consultative Assembly, elaborated on the philosophy behind the establishment of the "Energy Optimization and Strategic Management Organization." This organization is considered a reformative entity on the demand side, aiming to convert "savings" into an economic and tradable activity.
Architecture of Article 46 of the Seventh Development Plan
The answer to the question of how savings can be transformed into an economic activity lies in the architecture of Article 46 of the Seventh Development Plan. This article introduces the "Optimization Account, Fund, Savings Certificates, and Contracts with Investors." The economic logic of this architecture can be summarized as follows: unused energy, if real and verifiable, should hold the same economic value as produced energy.
Read more: Increase in gas prices in Europe due to disruption in Qatar's LNG supply
The law has established the "Energy Consumption Optimization Account" at the Treasury of the country to facilitate the formation of the optimization market, with specific resources allocated for it. This account should not be considered a regular budget line, and the use of its resources for other purposes is prohibited.
Role of the Energy Consumption Optimization Fund
Alongside the Optimization Account, the "Energy Consumption Optimization Fund" is also part of the organization's architecture. The fund's responsibility should be to reduce risk and leverage resources. If the fund engages one rial of public resources, it must be examined how much banking facilities and private sector capital this one rial has activated.
One of the key performance indicators of the fund will be the "leverage ratio," which indicates the amount of capital mobilized for projects compared to the public resources engaged. This model allows the government to cover part of the risk instead of paying the entire project cost, facilitating the entry of multiple investments.
Savings certificates, as an economic asset, can lead to the entry of banks, investors, and the capital market into the productivity sector. However, the credibility of the market will be maintained only if the certificates represent real savings.
Ultimately, a fundamental shift towards payment for "results" instead of payment for "actions" is essential. Instead of paying for equipment installation, the government should make payments based on actual and verifiable results. This change can enhance competition and innovation and give more value to energy optimization as an economic asset.
Read more: Saeed Tavakoli: Supplying household gas is our red line · Ali Asghar Tahmasbi: All agencies must work to get through winter and manage energy imbalance
