TEHRAN – Shams Pasargad Power Generation Co. has traded electricity under premium contracts on Iran Energy Exchange for the first time in the country’s power industry, Pasargad Energy Development Company (PEDC) announced.
The company has completed the country’s first premium-based power sale on Iran Energy Exchange, marking a milestone in long-term electricity trading and boosting the company’s operating profit.
Trading electricity under premium contract is recognized internationally as an advanced and transparent approach to power trading and is designed to stabilize long-term contracts and better manage price risks, according to the PEDC.
The premium model is a key innovation in electricity sales, the company’s managers said, noting that it can enhance operating profit and improve revenue predictability.
The premium contract is a type of long-term physical market agreement in which both parties commit to buying and selling a certain volume of electricity at a set time based on a final price. The final price is calculated through a base rate plus or minus a differential agreed by the parties.
Under this contract, the “premium” represents the amount or percentage added to or deducted from the base price. At the time of agreement, the buyer is required to deposit part of the transaction value as collateral with the clearinghouse, while the remaining balance is settled under the terms agreed by both sides.
Adoption of this model by Shams Pasargad Power Generation Co. is seen as a major step toward expanding electricity trading tools and advancing transparency, stability, and efficiency in the market.