A Study on The Near Future of Wind Power Development in Iran a System Dynamics Approach Seyed Hossein Hosseini Hamed Shakouri G. Roozbeh Akhlaghi s.h.hosseini@ut.ac.ir PhD Candidate hshakouri@ut.ac.ir Associate Professor r.akhlaghi.f@ut.ac.ir Graduate Student Department of Industrial Engineering, College of Engineering, University of Tehran Abstract—in order to explain current condition as well as future trends of power market in Iran by a system dynamics methodology, a model is developed. In the model, various supportive tools such as subsidy for guaranteed wind power purchasing, tax of pollutant spread and Renewable Energy Corporation (REC) certificate are included. Other items such as advertisement and learning effects and concerns about environment, to increase making investment in wind power generation, are presented. In this model different policies, so as to develop wind power generation can be examined and results of each one can be reviewed. As an especial case in this research, results of a supportive policy package are looked over and are compared with the case before executing the policy. As executing the policy, demands of private sector for constructing power plant have been increased approximately to 6-fold and number of installed power plants have been increased approximately to 20- fold and therefore profit making will increase to more than 10- fold. Keywords- Iran; renewable energy development; wind power; system dynamics I. INTRODUCTION There is no doubt about the role of energy in developing economies in countries and welfare of human societies. Particularly, electric energy has a critical role in house equipment, services and production. Thus developing societies, demand for electric energy increasingly, which according to the forecast of International Energy Agency (IEA) will hit 32922w by 2035, approximately duplicated in comparison to 2008 [1]. Demand for electric power in Iran is increasing with respect to developing and population. Therefore to procure the demand, a solution must be found. Considering abundance of fossil resources in Iran, about 90% of demand is supplied by fossil fuel power plants [1]. Regarding that these resources will finish soon or late and also environmental pollution of applying them (registration of Iran in Kyoto agreement) renewable resources can be considered as suitable alternatives for them. The most used renewable resources are: solar, wind, watery, biomass, biogas, and geothermal. Wind power generating, regarding its low cost is more attended in the World in comparison with other methods [2]. Having 15GW wind potential, (about 35% of current consumption all over Iran) Iran has a relative excellence in order to use wind power [3]. At the present time, it is still cheaper to use fossil resources in order to generate than wind, but considering the elimination of subsidy of fuel, fuel price growth rate, decreasing price of wind power plant equipment and governmental policies in order to develop renewable power generating such as guaranteed renewable power purchase policy and paying subsidy to sporadic power generators policy which is presented in the article no. 133 of the fifth development plan law [4], where 5 GW of wind plus solar power is desired to be established in the next 5 years, it is expected that wind power surpass fossil power in near future. As another characteristic of wind technology, one can mention applying it as depended on global network and independent. This characteristic can be used for electrification to far regions without additional cost in order to develop transfer lines and thus there will be save in costs. In accordance with EIA in 2009, power generations in Iran is approximately 186 TWh in which 180 TWh is generated by fossil generators, 5.8 TWh is generated by hydro turbines and only 0.2 TWh is generated by wind [5]. This item indicates to inadequate attention to wind power in Iran and on the other hand indicates to abundant vacuums for investment. In this research, modeling Iran wind power generating industry in relation with fossil power, we are to prepare investigation about oncoming wind power industry in Iran with respect to various policies for policy makers and investors. Dependence of economy on energy sector, complicated technologies in energy field and their rapid changes, environmental and social effects and increasing investment so as to develop energy sector made energy sector complicated. Thus, it is necessary to have an integrated and comprehensive approach in order to review and study energy sector and complicated relations in this sector. Considering the regarded sector as a system with internal and external transactions with environment, systematic attitude is an appropriate tool to analyze such system. For relations among different sectors of a system, it is necessary that members try to understand system behavior with systematic attitude. This understanding can only be achieved by study and knowing all components and the relations among them in a system [6].In relation to applying systematic tool and specially system dynamics, we can refer to a research which is done by Vogstad et.al. in 2002. He studied short term and long term effects of power market in order to find an optimal policy to move from fossil power generation to renewable systems