Iran shuts banks and government institutions as temperatures soar

Banks, government institutions and financial markets across Iran will be closed on Sunday as the country endures scorching temperatures.

“With the continuing extreme, rarely seen extreme heat, and to preserve citizens’ health and manage energy usage, all government centres and banks across the country, excluding the emergency services, will be closed,” a statement from the Iranian government’s public relations office read.

Separate statements confirmed that financial markets would be closed, and some scheduled exams would not take place.

Tehran province has recorded temperatures of 43°C in the past two days, Iran’s IRNA news agency reported.

State institutions closed at 10am on Saturday to preserve energy.

Such temperatures are common in southern Iran but they are rare in the capital Tehran, which is in the north of the country.

In Isfahan in central Iran, temperatures reached 41°C on Saturday.

“It’s so hot,” one resident of the city told The National. “We are mostly staying at home. It’s hot every year at this time, but this year it’s a bit more.”

The temperatures have spurred demand for cooling. Iran has traditionally needed most gas for electricity production in winter, but the extreme heat is now leading to high demand in summer too.

“Electricity consumption is reaching its peak and for the sixth time this year we have recorded a new limit in the amount of demand,” Mohsen Zabiri, deputy director of distribution at Iran’s power generation and distribution company, told state television.

Iran produces most of its electricity through burning natural gas from its vast reserves. Consumption has reached 78,000 megawatts per hour, according to Kambiz Nazerian, head of Tehran’s electricity distribution company, quoted by Iranian media.

Electricity demand increased by more than 120 per cent between 2000 and 2021, with most energy consumed by homes and industry, according to the International Energy Agency.

“Cheap fees, illegal uses of electricity like illegal cryptocurrency mining and losses in the grid," are the main reasons for high consumption, an Iranian energy sector official told The National. “Iran has not succeeded in investing enough in its electricity generation sector due to US sanctions and low electricity prices, therefore holding little attraction for the private sector.”

In the past, the country has justified reductions in gas exports to Iraq, which it supplies with gas for power production via two pipelines, because of the need for domestic electricity generation.

Iran has been hit by the effects of climate change in recent years, with high temperatures accompanied by drought and water shortages.