Iran's hydroelectric sector has seen an intense amount of activity in recent years. As of 2012, there are 541 large and small dams in Iran compared to 14 in 1979. The Minister of Energy, Majid Namjou, stated in September 2012 that during the 9th and 10th administrations 330 dams providing over 50 billion cubic meters (bcm) of water storage capacity had been constructed. In addition, another 63 dams with 12 bcm of water storage were under construction. A prime example of one of these new dams will be the Nemat Abad Dam on the Shabab River near Asad Abad in western Iran. This new project will be 25.5 meters high from the riverbed, and 26.3 meters from its foundations. It has a length of 633 meters and width of 8 meters. This new endeavor will add 8 million cubic meters of water to Iran's storage capacity. The project will also be used to irrigate 550 acres of land.
Iran has a long history of dam construction and irrigation projects due to its arid landscape and relatively low rate of rainfall. It has been intensifying its construction program for dams and reservoirs in recent years to tackle the issue of water shortages, improve irrigation, and provide electricity. On average, around 2 bcm of water storage are added to Iran's capacity annually. At the end of 2011, the country had a total estimated water storage capacity of 65 bcm. New projects, such as the Nemat Abad Dam, are one of the ways in which the government is adding to this capacity. The dam will cost IR200 billion to build in total. Currently, the project is 45% complete. The reason to keep building new dams is simple; according to Namjou, 100% of urban populations and 85% of rural populations now have access to safe drinking water, largely due to the completion of the dam construction program. However, dams are not just constructed to improve water supplies. Iran's hydropower production capacity has increased by 5% from 5,794 GWh in March 2011 to 6,052 GWh in March 2012. Iran has a combined total capacity of 9,246 MW, which it is constantly looking to increase.
Another significant project in Iran is the Karun-4 Dam, which at 230 meters high is Iran's tallest dam. By October 15, 2012, Karun-4 produced 2,234 GWh. In half a year the plant has produced 636,303 MWh, with a water storage capacity of 1.6 bcm. Plants such as these and the new Nemat Abad Dam are making great strides in increasing energy production, and improving water storage, as well as reducing the devastating effects of floods by controlling water flows in the country.
Another key reason behind Iran's construction of dams is providing the country with sustainable energy production. With ever-increasing energy consumption, Iran will need to satisfy this demand with sustainable projects using hydro, solar, and wind. In May 2012, President Ahmadinejad allocated $650 million from the National Development Fund to be used on renewable energy projects. The number of dams currently operational and the number of dams currently under construction shows that the hydroelectric sector is becoming an increasingly important asset for the country.