Turkey Energy Primer
The country now known as “Turkey” was founded in 1923 by Mustafa Kemal soon after the Ottoman Empire was defeated by the Anatolian clans. Mustafa Kemal ruled with authoritarian power and was instrumental in adopting political, social and legal reforms in the country. By 1950, Turkey has gone back to multi-party politics, ushering in democracy and new governance. Turkey joined the UN in 1945, the NATO in 1952 and the European Union in 2005 .
The country is situated between the Mediterranean, the Aegean and Black Seas and between Europe and Asia. As such, is it one of the richest countries in terms of energy resources. As of 2012, the country has a total installed capacity of 57,000 Megawatts (MW) with about 743 power plants in operations . Energy in Turkey, is the country’s largest private and foreign investment segment in the country.
This is coming off two fronts. Firstly, the demand for electricity in Turkey increases at a rate of 7% per year because of the population and social welfare requirements. The second is the highly available power resources in Turkey, particularly renewable energy resources. According to McBDC Business Development & Consultancy Services (2013), the installed renewable energy capacity in Turkey as of 2012 (listed below) are among the highest in all of the European Union.
- Hydroelectric Dams 19.600 MW
- Thermal power plants 35.000 MW
- Geo Thermal 162 MW
- Wind 2.260 MW
Turkey also has abundant solar and biomass potential. Turkey is reported to have an annual solar energy potential equivalent to 1.3 mega tons of oil equivalent (Mtoe) or 15,120 TWh and an annual biomass potential is projected at around 372 TWh . A lot of foreign companies are involved in renewable energy generation in Turkey including AES and General Electric from the US, the CEZ Group from Czech Republic, OMV from Australia, Italgen of Italy, EDF of the UK, and Verbubd and RWE Holding of Germany .
Many experts note that Turkey has become more dependent on addressing its energy requirements day-by-day from foreign countries despite its large energy potential and built in capacity. For example, only 28% Turkey’s energy demand is currently supplied from indigenous resources today compared to 70% in 1970 . However this could be explained by Turkey’s energy demand. In the last two years, Turkey’s demand for energy has grown faster than other countries in Europe. While the actual volume of energy required is relatively low, the pace at which it is increasing is very fast . Thus, experts believe that energy demand in Turkey wild double in the next decade, putting pressure of the private and public sector to make additional investments in energy infrastructure and generation projects.
Turkey as an Energy Conduit
Turkey’s strategic location makes in an ideal energy transit hub in Europe and Asia. As an energy transit hub, it is the natural conduit for oil and natural gas pipeline supplies coming from oil and gas rich Russia and the Middle East and into Europe. Transit of oil and gas has been through key seaborne trading vessels passing into Turkey as well with a large number of Russian and Caspian oil tankers going through the Turkish Straights and on to Europe. The country’s coastal center of Ceyhan also serves as oil export outlets for major oil producers from Iran and Azelbajian. Thus, the unique geographical position of Turkey makes it one of the most active if not critical transfer point for energy in this part of the globe . According to Krauer-Pacheco (2011), Turkey uses this energy strateger to attain its wider geopolitical objectives. Based on empirical studies in the last several decades, the author proves that the Turkey uses its geographical position and its significance as an energy transfer hub to attain favourable foreign policy objectives.
Turkey’s Renewable Energy Potential
Turkey is one of the countries in the world which has all renewable energy sources which can be tapped and distributed to meet the energy demands of the country today and until 2020. Turkey is also one of the countries in the world that has embraced renewable energy generation, making a bold statement of harnessing a lot of it to supply its projected needs. According to Kick (2011), the country’s highest renewable energy potential is solar energy in the regions of South Anatolia and the Mediterranean. The estimated potential from these areas is about 125 times the demand from for electricity in 2010. Wind potential is also large in Turkey with about 50% of the region being suitable for wind power generation. Wind power could be located in the areas of Marmara and Aegean and if tapped could produce 17% of the current demand for electricity. What is critical for wind power is the use of the right combination of wind turbines and inverters to make large wind farms economically viable. A generating scale of anywhere between 35 to 75 TWH per year is estimated to be attainable in Turkey.
Hydropower is still one of the most important energy resources of Turkey. About 74% of the country’s current power demand can be sourced from hydropower (that is an estimated 150 to 160 TWH per year). However, this resource is still utilized at less-than-optimum levels, with only about 50% of the total capacity, primarily from the Euphrates and the Tigris river, accessed.
Geothermal energy is also a large potential resource for Turkey. Located in the Alphine Himalaya Orogen belt, the total capacity is about 15 to 25 TWH per year for geothermal in this region. Biomass energy is also a large potential resource, with about 200 TWH per year potentially coming from the use of biomass resources. However unlike the other biomass resources, the technology (costs) for biomass based power is still expensive and may be less reliable compared to other renewable energy resources.
Studies indicate that producing power from these resources is already at par in terms of costs and efficiency with fossil-fuel based power. This includes not just hydropower and thermal power but also solar and wind power. In addition, the studies indicate that the cost of energy transition will not be very significant making the energy switch from conventional to renewable energy viable for Turkey in the long-run.
The Turkish government has considered these resources and believe that it is reaching its renewable energy goals by 2020. To foster more growth in this sector of energy, the government supports SMEs for generating power, improving energy efficiency and in developing new technologies for power generation. As a first push, the Turkish government utilizes funds provided to SMEs to cover the cost of preliminary studies (financial and technical viability studies). In addition, the government provides the following incentives – assurance in purchasing power, provision of a disposal rate card when selling electricity to the network, priority dispatch for power from renewable energy resources, and discounts for licensing costs for power generation less than 500 KW in capacity. That being said, the Turkish government is supportive of SMEs wanting to build renewable energy power plants to support its medium term and long-term objectives. The government expects a lot of interest in the renewable energy sector in the coming years and estimates an investment value of about 90 billion dollars until 2023 to meet the required 87,000 MW installed capacity by 2023. The government believes that it needs to allure foreign investments in renewables, which is expected to generate up to 30% of the country’s total energy demand by 2023.
Factbook, C. W. (2013). Turkey. Retrieved June 17, 2013, from https://www.cia.gov/library/publications/the-world-factbook/geos/tu.html
Kick, C. (2011, July). How is 100% Renewable Energy Possible for Turkey by 2020? Retrieved June 17, 2013, from https://www.geni.org/globalenergy/research/renewable-energy-potential-of-turkey/100-re-for-turkey-2020.pdf
Krauer-Pacheco, K. (2011, December). Turkey as a Transit Country and Energy Hub. Retrieved June 17, 2013, from ISN ETH Zurich: http://www.isn.ethz.ch/Digital-Library/Publications/Detail/?lng=en&id=141549
McBDC Business Development & Consultancy Services . (2013). Renewable Energy in Turkey. Retrieved June 17, 2013, from http://www.ice.gov.it/paesi/europa/turchia/upload/181/Renewable%20Energy%20in%20Turkey%20Report,%20Jan,%202013-1.pdf
US Energy Information Agency. (2013). Turkey Energy Facts. Retrieved June 17, 2013, from http://www.eia.gov/countries/cab.cfm?fips=TU