Blowing Hot and Cold

Turkey needs to do more to reduce its emissions. But is this coal-producing nation doing enough to develop the renewables that will increase national energy security and cut the country’s dependence on imported oil and gas?

Turkey’s increasing energy demand – rising at 4 per cent a year and therefore one of the world’s fastest growing – is highly dependent on imports, mainly oil and natural gas. Only a quarter is secured from domestic resources. While there is pressure for Turkey to become greener, the country sends out mixed messages. Its use of coal is expanding with plans for 80 new power stations, doubling its current capacity and reducing dependence on imports.

Simultaneously, at the UN Climate Change Conference, held in Katowice in December, Turkey applied to change its status from a developed to a developing country so as to be eligible for financial support to carry out initiatives to combat climate change more effectively: such a change would enable it to receive more financing to invest in solutions. As one of only a handful of countries not to ratify the Paris agreement, Turkey says that it will not do so until its status is changed. However, Turkey left Katowice disappointed with its request declined.

The Turkish government’s energy policy objectives, as stated, are: Taking into account increasing energy demand and import dependency, prioritisation among energy supply security-related activities; within the context of sustainable development, giving due consideration to environmental concerns all along the energy chain; increasing efficiency and productivity, establishing transparent and competitive market conditions through reform and liberalisation; augmenting research and development on energy technologies.

These are to be achieved through the following goals: diversification of routes and sources for imported oil and natural gas; increasing the ratio of local and renewable energy; increasing energy efficiency; and adding nuclear.

To fulfil some of these goals, supportive government mechanisms have been in place for some time. Launched in 2011, a Sustainable Energy Action Plan received subsequent EBRD support in the financing of several Turkish wind projects. Meanwhile, current Turkish energy policy is committed to rolling out the adoption of renewable energy and boosting the necessary infrastructure. There are plans to increase the share of renewable energy
resources in electricity production to at least 30% by 2023. To realise this objective, the government is in the process of implementing supportive policies, such as feed-in tariffs and investment incentives for renewable energy.

Above all, Turkey has been increasing its drive towards greater self-sufficiency. To meet itsannual 300bn KW of electricity consumption, the current energy mix is comprised: a quarter of electricity generation is hydro-based, a third comes from natural gas and another third
from coal. Targets to reduce these figures well below 30 per cent on a sustained basis have been hampered by insufficient domestic output to meet rising demand: energy imports average $55bn a year. To reduce this deficit, the Ministry of Energy and Natural Resources (MENR) plans to boost domestic energy output across the board. This follows significant energy reforms, which have resulted in much greater participation from private entities and the creation of a more competitive energy market.

However, in the short term, energy is becoming more expensive due to the economic problems arising from last year’s lira devaluation. Energy prices increased several times in 2018. The last increase in October saw electricity rates for residential consumers rise by 8 per cent and for commercial and industrial consumers by 18 per cent. Since January 2018, Turkey’s natural gas prices have increased by 29.5 and 54 per cent respectively for residential and commercial/ industrial consumers.

As one of the world’s top ten countries for coal production (mostly lignite), renewable resources and geothermal energy, Turkey’s oil and gas resources are limited – imports are a major factor in the energy current account deficit. To diversify the mix and to maximise domestic resources, a government road map has been implemented to transform thermal plants and to increase output and efficiency in coal production, which has gone from 60m to nearly 100m tons over the past five years. Hence the 80 new power stations.

Policies that are not so green are matched by those which are. Turkey's wind electricity generation hit a new daily record last September with 16.8 per cent of the country’s total power being generated from wind turbines – evidence of the increasing capacity of Turkey’s renewable energy. One windy day, however, does not mean that every day is. Incorporating wind power into existing power grids is challenging: fluctuating wind speeds and direction mean that turbines generate power inconsistently. To increase domestic electricity production and renewable energy sources, two new solar and wind projects in the Wind Energy Renewable Energy Resource Area (YEKA) have been announced while the installed capacity of hydroelectric power will be increased to 30 GW.

So will there be a sustainable shift away from non-renewables? Progress in renewableenergy as part of the mix is shifting: installed capacity of wind energy in Turkey increased from 20MW in 2002 to 4.4GW by 2015. Currently, 158 wind energy companies are operational in Turkey with 207 wind energy plants delivering 6.5GW of installed capacity, while 32 projects with 808 MW of installed capacity are being built. The potential capacity
of many existing wind power plants can be raised, according to industry experts. In total, wind provides roughly eight per cent of the country’s total installed power capacity, while wind energy accounts for 6 per cent of Turkey’s electricity production.

But further private investment is needed. Although Turkey has strong wind resources, onshore and offshore, very deep waters surrounding it demand specialist know how. Since 2006, Turkey’s wind energy sector has attracted $12.3bn in investment, according to the Turkish Wind Energy Association. Last June, MENR launched a tender: inviting applications for the construction and operation of a 1,200-MW offshore wind farm with the precise location to be determined. On completion, it will be the world’s biggest.

As originally determined by the Electricity Market and Security of Supply Strategy in 2009, several targets have been adopted to generate electricity from renewable sources. If met, these renewable energy targets will generate between 275,000 and 545,000 direct job opportunities in the energy sector. They will also enable a fossil fuel saving of approximately 790,000 tonnes of natural gas, or 464,000 cubic meters, by 2023.

As with many countries, renewable energy in Turkey has a critical role to play in shifting dependence away from fossil fuels. Although the region is strategically important for oil and natural gas producers, it is also well positioned as a diversified energy market for the future. For this reason, it is critical for Turkey to use a variety of different energy sources, ranging from imported oil and natural gas to renewables. This will ensure that supply security and continuity are maintained, as well as allowing for the further development of energy transportation projects.