TURKEY: ENERGY EVOLUTION

Turkey has
become one of the fastest growing energy markets in the world in parallel to its
economic growth registered in the last eight years and is rapidly gaining a
competitive structure. The Turkish Electricity Transmission Company estimates
that Turkey’s demand for electricity will increase at an annual rate of six
percent between 2009 and 2023. The growing energy demand in Turkey is one of the
significant factors along with market liberalization and the country’s potential
role as an energy terminal in its region. These three factors play an important
role in shaping the investment opportunities in Turkey.
The increase in demand has given rise to the long-term investments made by
the private sector. At this point, the Turkish energy sector registered a rapid
growth after the liberalization of the energy market. In line with the
implementation of regulations and the high increase in demand, the electricity
market enlarged its capacity to attract investments to the market.
The Turkish government encourages investors to implement energy projects in
Turkey with new incentives on renewable energy. This ensures that the
government’s feed-in tariff will accelerate investment projects in the coming
years.
The Turkish energy market offers a wide range of activities, from crude oil
exploration to oil and petrochemical products distribution and exports, and from
electricity generation based on all known energy sources to machinery and
equipment manufacturing.
The total amount of investments to be made to meet the energy demand in
Turkey until 2023 is estimated around USD 130 billion.
Turkey functions as an important energy terminal in its region due to its
strategic location between Asia and Europe.
Turkey possesses a significant number of rivers and lakes (with
approximately 36,000 MW of energy potential), which offers ideal opportunities
for the small and large-scale energy companies.
As regards geothermal energy potential, Turkey ranks 7th in the world and
3rd in Europe. Once all planned investments in the geothermal energy sector are
made, the total value-added amount to the economy will be USD 16 billion per
annum.
With its high potential in agriculture and installed capacity in biodiesel
and bio-ethanol, Turkey can be the bio-fuel supply center of Europe.
In order to establish a common energy market with the EU, Turkey plans to
interconnect its energy system with UCTE (Union for the Coordination of
Transmission of Electricity) grid.
The government provides feed-in tariff incentives for the renewable energy
investments.
Turkey ranks 1st in the world in terms of highest growth rate in wind energy
plants and only 15 percent of its potential has been utilized up until now.


Turkey’s ambitious vision of 2023, the centennial foundation of the Republic,
envisages grandiose targets for the energy sector in Turkey. These targets
include:

125,000 MW of installed power (up from 54,423 MW in 2010)
Increasing the share of renewables to 30 percent
60,717 km of transmission lines (up from 49,104 km in 2010)
158,460 MVA of power distribution unit capacity (up from 98,996 MVA in 2010)
Decreasing electricity loss-theft to 5 percent and extending the use of
smart grids
5 billion m3 of natural gas storage capacity (up from 2.6 billion m3 in
2010)
Establishing an energy stock exchange
8 nuclear reactors with a capacity of 10,000 MW will be active
Construction of 4 nuclear reactors with a capacity of 5,000 MW
Construction of power plants with a capacity of 18,500 MW in the coal basins
Full utilization of hydropower
Increasing wind power to 20,000 MW (up from 1,694 MW in 2010)
Power plants with 600 MW geothermal, 3,000 MW solar energy