Whither Turkey's Energy Policy?

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Turkey is an energy importer. It has a growing economy demanding about 7 % more energy each year. It has about 41,000 MW electric power generation capacity, and this capacity must be doubled in the next 10 year to meet the demand. Natural gas has a significant share in electricity production, which should be reduced. Domestic energy supplies and renewable energies should be employed in meeting increasing energy demand. Turkey has taken major steps toward liberalization of its energy market. Private enterprises are expected to invest in the energy market in a timely manner. The country also has the potential to be an "energy corridor" between the gas and oil producing countries and the importing European countries.

General Energy Consumption and Energy Sources

As the population and economy of a country grow, its energy demand also increases. The increase in the primary energy consumption of a developing country is higher than that of developed countries. This increase has been approximately 5.5 % for Turkey during recent decades. While the primary energy consumption of the world for 2006 totaled about 10878 mtep (million tons petroleum equivalent), it was about 99.8 mtep for Turkey. Turkey had to import 73 % of this energy from other countries. These numbers indicate that Turkey is an energy importing country.

By the year 2020, primary energy consumption in Turkey is expected to reach 222 mtep/year, and the preparations and energy policies suggest that 30 % of this amount is to be met by domestic sources. This means that for the next 13 years, Turkey targets a 3 % decrease in its dependence on foreign energy.

Table 1 lists the significant energy sources (except for biomass) in Turkey as of December 2006. As seen in the table, Turkey has very limited reserves of natural gas, oil, and coal. When the countries with oil and natural gas resources are listed, Turkey will not even be among the top 50 countries. The situation is not much better when it comes to coal reserves. Turkey has only 0.46 % of the world coal reserves. Solar energy and wind energy look promising; however, it will take years for solar-based electric power generation to compete with fossil-fuel-based electric power generation. A significant deal of effort must be put in the research and development of photovoltaic devices to make them competitive and to enable them to provide a true alternative to the traditional fossil-fuel sources.

Stating that Turkey is not rich in terms of energy sources would be a declaration of what is already known. Although there have been statements claiming Turkey to be an "island" on a sea of petroleum or to have unimaginably abundant coal reserves. Such statements are not based on factual evidence or research. Another potential of Turkey originates from its geographical position. It can be an "energy corridor" between the oil and natural gas producing countries and the countries that consume such commodities. This role has been integrated in the energy policy of the present government. Turkey is not rich in oil or natural gas reserves, yet it can provide safe and reliable means for the transport of oil and natural gas. The issue of energy supply is a top priority on the political agenda of most countries, and the possession of secure and reliable paths for oil and natural gas pipelines has become an asset for those who have them. As a potential energy corridor, Turkey occupies a unique position in the region.

Status of Electric Power Generation

Equally important to the energy resources a country has are the primary sources it uses for the generation of electric power. Naturally, domestic sources should be preferred. The share of domestic and renewable sources in electric power generation should be kept high without disturbing system stability. If that is not possible, aiming to keep that share high should be the emphasis of the country's energy policy. In recent years, the Turkish government has maintained such a policy. Still, capital investments and planning in the energy field must have long term time scale. Changes in the approaches and solutions, however, may not be actualized over relatively short periods of time. For instance, in a country where previous governments have signed a long term (20-25 year) natural gas purchase agreement, you may not be able to discourage the consumption of natural gas in the short term; as a matter of fact, you may have to encourage it. You may not be able to mobilize a strong coal supply over 3-5 years despite your strong desire to activate this neglected field of energy. Inclusion of such desires and tendencies in the energy policy and harvesting the fruits of such policies require much longer terms, as well as insistence on and reinforcement of such policies.

Turkey appears to have been experiencing such a short-term/long-term contradiction especially in electric power generation. In the period of last five years, the use of natural gas as the primary source of energy in electric power generation has not been encouraged. As a matter of fact, the establishment of natural-gas-fired electric power generation plants has been discouraged indirectly by the government through its encouragement of coal-fired thermal power plants, hydro-electric power plants, and other types of electric power plants energized with renewable sources such as wind and solar energy. This approach could be considered as part of the energy policy, yet its effects are not felt. Unfortunately, its effects will remain unfelt in the near future, as there is a long-term natural gas import purchase commitment, and there are some problems with coal-fired thermal plants. First, they are not operated efficiently. They are old, and their rehabilitation takes a very long time and a good deal of money. The next problem is the fact that the coal mines were basically operated by the state; private coal mining has not been encouraged to embark on such investments. At present, the private sector has about a 10 % share in the total coal that is mined in Turkey. The private coal mining enterprises have not reached a desirable level of production.

The sources that were used in electric power generation through the years 2000-2006 are given in Table 2. The shares of imported fuels are not indicated in the table.

As shown in Table 2, electric energy consumption in Turkey increased from 128,3 billion kWh in 2000 to 174,6 billion kWh in 2006 (and to 189,4 billion kWh in 2007). The increase is 36 %, averaging about 6 % per year (8,5 % for 2007). When there is no crisis or a standstill in the economy, the increase in the demand for electric power is proportional to the growth rate of the economy, reaching numbers as high as 8 %. This high rate is expected in developing economies whereas this rate tends to be much smaller for developed countries with small rates of population and economic growth. For instance, the projected increase in electricity demand in the OECD countries is an average of 1.3% per year for the period 2004-2030.

The high rate of increase in Turkish electricity demand confirms the fact that investments in electric power generation …