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Renewable Energy: Game-Changer in Turkish Energy Market

Renewable energy is a game-changer for the Turkish energy market driven by strong political commitment and a willingness to change the market structure, Energy and Natural Resources Deputy Minister Alparslan Bayraktar said on Thursday.

The Renewable Energy Outlook Conference: Financing, Investment, Regulation, and New Technologies in Turkey, Central Asia, Caucasus and the Western Balkans, of which Anadolu Agency is the global communication partner, kickstarted in Istanbul on Thursday, hosted by a Washington-based think tank, Atlantic Council, and the European Bank for Reconstruction and Development (EBRD). Speaking at the conference, Bayraktar hailed the success of the major transition that Turkey’s energy market has endured over the last 15 years.

"I call this Transition 1.0. We successfully completed that. It was a pure change of market structure from a vertically integrated market model, with state-owned enterprises privatized and a market model that turned into a functioning competitive market. So this was a big change, a painful change. But the government took the initiative and showed real commitment to it," he explained. He highlighted the challenges that Turkey’s energy market faces with greater demand that has led to more import dependency.

"The challenges in Turkey’s energy market are so obvious. The demand is growing in this country as well as import dependency. So the biggest challenge we are facing as energy officials and market actors here is to reduce this import dependency," he declared.

To this end, renewables, which has garnered much attention over the past 10 years, has become a necessity for the Turkish market, Bayraktar said. He added that one of the lessons that can be drawn from Turkey's experience is that political commitment is key for utilizing more renewable resources.

Bayraktar said the challenge that Turkey faced almost 10 years ago was in deciding what kind of scheme that Turkey would offer investors. From similar examples in continental Europe, the U.S and other countries, Turkey opted for a feed-in tariff scheme, he explained. Turkey launched Turkish Renewable Energy Resources Support Mechanism (YEKDEM) in 2011 to use the country's vast clean sources efficiently and support its development.

YEKDEM offers a feed-in tariff of $0.073 per kilowatt-hour (kWh) for wind and hydropower projects, $0.105 for geothermal facilities and $0.133 for solar energy and biomass geothermal plants. He elaborated that Turkey was able to find an optimal way to support renewables almost ten years ago. Bayraktar explained the change that has occurred in the market specifically with natural gas, which has seen its role diminish in just a few years. He said natural gas played a very significant role in the country and detailed that just a few years back, Turkey was producing its energy, almost 47-50%, from natural gas but last year this dropped to just an 18% share.

"I know last year we had abundant hydropower generation, maybe it is not going to be the same this year but a significant reduction came from gas power generation. So in that sense renewables and some other investments, like local coal, made the reduction in the share of gas to reasonable figures possible," he said. He cited that Turkey was able to produce 75% of its power only from renewables last June and urged that this trend continues over the next months.

 

- "Solar capacity alone has grown more than 25 times"

Defne Sadiklar Arslan, Turkey’s representative and director of the Atlantic Council in Turkey delivered the message of a rapid transition in the global energy sector over the next decade with the ramp-up of renewables. "The last decade saw $2.5 trillion of renewables investment, leading to a major jump in global renewable capacity. Solar capacity alone has grown more than 25 times over the past 10 years," Arslan noted.

He quoted figures from the International Energy Agency (IEA), which reported that Turkey's renewable energy capacity of 42 gigawatts (GW) is expected to increase by a remarkable 50% in the next four years, making Turkey one of the largest markets in the world.

- Turkey already exceeds 2023 renewables target

Nandita Parshad, managing director of the Sustainable Infrastructure Group at the EBRD, considers that the renewable energy discussion is no longer a choice but a necessity in the face of global climate change. "We think that the challenge of the climate emergency is the most urgent task we face today - the impacts are devastating," she asserted, adding that decisive action to address the issue is needed.

Parshad argued that the role of renewable energy is critical in tackling the climate crisis. "It is clear. We can no longer think of megawatts but gigawatts of clean energy. There is good news, however. The prices for renewables keep falling and in many places, the projects are built without any subsidies," she explained.

Parshad also lauded what she considers is Turkey's appropriate, renewable policy action, which has proved successful in ensuring the country has reached its 2023 target early of producing 30% of its electricity from renewable energy by the end of 2017. Frederick Kempe, president and CEO of Atlantic Council, also drew attention to the climate crisis; the effects of which he said have been very costly in monetary and environmental terms. He described 2019 as the second hottest year ever recorded at a time when globalization and electrification of everything have cemented the economy and the society dependent on rapid economic growth.

"Climate fuelled natural disasters have cost the economy almost $1 trillion over the past five years. The energy transition is driven in part by the quest to avoid these costs. So it makes great environmental sense to go in this direction and huge business sense to go in this direction," he asserted.

(Αnadolu Agency)

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