Turkey
Major achievements
Turkey attaches great importance to the efficient and rational functioning of the energy sector for enhancing the competitiveness of the national economy. Important progress has been achieved in restructuring and liberalizing the electricity and gas markets. The efforts to liberalize the Turkish energy sector gained pace in 2001 with the enactment of the Electricity and Natural Gas Market Laws.
The new legal framework abolishes the vertically integrated State monopolies and allows private sector participation in the energy industry in Turkey, while policy-related issues fall within the responsibility of the Ministry of Energy and Natural Resources (MENR). A major institutional change has occurred with the establishment of the Energy Market Regulatory Authority (EMRA) in 2001, with administrative and financial autonomy.
Electricity and natural gas markets have been in operation since 2002.
The “Strategy Paper Concerning Electricity Market Reform and Privatization” was endorsed very recently, outlining the major steps to be taken for the smooth transition to a fully competitive market structure. Privatization of distribution assets and generation plants, transitional arrangements, security of supply and some other important aspects of the electricity market reform process are addressed for the period up to 2012.
National energy plan
The Turkish energy policy concentrates on assuring energy supply in a reliable, sufficient, and timely manner to support economic and social development. Parallel to this target, the energy policy of Turkey has the following major objectives:
• Prioritizing the energy security related activities in order to cope with increasing demand and import dependency;
• Taking into account the environmental concerns in all stages of the energy chain within the framework of sustainable development;
• Facilitating the reform and liberalization activities in the energy sector so as to increase overall productivity and efficiency and enhance transparency by creating a competitive framework;
• Intensifying energy technologies related to research and development studies and activities;
• Realizing projects regarding the transportation of hydrocarbons in the East to the developed markets in the West through the recognition of the “East-West Energy Corridor” concept.
Targets and goals
Market liberalization has improved overall economic efficiency. On the other hand, enhancing energy security and reliability within the competitive market structure is a challenge that requires determination and implementation of well-defined policy tools. Although environmental quality has been given high priority for the past few years, the financial burden incurred by the implementation of necessary measures may require more cost-effective approaches to be followed. Integrated approaches combining the achievement of economic efficiency, energy security and environmental quality in a sustainable manner have been considered in determining policies.
According to the provisions of the “Strategy Paper Concerning Electricity Market Reform and Privatization”, privatization will start with the distribution segment as distribution companies holding retail licences and operating in a liberal market will need to create confidence in investors engaging in generation activities. Privatization of this sector is expected to be completed in 2006. State-owned generation plants will then be privatized in a grouped manner so as to enhance competitiveness on the generation side of the market.
Further, Turkey is actively taking part in regional market establishment initiatives, such as the Energy Community of South-East Europe and the Med-Rind Project. These initiatives are expected to increase cross-border electricity trading and also give momentum to further liberalization efforts in Turkey, due to increased economies of scale.
Fuel use and diversification
By the end of 2003, the total installed capacity in Turkey was 35,587 MW. The majority of this installed capacity comes from hydropower, natural gas and coal resources.
Energy supply is a very important issue and remains a major concern for Turkey owing to the limited domestic availability of resources, the growing energy demand, and the high level of dependence on energy imports. Therefore, utilization of domestic energy resources and diversification of fuels is considered a high priority by the Government.
Fuel switching in the power generation mix has been significant over the past two decades, with the progressive replacement of coal-fired plants by gasfired plants. Improving the transmission and distribution of the gas infrastructure and simultaneously spreading the accessibility of gas throughout the country have been essential to this transition.
Renewable energy for power generation
A law has recently been drafted to support renewable energy based on competitive market conditions. Supporting mechanisms under this law include feed-in tariffs and purchase obligation. These mechanisms are envisaged to be applied for a certain period of time to facilitate the investments in electricity generation from renewable energy sources. The ultimate goal is to achieve more market-oriented mechanisms so as not to distort the competitive electricity market. The law is expected to contribute to the development of power plants based on renewable energy sources and utilization of domestic energy resources.
To further supplement this legal framework, a World Bank Loan of US$ 200 million is ready to be used for investment in power plants based on renewable resources.
The Electricity Market Licensing Regulation provides several incentives for generation facilities based on renewable energy resources, such as a reduction in licence fees, an exemption from licence fees for the first eight years of operation, options to wholesale to the private sector, and a degree of purchasing priority.
Efficiency measures
Efficiency measures undertaken in Turkey include introducing the Energy Efficiency Law (estimated to become legislation in 2004), establishing or tightening efficiency standards for industrial boilers and electric motors, and increasing the resources of energy efficiency organizations.
Turkey is also participating in international cooperation programmes on energy efficiency, such as efficiency standards and labels for household appliances and transport vehicles.
Other measures being investigated include developing tax reduction and investment promotion programmes for the implementation of energy efficiency programmes in industry and other sectors, and expanding energy efficiency services such as energy audits, training programmes and energy management systems.
Environmental impact
Energy related carbon dioxide emissions from Turkey were about 2.7 tons per capita in 2001. The Government attempts to minimize energy-related carbon dioxide and other greenhouse gas emissions through measures aimed at improving energy efficiency and conservation, increasing the share of renewable energy sources in its energy supply, fuel switching from high-carbon to low-carbon fuels, adopting emission reducing systems, limiting the use of energy and preventing losses in energy distribution systems.
Although Turkey is pleased to be a party to the United Nations Framework Convention on Climate Change, it has been recognized that the country is in the early stages of industrialization and is subject to different requirements than other countries under the Annex I to the Convention.
A number of other measures to improve the environmental performance of the sector are currently being implemented, largely due to Turkey’s move to harmonize its legislation to that of the European Union. These include installing and rehabilitating pollution control equipment and strengthening the resources of the Ministry of Environment and the capability of agencies responsible for inspection and enforcement of environmental legislation.
Stakeholders
• The Ministry of Energy and Natural Resources (MENR)
http://www.enerji.gov.tr• General Directorate of Energy Affairs
http://www.enerji.gov.tr• Electrical Power Resources Survey and Development Administration
http://www.eie.gov.tr• Turkish Electricity Transmission Corporation
http://www.teias.gov.tr• Electricity Generation Corporation
http://www.euas.gov.tr• Turkish Electricity Trading Company
http://www.tetas.gov.tr• Turkish Electricity Distribution Corporation (TEDAS)
http://www.tedas.gov.tr• Energy Market Regulatory Authority (EMRA)
http://www.emra.org.tr