Energy concerns sap the strength of Turkey’s economy and the annual import bill for oil and gas constitutes around half the nation’s deficit. The country has virtually no fuel supplies of its own, can’t do without it, has unreliable external suppliers and is feeling the financial strain. Durmus Yilmaz, governor of the Turkish Central Bank, told Oxford Business Group (OBG) that the country spends around $40 billion per year buying energy.
As bad as the cost are the problems related to security of supply. Russia, in the form of Gazprom, is showing itself increasingly prone to use energy supplies as a political weapon and Iran simply turns off the natural gas tap when its own needs outstrip those of its customers. The answer, Turkey has decided, is to switch to renewable sources in a big, big way. There are some who see the country as being totally self-sufficient through these kinds of energy — and that may not be as outrageous as it sounds.
Paris-based Akuo Energy has already announced it would be launching Turkey’s largest ever wind farm project under the aegis of its local subsidiary, Perfect Wind Enerji. The 150 megawatt (MW) plant could be open next year if all goes according to plan. Perfect Wind received a license from the Turkish Energy Market Regulatory Authority (EPDK) for the construction of the wind farm in Kirsehir province in central Anatolia.
According to Akuo, the complex could generate some 487.5 gigawatt hours (GWh) of electricity. The French firm is expecting to put some $308 million towards developing the plant as part of a total $2.2 billion investment in renewable energy in Turkey over the next five years.
In April, local energy and construction outfit Ataseven Group signed a joint venture agreement with Germany’s Epuron, which has interests in developing and financing renewable energy projects, for the construction of ten wind power plants in Turkey. The pair is currently awaiting legal approval from the EPDK, which should come through over the next year. Once this has been completed, construction on plants in Izmir, the country’s third city, on the Aegean coast, Balikesir and Bursa, in the northeast of the country, and Manisa, in the west, can commence.
Taping all the sources
According to World Wind Energy Association Vice President Tanay Sidki Uyar, Turkey could be self-sufficient in energy if it harnessed several renewable sources including wind, solar, hydroelectric and geothermal power.
“Wind power could supply Turkey’s electricity needs twice over within five to 10 years if the government had the political will to develop this sector,” Uyar said, “We have terrific geographic conditions for solar and wind power in Turkey. Exploiting it is already economically and technically possible but the problem is that the government favors fossil fuels and nuclear energy.” The government’s priorities, though, are shifting towards cleaner, renewable power, which will account for a large share of the estimated $130 billion being invested in the Turkish energy sector up to 2020.
The Akuo development is the latest sign of Turkey’s potential as a power generation center and the opportunities offered by wind power in particular. A May 2008 report by the Global Wind Energy Council rated Turkey as one of Europe’s strongest prospective markets for wind power. Wind speeds on the coast and in the Anatolian plateau are high on a regular basis. Turbines in areas with erratic wind conditions can occasionally consume electricity to keep them turning — something that should be a rarity on the windswept Anatolian plateau.
The strength of the domestic market and those around it also makes Turkey a natural energy hub. The government is liberalizing the power generation and distribution sectors in the expectation of encouraging increases in output and efficiency through the market and private investment. This should mutually benefit energy companies, who have space to grow, and consumers, as competition brings prices down. “Turkey is reducing the role of the government in the energy industry in a bid to increase productivity and create more jobs,” Mehmet Simsek, state minister for the Treasury, has said.
The opportunities have not escaped developers’ notice. Some 600 MW of additional wind power generation is expected to come onstream by the end of next year. At the end of 2007, Turkey had 146 MW of wind capability.
One of the key developments was a deal signed with US giant General Electric (GE) in July last year for the installation of a 52-turbine, 130 MW plant in Bahce, southeastern Turkey. The station will be the world’s largest installation of GE’s new 2.5xl wind turbine technology and will be operated by Zorlu Enerji Elektrik Uretim, a subsidiary of Turkish holding firm Zorlu Group. The turbines comply with the European Union mandated requirements, while the government has brought wind power regulation into line with the EU’s, opening the potential for renewable power exports to the bloc through bordering member states Bulgaria and Greece. Other local players are also getting involved: Polat Holding has announced that it plans to invest $730 million in wind power in the country, while Borusan Holding is looking to deploy a similar amount in expanding its hydroelectric activities.
The value of energy
“The size of the renewable energy market has reached nearly $300 billion through the decline in fossil-based fuel sources such as petroleum, coal and natural gas,” said Turker Baloglu, Epuron’s Turkey director. “Turkey’s need for energy is growing at 7-8% annually. Renewable energy sources such as wind, sun, water and geo-thermals have to be taken into serious consideration.”
It’s a fashionable time to be getting into renewable energy: a global consensus is forming around the concept that the world’s climate is being changed by mankind’s actions, perhaps primarily emissions of carbon dioxide. Furthermore, volatile commodity prices, including those of oil and coal, have sharpened the incentive to seek other forms of power generation. Costs have also served as a stark reminder that some resources, in particular fossil fuels traditionally used in power generation, are indeed finite.
These factors have intensified the drive to increase the proportion of electricity generated from renewable resources such as wind power. They have also led to a renaissance nuclear energy, long regarded the electricity world’s ugly duckling but a clean and less resource-hungry source of power. Across the Middle East — for example in the UAE, Jordan and Morocco — countries are looking to establish nuclear power capability to help support burgeoning economies and populations. The energetic involvement of Nicholas Sarkozy, president of one of the world’s leaders in civil nuclear power, has played a key role by pledging support for the nuclear power programs of developing countries.
Sarkozy has an infamously prickly relationship with Ankara but this has not stopped Turkey pushing its own nuclear plans forward, albeit not without hitches. On October 15 it was announced that a consortium including Russian firm Atomstroyexport and Turkey’s Ciner Group had made the only bid for the construction of the country’s first nuclear power plant, a 4,000 MW station at Akkuyu on the south coast. At the time of writing, two doubts still hung over the process. Firstly, the government had hoped for at least two full bidders for the process. Second, and potentially more damaging, if the bid is successful it could take the proportion of Turkey’s electricity at least in part dependent on Russian interests up to 55% from 35% — Russian gas currently powers many Turkish power plants.
The somewhat lukewarm response to the Akkuyu tender, and concerns over Russian dominance, may only sharpen the desire to diversify energy production to renewable sources, which are clearly not dependent on imported resources, and in which non-Russian firms are the leading lights.
