CLEAN ENERGY TO TURKEY

CLEAN ENERGY TO TURKEY


Trends and opportunities
The market

Although Turkey has an abundance of renewable energy sources and could in theory essentially provide all of its own requirements from indigenous sources; it is in reality an energy importer. The country’s main electricity sources are from imported gas, lignite, oil, and coal, while 12 per cent of its supply is from renewable energy sources mainly hydro, biomass and geothermal and only 0.2 per cent from the wind.

By the end of 2008, total primary energy consumption in Turkey has equalled to 106, three million tonnes of oil. Natural gas is in the front rank with 31, eight per cent in the allocation of the said supply to resources. The natural gas consumption is followed by the oil at the rate of 29, nine per cent, domestic coal at the rate of 15, five per cent, and by 14 per cent at the rate of imported coal.

Turkey has a total installed capacity of approximately 40,000MW from all energy sources for electricity. Currently, electricity is mainly generated using thermal power plants (which consume coal, lignite, natural gas and fuel oil), geothermal energy and hydropower plants. Turkey has no large oil or gas reserves. The main indigenous energy resources are lignite, hydro and biomass.

The Turkish government is progressively adopting new, long-term energy strategies to reduce the share of fossil fuels in primary energy consumption, so the development and use of renewable energy sources and technologies are increasingly encouraged and supported through further incentive and subsidy schemes. The Ministry of Energy recently announced that around $120 billion will be invested by 2020 in the renewable energy sector in Turkey, and government will introduce new legislation to encourage private investors to tap the country's considerable renewable energy potential.

With the signing of the Kyoto protocol to reduce greenhouse gases in February 2009, Turkey has shown its commitment to develop its rich renewable energy resources.

The primary renewable energy resources (RER) in Turkey are:

hydropower
solar
wind
geothermal
biomass
biogas
The most significant developments in renewables have been observed in wind, hydropower and geothermal.

Hydropower

Turkey has significant hydro-electric power resources, with more than 100 plants and total installed generating capacity of 12.6GW. Turkey is also developing a great deal more hydro-power plants, especially as part of the US$32 billion south-eastern Anatolia Project along the basin of the Tigris and Euphrates rivers. This is considered one of the most ambitious water development projects ever undertaken, with Turkey building 22 dams, 19 hydro-electric power stations (with around 7.5GW of generating capacity), and an expansive network of tunnels and irrigation canals covering 1.7 million hectares of land. The entire project is scheduled to be completed by 2010.

Business Monitor International (BMI) is forecasting hydro-electric power generation rising from around 42twh in 2008 to 52twh by 2013.

Solar

Both photovoltaic and solar-thermal systems could be used to great effect in Turkey, considering the yearly average solar radiation of 3.6kWh/m2-day and the total yearly radiation period of approximately 2640h- more than sufficient for solar thermal applications. Despite this huge potential, flat-plate solar collectors for domestic hot water production in coastal regions are the only real use of solar energy.

Turkey's total solar energy potential is 35 Mtoe per year and solar energy production is expected to reach 602 kilo-tonnes of oil equivalent (Ktoe) in 2010 and 1,119 Ktoe in 2020.

Wind

Turkey is a prime candidate for large-scale wind energy development – it is in second place behind the UK in terms of powerful wind location and is believed to have technical wind potential of 88,000MW. Surrounded by the Aegean, Mediterranean and Black Seas, the coastal areas in Turkey have the strongest wind speed however; these areas are also the farthest from the transmission grid. Despite Turkey’s wind assets, renewable energy development from wind has been slow in development.

With a total installed capacity of 146MW at the end of 2007, only the past two years have witnessed rapid growth in this sector, 40 new wind farm projects (totalling approximately 1400MW) have already obtained licences and 751 licence applications (totalling approximately 78,000MW) are still awaiting approval. Some cities in Turkey have relatively high wind speeds. These have been classified into six wind regions with a low of about 3.5m/s and a high of 5m/s at 10m altitude, which corresponds to a theoretical power production of between 1,000 and 3,000kWh/ (m2yr). The most attractive sites are the Marmara Sea region, the Mediterranean Coast, and the Aegean Sea Coast.

Geothermal

Turkey has one-eighth of the world's geothermal potential and is ranked seventh in the world. The cost of electricity generated from geothermal reserves ranges from €0.03 to €0.10c/kWh, the bottom end of which is competitive with conventional systems. Data accumulated since 1962 shows that about 4,500MW of geothermal energy usable for electrical power generation may exist in high enthalpy zones. Heating capacity runs at 350MW, which is equivalent to 50,000 households, this can be increased to 500,000 households by 2010.

There are 11 other geothermal fields, all in far south-west Turkey, which may be suitable for geothermal power production. The Germencik-Aydın field in the Aydın Province is the most promising one. Power generation potential in this field has been estimated to exceed 100MW.

Turkey has unveiled plans to offer rights to develop 65 sites identified as having geothermal potential. This is being organised by Turkey's General Directorate of Mineral Research and Exploration, which has been developing Turkey's geothermal potential since 1962.

The first stage offering six sites close to the south-western Turkish cities of Aydin and Manisa opened in late August 2010. Each site has been given a nominal minimum capacity to be installed, with the expectation that operators can increase this by judicious development of the site.

The second and third offerings are for sites thought suitable for large-scale heating projects. The second includes 23 sites set aside for heating up to 30,000 residential buildings and up to 2,000 hectares of enclosed agricultural buildings, while the third stage is for 31 sites earmarked for thermal tourism facilities with an estimated maximum capacity of 100,000 beds.

Biomass

Biomass still represents a significant share of total energy consumption in Turkey, despite a drop from 20 per cent in 1980 to eight per cent in 2005. Fuel wood and animal waste are the main biomass fuels used for heating and cooking in many urban and rural areas. The total recoverable bioenergy potential was estimated at 16.92 Mtoe in 1998. This estimate is based on the recoverable energy potential from agricultural residues, livestock farming wastes, forestry and wood processing residues and municipal wastes. Total biomass production was 7.3 Mtoe in 2005 and is expected to be 52.5 Mtoe in 2030.

Wave power

The Turkish government recently announced offers of incentives for developers of wave power plants under a new renewable energy law currently under preparation; the Minister of Energy had completed work on a ‘wave power atlas’ of the Turkish coast, which he hoped private developers would make use of in designing wave power projects.

Opportunities

Turkey has great renewable energy potential and is keen to reduce its dependence on fossil fuels by increasing its use of RER. The wind sector is a good example for the increasing demand to understand the generation of electricity with renewable resources.

Energy Market Regulatory Authority (EMRA) has stated that 751 licence applications for RER electricity generation projects with a total capacity of approximately 78,000MW were pending approval in November 2007. It is expected that government will call for tenders for wind licences. A highly competitive market is emerging in Turkey and there will be further opportunities for foreign investors to enter, both as foreign direct investors and as partners with local companies that have already obtained generation licences.

Turkey is set to increase the guaranteed wholesale purchase price for electricity produced from renewable resources to better reflect investments required.

Turkey operates under a quota system in which power distributors and some electricity users in Turkey must obtain a set percentage of their power from renewable resources at or above these guaranteed prices. Electricity prices in Turkey's developing power market are generally set according to demand.

Several recent deals point to a growing interest by foreign investors in Turkey's renewable energy market as the country works to diversify its energy mix and reduce its dependence on imported natural gas. The US, Spain, Italy and Canada governments are signing MOUs on broad programs of cooperation in the areas of energy efficiency, renewable energy, and clean coal technology. The agreement will get countries working together on renewable energy projects, energy efficiency and in the exchange of information and experience in the energy sector.