Saturday, September 06, 2014

"Energy" Chapter of the 62nd Turkish Government's New Program

Dear Readers,

The 62nd Turkish government has recently announced its new program. The "Energy" chapter is described on pages 148-152 of the document in Turkish. Let us read and evaluate what is targeted in the "Energy" chapter of this new program.


Energy is one of the most strategic areas of the modern world. In recent years, past governments have dedicated ample resources to create a greater capacity of electricity generation, diversify energy resources, emphasize renewable energy, and to privatize energy generation and distribution facilities.

In this context, we had approximately 31,000 MWe of installed power in 2002, whereas we now have 67,431 MWe as of July 2014. Similarly, while we produced 129 billion kWh of electricity in 2002, as of 2013 this same figure has been raised to 242 billion kWh.

We resolved to increase the electricity generated from renewable energy sources, and put an energy efficiency strategy into practice.

We shall survey and attempt to exploit the indigenous and renewable energy resources to their highest potential in the coming period.

In particular, the hydroelectric power plant projects which were commissioned in 2003 have increased their annual electricity generation rates from 26 billion kWh to 79 billion kWh today. In the last three years we have commissioned hydroelectric power plants that will produce a total of 6,450 MW.

Indigenous lignite coal resources are extremely important for our thermal power plants. We have huge lignite coal reserves in the Afşin-Elbistan, Konya Karapınar, Afyon Dinar, and Eskişehir Alpu coal fields that are ready for investment initiatives to spark greater electricity generation.

In addition to the coal production from these mines that will feed into the development of thermal power plant projects, investment incentive schemes have also been implemented in order to prompt more positive growth to this end in the medium-term.

We will also accelerate our work on the establishment of nuclear power plants.

The privatization of public electricity distribution companies has now been completed, and in the future we shall continue to privatize local electricity generation facilities.

By 2023, it is our goal to substantially increase the economic and social development of our society. To this end we aim to meet our domestic energy demand, providing uninterrupted, safe, low-cost energy to the end consumer by diversifying our energy resources and technologies and increasing the security of our energy supply.

In order to produce greater amounts of energy, we shall develop our civilian nuclear capabilities and expand thermal and renewable energy projects by utilizing local resources to their highest potential while minimizing the adverse effects on the environment. At the same time we will continue to make use of our strategic position that is strengthened by competition in the international energy system.

In order to increase supply security of primary energy resources, we shall place greater emphasis on balanced resource diversification.

In Mersin Akkuyu and in Sinop, we shall commission 8 different nuclear power units capable of producing a combined total output of 9,280 MW.

Thermal power plants which will be powered by local coal are nearing completion and will contribute a total of 18,500 MW to the Turkish energy sector.

Almost all of our hydroelectric projects will become operational, providing 20,000 MW of additional power. The major hydroelectric projects in Ilısu, Boyabat, and Alpaslan-2 will soon be complete.

In addition, our wind energy turbines will produce 20,000 MW, planned geothermal power plants will exhibit a minimum capacity of 600 MW, and solar energy will generate 3,000 MW. Therefore, in the end, the share of our energy that will be generated by renewable resources in the year 2023 will constitute 30% of the country’s overall energy production.

We are entering a new era of solar energy. The world's largest solar power plant will start operating in the province of Konya in the future. This new solar power plant investment with a capacity of 3,000 MW will generate about 6 billion kWh annually. We will make the province of Konya the solar energy hub of our nation.

Prior to 2003, only nine provinces had access to natural gas distribution facilities, now in 2013, however, 72 of our country’s provinces benefit from this access. We shall invest further to incorporate the remaining nine provinces which require special care to overcome technical difficulties and high construction costs so that all our provinces will have access to natural gas.

We give great importance to the security of our natural gas supply. In this respect, we are committed to diversifying our supply sources and increasing the number of underground gas storage facilities. Turkey’s first operational underground natural gas storage facilities can be found in the North Marmara and Değirmenköy regions. The first phase of the Lake Tuz (Salt) underground storage facility, that will boast a storage capacity of 500 million m3, is expected to be completed by 2016.

In 2002, annual investments for oil exploration and production amounted to approximately $100 million. That figure was brought up to $910 million by 2012.

Construction of the Baku-Tbilisi-Ceyhan crude oil pipeline is now finished and we have commenced work on the Baku-Tbilisi-Erzurum (Shah Deniz) natural gas pipeline project. Our share in the Azerbaijani Shah Deniz Stage 2 project has jumped to around 20 percent, making Turkey the project’s second largest shareholder.

An intergovernmental agreement that will facilitate the transportation of Azeri gas through Turkey to Europe via the Trans-Anatolian Natural Gas Pipeline (TANAP) has now been signed.

The first phase of the Turkish-Greek natural gas pipeline, dubbed the South European Gas Ring Project, has been completed and the pipeline has begun to export gas to neighboring countries.

On one hand, we aim to convert the Ceyhan sea port to the second largest energy terminal in Europe. On the other hand, we are trying to ensure the security of our supply while taking the necessary measures to become an energy transit country.

Turkey is the largest energy market of the Middle East, the Caucasus/Central Asia, and South Eastern Europe/Balkans regions. Turkey shall continue to pursue international projects that link these regions with itself, acting as the local center in the energy trade nexus. In this way it seeks to become a regional energy trade powerhouse and will continue to strategically aim to strengthen its position in this regard.

Our government, our industries, and our energy sector give priority to the development of our mining capabilities. In 2012, our country's mineral production generated $11.7 billion. The target for 2023 is $20 billion.

In 2002, we received $600 million from our mineral exports, whereas by the end of 2013, this number increased to $5 billion.

In 2002, 100 thousand meters of exploratory drilling was undertaken by those in the public and private sectors. As of 2013, this level jumped to 1 million 500 thousand meters. In 2023, the amount of drilling for mineral exploration purposes is targeted to reach 5 million meters.

Encompassing $900 million in 2013, investment in domestic oil and gas exploration has increased about 9-fold compared to 2002. Additionally, in 2002, the total combined depth of oil and gas bores was only 52 thousand meters in length, while now the total combined depth is about 305 thousand meters in 2013.

In the coming period, we shall continue to explore our mining, oil, gas, and geothermal potentials. In addition, we shall put special emphasis on our marine research facilities with our own research vessel.

Turkey's "black diamond" (local coal) will play an increasingly important role in our energy portfolio. When we (the AKP) took office, 8 billion metric tons of coal were being extracted annually. By drilling, we have now supplemented this amount with an additional 6.8 billion metric tons of coal. Over the past 11 years, we have discovered 11 new coal fields.


It can easily be understood that the "Energy" targets of the new, 62nd government’s program were taken from the text of the previous government program. This is because these goals represent a continuation of the former. However, we believe that the new program should be expanded on to promote more local engineering, local design, local manufacturing, and an increase in domestic employment.

This new government will have a 10-month time period to work toward these goals until the next general elections in June 2015.

There are so many lofty targets mentioned in the new program that cannot be achieved within this short 10-month timeframe.

At any rate, the new government should place their own goals and priorities on the agenda to supplement those that were established earlier regardless if the new program is presumed to be a continuation of the former government’s approach, a reality that was indicated with the government’s declaration that it would pursue the same energy policies.

Seeing that past figures and aims of the earlier government are repeated in the new government program, we feel that there is no need for the current government to speak for far-off future targets as this program should be meant for a transition period.

Moreover, we notice no mention of the new combined cycle power plant projects or new power plants that will operate on imported combustible fuels. Is this an indication of political reluctance to promote these investments?

Likely, due to the adverse effects of natural gas and imported fuel prices in the international spot markets on the ever-growing "current account deficit", there is no mention of price fluctuations.

The Government Program has received the vote of confidence in the Turkish Parliament on the 5th of September, 2014. We wish great success to our new, 62nd Government in attaining their "Energy" targets as well as in completing all other measures that have been mentioned in the document.

Ankara, 15 September, 2014

Haluk Direskeneli is a graduate of METU’s Mechanical Engineering Department (1973). He has worked in public and private enterprises, US-Turkish JV companies (B&W, CSWI, AEP, Entergy), and in fabrication, basic/detail design, marketing, sales, and in project management of thermal power plants. He is currently working as a freelance consultant/energy analyst of thermal power plants, basic/detail design software expertise for private engineering companies, investors, universities, and research institutions. He is a member of METU Alumni and the Chamber of Turkish Mechanical Engineers Energy Working Group.


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