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Turkiye’s energy outlook and achieving energy independence

December 29, 2022 at 4:41 pm

Former NATO Secretary General Jaap de Hoop Scheffer in Brussels, Belgium on March 21, 2014 [Dursun Aydemir/Anadolu Agency/Getty Images)

“This century will be, to a large extent, about energy. Energy security is a theme where NATO is in the process of defining its added value. Protection of critical energy infrastructure,” these were the words of Jaap de Hoop Scheffer, the former NATO secretary-general, they were delivered during a speech in Bucharest Summit in 2008.

As Russia’s invasion of Ukraine has created shock waves in global energy markets leading to price volatility, supply shortages, countries around the world were forced to focus on their energy security and energy independence.

As it moves to prioritise energy security after the Ukraine war, Turkiye has also stepped-up efforts to increase its energy security by strengthening domestic energy production and by developing related industries. For instance, in the last week of 2022, Turkiye announced the discovery of an additional 58 billion cubic metres of natural gas in the Black Sea region. The country stressed that its natural gas reserves in the Black Sea total 710 billion cubic metres with a market value of $1 trillion. This is 2022’s last energy step for Turkiye’s energy demand amid rising energy costs.

Relatedly, putting further upward pressure on inflation, which reached nearly 80 per cent in July 2022, Turkiye has raised electricity and natural gas prices by around 20 per cent for Turkish households and by around 50 per cent for industries, according to EPDK, Turkey’s energy regulator. This means they now spend nearly 25 per cent more on energy than they did last year in real terms.

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In 2022, Turkiye strengthened its energy ties with Russia. As Moscow seeks new customers for oil, gas and coal, Ankara became one of the top importers, as it promotes plans to become a regional trading hub.

The world is experiencing a surge in the cost of living and corresponding inflation levels, mostly attributed to supply-side factors. Soaring prices of fossil fuel-based energy preceded and accompanied this return to rising inflation in countries across the world. This reliance comes with a cost. Turkiye’s monthly trade deficit set an all-time record in July 2022, reaching $62 billion for the period of January-July due to rising costs of energy imports. This leads energy dependent countries like Turkiye to focus on their own renewable energy sources.

In 2022, according to a DNV report, there was strong growth in renewable energy deployment, which accounts for close to 50 per cent of Turkiye’s electricity production. Turkiye started to build the world’s largest onshore wave power plant, an estimated $150 million project signed by Israeli company Eco-Wave. Also, Turkiye’s wind energy electricity generation reached an all-time high with 204,375 megawatt-hours of production in 2022. This may halve the country’s reliance on imports in power generation by 2030 helping it achieve its net zero aim.

Reducing the dependence on foreign oil and gas and increasing alternative energy sources is every country’s main target. As a very passionate advocate of renewables for many years, Turkiye’s latest success in 2022 in terms of renewables is very positive. Ankara can learn a lot from Germany’s energy transformation project “Energiwende” and how its capacity will bring abundant clean, sustainable energy to millions around the globe.

Since 2012, Germany has engineered a profound transformation of its energy markets through a long-term process of policy interventions, renewable energy technologies and citizen participation.  To reach Germany’s capacity, Turkiye would however need 40 GW of solar and 30 GW of wind power capacities by 2030.

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Given Turkiye’s heavy dependence on foreign energy – importing 93 per cent of its oil and 99 per cent of its gas – it must chart a new course and strive to achieve energy independence in 2023. In the short term, the use of renewable energy resources, primarily wind and solar, will grow significantly within Turkiye’s power system and with effective technologies. If carefully managed, Turkiye will generate about 20 per cent of its total electricity from wind and solar by 2026.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.