Energy Economy

18 Dec 2020

“Turkey Energy Outlook” Study

18 Dec 2020   

Newsworthy item: IICEC Turkey Energy Outlook from Sabanci University

What people have said about the Turkey Energy Outlook (TEO)

• Energy and Natural Resources Minister Mr. Fatih Dönmez:
“Up until now, we had hoped that others would also carry out energy studies and we would also benefit from them. Sabancı University IICEC has fulfilled our wish. This report, a first of its kind in Turkey, prepared by the Sabancı University-IICEC is a highly significant resource in shaping our ideas. We benefit not only from our intellect but also from the intellect of universities and research centers. I extend my thanks to all who contributed to this study".

• International Energy Agency Executive Director Dr. Fatih Birol: “Similar studies have been carried out in various countries and I thought it would be very beneficial to conduct such a study in Turkey as well. IICEC was able to bring this idea to life. This study presents the perspective of the period until 2040 with a holistic approach covering all energy sectors, energy sources and technologies. I believe that the study addresses opportunities in the energy sector for a more secure, more efficient, competitive, technology-focused and sustainable energy future and stands as a pioneering work for developing countries.”

• Founding Chair of the Board of Trustees Ms. Güler Sabancı:
"This report is an independent and objective university product and a pioneer in Turkey.  We have completed the pioneering and exemplary work that I dreamed of 10 years ago when we were first establishing IICEC. The key to success in developed countries are governance models that highlight participation and synergy, bring all serious stakeholders together and enable them to towards common goals and a better future together while independent, qualified research institutions create a solid basis for this. I define this as the ‘Success Triangle’. IICEC is a solid example of this Success Triangle in Turkey and serves as a melting-pot for Public-Industry-Academy.”

What is the Turkey Energy Outlook? The TEO is a first-of-a-kind comprehensive, forward-looking overview of Turkey’s energy economy.  Two projections of all key energy variables are provided to 2040, each reflecting different future energy policy priorities.  Detailed policy recommendations are provided to achieve a clean energy future, economic progress, significantly lower energy import costs, enhanced energy security and efficiency and Turkish production of clean energy technologies.

Science-based report: The TEO model employs a “bottom-up” methodology relying on the most extensive and detailed data ever assembled for the Turkish energy economy.  For example, it includes the performance parameters of every significant power plant and each travel mode and vehicle class in Turkey. The TEO model includes all sectors, fuels and technologies that make up the Turkish energy economy.

Essential for Investors Interested in the Turkish Energy Sector:  The TEO provides much more than modeling scenarios and policy recommendations.  In order to fully support the estimates and recommendations, the TEO provides an in-depth summary of Turkish energy infrastructure and key energy-using industries.  It provides an outlook of how much infrastructure investment will be needed over the TEO projection period. 

More important to foreign investors, the TEO provides a comprehensive overview of Turkish energy markets and the government regulations and policies they operate under.  Particular focus is paid to the emerging energy commodity markets, how they work and plans for expanding their coverage and functionality.

What are the TEO Scenarios?  What do they show?

• Two Scenarios: The Reference Scenario reflects a continuation of current policies but not necessarily achieving the most ambitious and challenging long-term targets. The Alternative Scenario includes additional policy initiatives that, while cost-effective, require more challenging policy obstacles to be overcome. The TEO Scenarios also take into account the current and possible future impacts of the Covid-19 pandemic on each sector and fuel.

• Benefits of the Alternative Scenario: The Alternative Scenario policies are estimated to produce many benefits for Turkey. For example, they show increasing clean Turkish energy technology manufacturing rather than importing these technologies. Turkey will produce more renewable and nuclear power while using energy more efficiently and addressing power system and grid flexibility. Renewable energy will also grow outside of the power sector as industry, agriculture and buildings use less coal and oil in favor of renewables and natural gas. Large reductions are shown in Turkey’s energy imports with more renewables and, especially, reduced imports of natural gas due to continued E&P success shown recently in the Black Sea.

Key Elements for Success: Progress is enabled by greater private-sector participation with faster progress to competitive electricity and natural gas markets and cost-reflective energy prices while addressing social considerations. Significant energy efficiency improvements are achieved in buildings, industry and transport by means of policy choices such as transport modal shifts, energy performance contracts in buildings and developing technologies around electric vehicles, digitalization and many others.

While restrictions on GHG emissions are not included among the Alternative Scenario policies, the TEO predicts falling GHG emissions in the Alternative Scenario, even with a projected growth in Turkey’s consumption of energy services and a post-2040 pathway towards net- zero emissions. Throughout all of these developments, an emphasis is placed on Turkish R&D and manufacturing with the aim that Turkey should become an exporter of advanced energy technologies as it enjoys the energy security, efficiency and environmental benefits they provide to Turkey. The success triangle of public-private sector-academia partnership is key to success.

Accounting for Covid-19: The tragic Covid-19 pandemic has taken many lives and disrupted the world economic order. The transport and energy sectors were particularly hard hit.  Any long-term energy outlook published before this tragedy would already be obsolete. The TEO scenarios fully reflect the short, medium and possible long-term impacts of the pandemic.

The Recent Black Sea Discoveries: In addition, the relatively recent Turkish E&P investments payed off in a big way, much sooner than most experts expected, opening a new era for Turkish hydrocarbon production. Any outlook that did not reflect the updated consequences of Turkish E&P activity would also have been obsolete. The TEO modeling framework was able to accommodate these late breaking developments to ensure relevant energy, environmental and economic projections.

About IICEC: The Sabanci University Istanbul International Center for Energy & Climate (IICEC) is an independent Center at Sabanci University that produces energy policy research and uses its convening power at the energy crossroad of the world. Utilizing this strategic position, IICEC provides national, regional and global energy analyses as a research and an international networking center. Since it was established in 2010, IICEC has leveraged Istanbul’s strategic position to host high-level Forums featuring sector leaders from government, international organizations, industry and academia fostering substantive discussion among key stakeholders with the aim of charting a sustainable energy future. IICEC also hosts seminars and webinars on important energy policy, market and technology areas.

As a research center in one of the most reputable universities in its region, IICEC has built a comprehensive technological and economic overview of the Turkish energy economy and published research reports on a wide variety of energy and climate topics. IICEC also provides concise analyses of key energy market developments for policy makers and energy professionals with busy agendas. IICEC emphasizes a holistic and quality analytic approach integrating energy policy objectives with technological assessments, economic analyses, market drivers, regulatory factors and reflecting business acumen.


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