Energy Policies of IEA Countries

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TURKEY 2009 Review Energy Policies of IEA Countries

TURKEY 2009 Review

Turkey will likely see the fastest medium to long-term growth in energy demand among the IEA member countries. It has a young and urbanising population and energy use is still comparatively low. Therefore, ensuring sufficient energy supply to a growing economy remains the government’s main energy policy concern. Turkey has also progressed significantly in all other areas of energy policy over the past few years.

Large investments in energy infrastructure, especially in electricity and natural gas, are needed to avoid bottlenecks in supply and to sustain rapid economic growth. To attract that investment, the country needs to continue reforming its energy market. Power sector reform is well under way, but in the natural gas sector reform has been slower and needs to be accelerated.

Improving energy efficiency is essential for responding to Turkey’s energy policy challenges, and considerable potential remains in all sectors. In a country where private cars are rapidly becoming more common and where significant new construction is foreseen, transport and buildings merit particular long-term attention from the decision makers. Energy-related CO2 emissions have more than doubled since 1990 and are likely to continue to increase rapidly over the medium and long term, in parallel with energy demand. The IEA urges Turkey to intensify efforts to further develop its approach concerning its post-2012 regime to combat climate change, and to consider setting a quantitative overall target for limiting emissions.

This review analyses the broad range of energy challenges facing Turkey and provides critiques and recommendations for further policy improvements.

(61 2009 06 1 P1) €75 ISBN 978-92-64-06041-8 -:HSTCQE=U[UYV]: TURKEY 2009 Review 2009 of IEACountries Energy Policies

© IEA/OECD, 2010 International Energy Agency economies, eachofwhichisobligedtoholdoilstocksequivalent90daysitsnetimports. online at The Agencyaimsto: The IEAcarriesoutacomprehensiveprogrammeofenergyco-operationamong28advanced n countries onsoundenergypolicy. through maintainingeffectiveemergencyresponsecapabilitiesincaseofoilsupplydisruptions. countries throughcollectiveresponsetophysicaldisruptionsinoilsupplyandadvisemember n November 1974. Itsmandateistwo-fold:topromoteenergysecurityamongstitsmember Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular, Securemembercountries’accesstoreliableandamplesuppliesofallformsenergy;inparticular, in aglobalcontext–particularlytermsofreducinggreenhouse-gasemissionsthatcontribute The InternationalEnergyAgency(IEA),anautonomousagency,wasestablishedin Promotesustainableenergypoliciesthatspureconomicgrowthandenvironmentalprotection to climatechange. 75739 Paris Cedex15, France The termsandconditions are available n energy data. Improvetransparencyofinternationalmarketsthroughcollectionandanalysis Please notethat thispublication www.iea.org/about/copyright.asp that limititsuseanddistribution. © OECD/IEA, 2010© OECD/IEA, is subjecttospecifi c restrictions n Support global collaboration on energy technology to secure future energy supplies Supportglobalcollaborationonenergytechnologytosecurefuturesupplies 9 ruedela Fédération and mitigatetheirenvironmentalimpact,includingthroughimprovedenergy efﬁciency anddevelopmentdeploymentoflow-carbontechnologies. n Find solutions to global energy challenges through engagement Findsolutionstoglobalenergychallengesthroughengagement and dialoguewithnon-membercountries,industry, INTERNATIONAL ENERGYAGENCY international organisationsandotherstakeholders. Poland Norway New Zealand Portugal Slovak Republic Netherlands Luxembourg Spain Korea (Republic of) Sweden Japan Switzerland Italy Turkey Ireland United Kingdom Hungary United States Greece The European Commission Germany also participates in France the workof theIEA. Finland Denmark Czech Republic Canada Belgium Austria Australia IEA membercountries:

PART II:SECTORANALYSIS PART I:POLICYANALYSIS 5 4 3 2 1

OIL ENERGY EFFICIENCY ENVIRONMENT GENERAL ENERGYPOLICY ANDKEYRECOMMENDATIONSEXECUTIVE SUMMARY Recommendations Critique Policies andMeasures Institutions 35 Overview ...... Recommendations Critique Security ofSupply Prices andTaxes Recommendations Critique Local AirPollution Change Climate Recommendations Critique Key Policies Institutions Supply andDemand 13...... Overview Country Key Recommendations Executive Summary Market Structure Infrastructure Supply andDemand ...... 51 ...... 43...... 63...... 32...... 20...... 37...... 17...... 18...... 53...... 25 ...... 57...... 56...... 25...... 48...... 65...... 61...... 34...... 30...... 22...... 7 ...... 35 ...... 13...... 51...... 38...... 10...... 13 ...... TABLE OFCONTENTS .. 7 ..... 3

4 COAL NATURAL GAS ENERGY RESEARCH AND DEVELOPMENT ENERGY RESEARCHANDDEVELOPMENT ELECTRICITY ANDNUCLEARENERGY RENEWABLE ENERGY Recommendations Critique Nuclear Energy Prices andTariffs Transmission Structure Industry Market Reform Supply andDemand Recommendations Critique Structure Industry Policy Supply andDemand Recommendations Critique Security ofSupply Prices andTariffs Infrastructure Market Reform Supply andDemand Recommendations Critique Collaboration International Funding Key Organisations Projects andSelected Overview 131 ...... Recommendations Critique Policies andMeasures Institutions Supply andDemand ...... 85 ...... 89...... 124...... 94...... 81...... 141...... 105...... 136...... 102...... 116...... 73...... 67 ...... 112...... 69...... 122...... 119...... 78...... 126...... 115...... 95...... 93...... 83...... 80...... 143...... 108...... 109...... 85...... 67...... 97...... 102...... 97 ...... 139...... 134...... 109 ...... 131 ......

FIGURES PART IV: ANNEXES A D B C

GLOSSARY ANDLISTOFABBREVIATIONSGLOSSARY INTERNATIONAL ENERGYAGENCY“SHARED GOALS” ENERGY BALANCESANDKEYSTATISTICAL DATA ORGANISATION OFTHEREVIEW 6. CO 0 EnergyinTurkey Intensity IEAMember andinOtherSelected 10. Total FinalConsumption by Sectorandby Source, 1973 to2008 9. Total FinalConsumption by Sector, 1973 8. to2008 CO 7. . Breakdown ofTotal Energy Supplyby SourceinIEA Primary 3. Total Energy Supply, Primary 1973 to2008 2. MapofTurkey 1. 3 LocationofCoalFieldsand Coal-Fired Power Plants, 2009 23. CoalSupply by Sector, 1973 to2008 22. 78 GasPrices in IEAMemberCountries,2009 21. . andHouseholds,1990 Natural GasPricesforIndustry to2009 . 20. 69 MapoftheNatural GasSystem 19. Long-Term Demand,1990 GasSupplyContractsversus . to2025 18. . Natural Gas Supplyby Sector, 1980 to2008 17. Turkey’s andCompliance OilStocks withtheIEA90-Day Obligation, 16. OECDLightFuel OilPricesandTaxes Quarter forHouseholds,Fourth 15. 58 OECDAutomotive DieselPricesandTaxes, 2009 Quarter Fourth 14. . . OECDUnleaded GasolinePrices andTaxes, 2009 Quarter . Fourth 13. MapofTurkey’s OilInfrastructure, 2008 12. OilSupplyby Sector, 1973 to2008 11. 5. Energy-related 5. Energy-related CO Total FinalConsumption by Source,1973 to2008 4. Organisations Visited Review Team Review Criteria Selected IEAMemberCountries,1973Selected to2008 Countries, 1973 to2008 Member Countries,2008 December 1999 toDecember2009 2009 2 2 Emissionsby Fuel, 1973 to2008 Emissionsby Sector, 1973 to2008 ...... 60...... List ofFigures, Tables andBoxes ...... 147...... 147...... 12...... 2 EmissionsperGDPinTurkey andinOther ...... 148...... 37...... 15...... 75...... 52...... 63...... 28...... 87...... 27...... 55...... 14...... 79...... 68...... 26...... 35...... 16...... 88...... 36...... 59.... 155 157 147 151 5

© IEA/OECD, 2010 BOXES TABLES 6 4 NwGnrtn aaiyb yeo wesi,20 o20 116 New GeneratingCapacityby Type . 2003to2009 ofOwnership, 14.. Breakdown ofGenerationandCapacityby Company, 2009 11213. Breakdown ofGenerationandCapacityby Energy Source,2009 . 12. . 90 Large Coal-Fired Power PlantsinTurkey 11. AidtoTurkish State to2008 (TTK),2004 HardCoalEnterprises . 10.. 2008 andHardCoalReserves, Lignite 9. CoalProduction by Type ofCoal,2000to2008 8. LNG Terminals inTurkey 7. Number ofCompanies intheNatural GasMarket by Activity, 6. Legal BasisforOilSecurityMeasures inTurkey 5. inTurkey, OilReserves 2009 January 4. Breakdown ofPassengerTravel by Mode,2008 3. 2. SO Greenhouse GasEmissions,1990 to2007 1. . Key Recommendations oftheIEAWind Energy Roadmap 4. TheNabucco PipelineProject 3. Law ontheStockholding Agency Draft 2. Recommendations IEAG8Energy Efficiency 1. 25. Renew Renewable ofTotal Energy asaPercentage Energy Supply, Primary 24. 5 Government R&DBudgets inIEAMemberCountries,2008 35. Government RD&DSpendingonEnergy, 1990 to 2008 34. Turkish National ScienceandResearchStructure 33. ElectricityPricesinIEAMemberCountries,2009 32. ElectricityPricesinTurkey IEAMember andinOtherSelected 31. 30. MapoftheElectricityTransmission Network 29. TheStructure oftheElectricityMarket FinalConsumption ofElectricityby Sector, 1973 to2008 28. ElectricityGenerationby Source,1973 to2008 27. 26. ElectricityGenerationfrom Renewable of Energy asaPercentage a 0 0 ...... 71May 2010 ...... in IEAMemberCountries,2008 1973 to2008 Countries, 1990 to2009 All GenerationinIEAMemberCountries,2008 2 Emission Standards forLarge EmissionStandards New Power Plants,2007 able Energy asaPercentageofTotal Energy Supply Primary ...... 98...... 77...... 120...... 76...... 99...... 52...... 114...... 86...... 61...... 91...... 25...... 46...... 117...... 62...... 42...... 100...... 109...... 85...... 131...... 121...... 137...... 108...... 111...... 31...... 115...... 138......

plans forsolar andgeothermal energy, andaimstointroduce nuclearpower to large remaining potential forhydro andwind power. Moreover, ithasextensive expanding economy. Thegovernment isalsodetermined toutiliseTurkey’s over thenextdecadetoprovide electricity forthegrowing population and the response. Turkey andexpects tomultiplytheiruse haslarge coalreserves The government of rightlyseesincreasing domesticenergy supplyaspart but alsomeasures toensure energy security, especiallyintheelectricitysector. increase even faster. Growth atthis pacerequires not onlylarge investments to roughly doubleover thenextdecade,andelectricitydemandislikely to witheconomicgrowth, energyClosely intertwined useinTurkey isexpected need tobeimplemented infull. they now The plansexist; reform tariffs. and tofurther economic efficiency vigour. Turkey mustseethrough itsplanstoincrease competition andoverall Turkey reforms withrelentless forthesereforms further andurges ittopursue Security ofSupplyStrategy TheIEAcongratulates outlinestheway forward. setting forfullmarket adate opening.TheMay 2009ElectricityMarket and companies; launchingaprogramme forprivatising generationassets; and privatising distribution and comprised moving tocost-reflective wholesaletariffs; market. Inthepastfew power years, sectorreform hasprogressed significantly To needstocontinuereforming itsenergy attractinvestments, thecountry sector asthesourceforsuchlarge energy investments. rapideconomicgrowth.and tosustain Turkey willrely largely ontheprivate natural gas, are needed over toavoid thecoming years insupply bottlenecks people. Large investments inenergy infrastructure, especiallyinelectricityand oftheTurkish energy isessentialforincreasing thelivingstandards Affordable energy policygoals. among thethree primary 2005 in-depthreview andthere are clearsignsofabetterfuture balance However, Turkey hasprogressed greatly inallareas ofenergy policysincethe morehas attracted focusthanmarket reform andenvironmental protection. policygoals,energy security concern. Asoneofthegovernment’s primary supply toagrowing economy remains thegovernment’s mainenergy policy and energy useisstillcomparatively low. energy Therefore, ensuringsufficient among theIEAmembercountries.Ithasayoung andurbanisingpopulation Turkey willlikely growth medium-tolong-term seethefastest inenergy demand AND KEYRECOMMENDATIONS EXECUTIVE SUMMARY 7 1 © IEA/OECD, 2010 8 examples inthis regard are theongoing projects tobuildhigh-speedrail relies onoilforalmostallofitsenergy needs,increase oilsecurity. Good improve isthelargest oil-consumingsectorand airquality and,astransport would helpsave system energy, transport sustainable avoid congestion, Crucially, Turkey canchangethecurrent trend by decisive action. Amore thatisalltoocommoninthe other IEAmembercountries. system transport Turkey remains onatrend towards car-andoil-based the sameunsustainable from attention thedecisionmakers. long-term particular andbuildingsmerit new constructionisforeseen,significant transport are where becomingmore cars andmore popularandwhere In acountry improvementsLarge potential forenergy remains efficiency inallsectors. IEA 90-day oilstockholdingobligation. improve astockholdingagencytofurther complianceestablishing withthe Itshouldalsoimproveeffect. theinstitutionalcapacity, possiblyby swiftly andnatural gasto increase emergency storagecapacitiestothis oilreserves IEA encouragesthegovernment todevelop acomprehensive plan long-term also focusonexpandingitsoilandgas storagecapacity. Inparticular, the should In additiontosecuringoilandgas sources,thecountry from diversified energy security. The IEAacknowledges theresponsibility Turkey hasshown inimproving global community. itselfandthewiderinternational both thecountry benefits stance coast isdeveloping asamajor intheregion. oilterminal Turkey’s proactive the European andother markets. international Ceyhan ontheMediterranean country, anenergy corridorbetween itsneighbouringsupplierregions and agreements andtherelated projects alsostrengthen Turkey’s role asatransit Egypt, theCaspianregion (Azerbaijan) andCentralAsia (Turkmenistan). These been quite successful,asisevidencedby agreements withRussia, Iran,Iraq, more than70%oftheproven oftheworld. oilandgas Turkey reserves has diplomacy withthesuppliercountriesinregion, whichtogether hold almost doubleover thenextdecade.Akey ofTurkey’s part policyisenergy Turkey practicallyalltheoilandgasmay imports itusesandthese security andflexibility. gasattract investment toimprove and,intheend,ensure sufficient gas supply andreduce BOTASis sustained; operator; ensurerestrictions thatrecent progress ineliminatingimport-export BOTAS implement package arevitalised ofgas market unbundle reforms toeffectively Turkeyof supplyconcerns,andneedstobeaccelerated. shouldurgently In thenaturalgas sector, reform hasbeenslower, largely owing tosecurity 2009 ElectricityMarket andSecurityofSupplyStrategy. oftheelectricitysectorare determinedintheMaysecurity andsustainability itspower diversify generatingcapacity.further Indicative forimproving targets , , the incumbent, in order to establish anindependentgas transmission , theincumbent,inordertoestablish , ’s significant market’s significant share. Allthiswould help

2012 can policy regime climate hasimplications onhow muchthe country countries ofTurkey’s Turkey’s commitmentandintent. approach onthepost- signaltoother wouldfor limitingemissions.Atarget provide an important the post-2012 regime andencouragesittoset aquantitative overall target developurges Turkey itsapproach concerning tofurther efforts tointensify inits2009National ChangeStrategy.2020), asdefined Climate TheIEA emissions from theenergy sector(-7%from thereference scenariolevel in Energy-related CO Energy-related and thegovernment shouldconsiderstronger incentives fortheiruptake. coolingandheating, optionforprovidinga technology both energy-efficient spending ontheelectricitysector. attractive as Heatpumps lookparticularly electricity useforair-conditioningwould save money thatthegovernment is changeprojections. alsoinlightofclimate Reducing attention, of particular inthebuildingssector. Air-conditioning shouldbeafocus energy efficiency towards step improvingof energy labellingofbuildingsisanimportant andpavements,for roofs aswellnaturalshading.Therecent programme for heatingandcoolingthrough better insulationandby usinglightcolours appliancesandby reducing theneed could bereduced by more efficient of thegrowing useofappliancesforheatingandcooling.Thisdemand Peak demandforelectricityisgraduallymultiple benefits. increasing, because Buildings are another measures key would bring sectorwhere efficiency development. energyadopt andimplement andurban covering aholisticstrategy transport, Turkey inIstanbul. todevelop, system transport itsefforts shouldintensify connections between improve themajor cities,andtosubstantially thepublic commitments. Forexample, ithassetquantitative forCO target aunilateral developing itspost-2012working onfurther approach anddeterminingits Turkeynot addressed intheCopenhagenAccord.Nevertheless, hasbeen are from other Annex-IParties anddifferences its specialcircumstances responsibilities andrespective capacities.Turkeydifferentiated seesthat onthebasisofequity system andin accordancewithcommonbut climate Turkey’s approach istoimplement policiesandmeasures toprotect the have for2020. anationalemissiontarget thatdoes not under theCopenhagenAccord.ItisalsoonlyOECD country post-2012 them,asrequired period orproposed mitigation actionstosupport that hasnot (by May 2010)Annex-I country set mitigation forthe targets decision 26/CP.7 of 2001 totheUNFCCC.Turkey by theParties istheonly quantitative overall tolimitemissions.Thisexemption target isbasedonthe economy Turkey withlow emissionspercapita, haspreferred not toset a totheKyotoa Party Protocol in2009.However, asarapidlydeveloping Nations Framework Convention Change (UNFCCC)andbecame onClimate growthwith significant inenergy demand.Turkey totheUnited isaParty likely tocontinueincreaseover fast inparallel themediumandlongterm, 2 emissionshave more thandoubledsince1990 andare 9 2

© IEA/OECD, 2010 KEY RECOMMENDATIONS 10 The government ofTurkey should: will needboth forlimitingemissionsandincreasing energy supply. thenewdraw energyit sourcesforfinancing technology ontheinternational ◗ ◗ ◗ ◗ Implement the2009ElectricityMarket andSecurityofSupply Strategy, and Further develop itsapproach onthepost-2012 climatepolicyregime and improve to asameansto further supporting energy efficiency Intensify efforts Continue to ensure securityofoilandgassupply, includingby further target. while takinginto accounttheadvantages anddisadvantages ofsuch a consider settingameaningfulquantitative overall target foremissions, economic growth, energy securityandenvironmental protection. stockholding requirements. natural gasstorage compliance withtheIEAoil capacityand further co-operation withcountriesandcompanies intheregion, of expansion to reform thenatural gasmarket.accelerate efforts

UKRAINE

RUSSIA BULGARIA

Black Sea

GEORGIA Edirne Kirklareli Strait of Istanbul Zonguldak Bartin GREECE Istanbul Samsun Strait of Artvin Çanakkale Çorum Ordu Trabzon Rize Izmit Bolu Çankiri Giresun ARMENIA Amasya Gümüshane Kars Çanakkale Bursa Bilecik Ankara Tokat Bayburt Kirikkale Igdir Balikesir Eskisehir Sivas Kütahya TURKEY Erzincan Erzurum

Kirsehir IRAN Afyon Manisa Usak Izmir Nevsehir Kayseri Elazig Van Malatya Aydin Batman Nigde Adiyaman Diyarbakir Burdur Isparta Konya Sirnak Kahramanmaras Eregli Mardin Karaman Gaziantep Sanliurfa Adana Ceyhan IRAQ Antalya Mersin Iskenderun SYRIA km Hatay 0 80 160 Mediterranean Sea

The boundaries and names shown and the designation used on maps included in this publication do not imply official endorsement or acceptance by the IEA.

is the17 increased atanexceptional compared rate toother OECDcountries. Turkey Turkey isarapidlygrowing economy, andover thepastdecade,itsGDPhas second-largest city, country’s withmore thanfour million inhabitants. almost 13 million,isoneofthelargest isthe citiesinEurope. Ankara, thecapital, which hasgrown by more than10% withapopulationof since2000.Istanbul, by region. varies Turkeyclimate substantially hasarelatively young population, bridge between Europe andAsia.Owingtoitssizegeography, thecountry’s to theenergywas chapter concludedin2006by theEuropean Commission. itself ingrowing harmonisationwithEU legislation.Thescreening process related since2005.Intheenergy sector, bid manifests theEUmembership accession talks Turkey totheEuropean Union hasappliedformembership andhasbeenin inAugust2007.elected election isplannedforJuly2011. Gul, isPresident TheHeadofState Abdullah (AKP) andheadedby Recep Tayyip PrimeMinister Erdogan. Thenextgeneral Thepresentterm. government isformed by theJusticeandDevelopment Party andisdirectly forafour-yearBüyük Millet elected Meclisi)has550members Turkey hasbeenarepublic since1923. Itsunicameralparliament(Türkiye relatively high10 %ofGDP. sector(mostlyagriculture) accountsfora and food-processing. Theprimary andclothes vehicle construction; textiles manufacturing; manufacturing; (26%ofGDP)are (64% ofGDPin2009).Themajor activitiesinindustry thelargest constitute economicsector As inalldeveloped economies,services GDP (USD13 054 inpurchasingpower torise. parityin2009)isexpected unemployment toliearound isexpected 14% rate in2010, whileper-capita economy by torecover contracted 4.7%in2009.Itisexpected in2010. The crisis,thegrowthfinancial slowed rate down to0.7%in2008,andthe expanded onaverage by 4.9%ayear. As a result oftheinternational The RepublicofTurkey (population71 million,area 783562km equivalent (Mtoe)in2008(seeFigure 2). From 1990 to2008,TPESincreased Turkey’s energy supply(TPES) was 99 million tonnesofoil primary total th largest economy oftheworld. From 2000to2007, theeconomy GENERAL ENERGYPOLICY 2 ) forms a natural ) formsanatural 13 2 © IEA/OECD, 2010 Figure 100 120 20 40 60 80 0 9317 9318 9319 032008 2003 1998 1993 1988 1983 1978 1973 14 Source: * negligible. 2000. Oil-fired generation peaked2000. Oil-fired declining. in 2002 andissteadily fromaccording toannualhydrological conditions,andincreased by 5TWh demand.Hydropower oftheincremental generationvaries for aquarter power grew incremental generation.Coal-fired total by 17 accounting TWh, 2000 to2009,gas-fired accountingfor72%of generation grew by 48TWh, sources forheating.Another fast-growing sourceforelectricityiscoal. From power generationinTurkey. andpolluting Itisalsoreplacing more inefficient As inmany other countries,naturalgas hasbecomethefuelofchoicefor declinesastheeconomy develops.which inevitably unchanged withtheexception oftraditionalbiomass(firewood), theuseof energy sources remained practically by closeto7Mtoe.Theother primary growing useofjusttwo fuels: naturalgas, upby 18 Mtoe, andcoal,up remaining 10%. Since2000, theincrease tothe inTPEScanbeattributed provided whilerenewable 30%ofthetotal, energy sourcesprovided the the IEAmembercountries(seeFigure 3).Oil,coalandnaturalgas together for90%ofTPESin2008, aratherhighshareFossil fuelsaccounted among TPES, includingforpracticallyalloilandnaturalgas andmostcoal. annualdeclinesince2001.the first Turkey for72%ofits dependsonimports conditions, energy supplydecreased by 1.5% from 2007 to2008,marking by 87%, achangeineconomic whiletheeconomy doubled.Reflecting Mtoe Energy Balancesof OECD Countries, Total Primary EnergySupply,Total Primary 1973to2008 IEA/OECD Paris,2009. 2 2

Oil Wind* Solar* Geothermal Hydro and waste renewables Combustible Coal Gas

Luxembourg Ireland Australia Greece Coal Netherlands Poland Peat Italy United Kingdom Turkey Oil United States Japan Spain Gas Korea Portugal Denmark Combustible Germany renewables Czech Republic and waste Hungary Belgium Hydro Canada Austria Slovak Republic Nuclear New Zealand Norway Finland Other** Switzerland France Sweden 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

* other includes geothermal, solar, wind, and ambient heat production. 15 Source: Energy Balances of OECD Countries, IEA/OECD Paris, 2009.

© IEA/OECD, 2010 Figure DEMAND 20 30 40 50 60 70 80 90 10 0 932008 1973 16 sources 3%.The share ofnaturalgas since1990, hasincreased significantly natural gas 18% each,coal17%, biomassand waste 7%andtheother As regards energy source,oilprovided 37% ofTFCin2008,electricityand Source: * negligible. sectoral breakdown ofTFCinTurkey hasremained remarkably stable. Over andother thepasttwo sectors. decades,the each forindustry, transport Forcomparison,the total. theIEAaverages in2008were closetoathird sector)usedaround 17% andtheprimary (services and theother sectors of accountingforalmostathirdeach.Transport’slargest users, share was 20% 86% from 1990 andtheresidential sectorwere the (seeFigure 4).Industry In 2008,Turkey’s consumption final ofenergy (TFC)was total 74 Mtoe,upby Supply Strategy. the generationmixincludedin2009ElectricityMarket andSecurityof the impact oftheeconomicdownturn regarding in2008/09andthetargets the supply. Theseforecasts willberevised intoaccount inthefuture taking by coalandfollowed by oilandgas. Nuclear energy would beintroduced to 2020. Supplyofallexistingformsenergy would expandconsiderably, led done before 2008,TPESwas projected toincrease by 120% from 2008to In thegovernment’s thedemandforecasts business-as-usualscenario,reflecting Mtoe Energy BalancesofOECDCountries, 9818 9819 982003 1998 1993 1988 1983 1978 Total FinalConsumptionby Source, 1973to2008 IEA/OECD Paris,2009. 4 4

Heat* Electricity Solar* Geothermal and waste renewables Combustible Coal Gas Oil

The coming from theuseofcoal,oilandelectricity. TFC more thandoublingfrom 2008to163 Mtoein2020,withmostgrowth its projections madebefore theeconomicdownturn, thegovernment foresaw down from 50%intheearly1990s. Traditional biomassis alsodeclining.In oftheenergy mix,oilhaslostground, thediversification Figure 4).Reflecting and thatofelectricityhasgrown markedly from 10% inthemid-1990s (see The entities. institutionsandother publicandprivate in co-ordinationwithitsaffiliated preparation ofenergy andimplementation policies,plansprogrammes its major activitiesconcerning theenergy sectorare thepreparation of the economic andsocialobjectives Inpractice, andthepoliciestobeadopted. body, Itisanadvisory Ministry. assistingthegovernment indetermining The to any merger oracquisition tobecarriedout inthemarket. The Competition Authority andavicechairperson. composed includingachairperson ofninemembers, is itsboard.EMRA’s of2001. boardassumeddutyinthethirdquarter Itis and liquefied petroleum gas (LPG)markets. EMRA’s decision-making body Law (2005),EMRAwas alsogiven responsibilities inthenaturalgas, oil (May 2001), thePetroleum Market Law (December2003)andLPGMarket 2001.Law inFebruary theenactmentof Natural GasMarket After Law authorityforelectricity by theElectricityMarketindependent regulatory The renewable energy resources. and (EIE) ofMENRcarriesoutvarious activitiesinrelation toenergy efficiency The Itisalsodelegated bysectors. theMENRtodealwithoilstockholding. regulation ofexplorationandproduction activitiesintheoilandnaturalgas The electricity sector. tobringprivateinvestments intothe the consequences ofthepastefforts of theelectricityandnaturalgas reform programmes. Italsodealswith andenvironment. E energy efficiency on generalenergy policies,energy markets, renewable energy, fossilfuels, body withintheMENR.Itexecutes nationalenergy policy. Itcarriesoutstudies Ministry of Energy and Natural Resources (MENR) andNatural Resources ofEnergy Ministry General Directorate of Energy Affairs (E Affairs ofEnergy Directorate General General Directorate of Petroleum Affairs (P ofPetroleum Affairs Directorate General State ofthePrime PlanningOrganisation (DPT)isanunder-secretariat Electrical Power andDevelopmentElectrical Administration Survey Resources Energy Market Regulatory Authority (EMRA) Authority MarketEnergy Regulatory hasrightstoissuetheauthorisationswithrespect ˙ IGM isresponsible fortheco-ordination ˙ is the main policy-making IGM) isthemainpolicy-making ˙ IGM) isresponsible forthe was established asthe was established isresponsible forthe 17

© IEA/OECD, 2010 SECURITY OFSUPPLY KEY POLICIES 18 increase itsnatural gas storagecapacity over the nextyears. discussion intheMENR.As regards naturalgas security, Turkey plansto astockholdingagencyisunder law onestablishing October 2009.Adraft obligations sinceMarch 2007, withtheexceptions ofDecember2007 and Turkey has beenmarginally incompliance withtheIEAoilstockholding new sourceinitsenergy supplymix. energy. Turkey Furthermore, isalsomoving tointroduce nuclearpower asa wind power capacityandharnessitssolargeothermal potential tosupply potential forhydropower. Itisalso aimingtobuild20gigawatts (GW) of untapped andsignificant oflignite haslarge reserves production. Thecountry improving securityofsupplyby ambitiousprojects toincrease domesticenergy thesourcesofoilandnaturalgas,In additiontodiversifying Turkey isalso markets.international between itsneighbouringsupplierregions andtheEuropean andother strengthen Turkey’s role asa transit country, anenergy corridorand terminal Central Asia(Turkmenistan). Theseagreements andtherelated projects also agreements withRussia, Iran,Iraq,Egypt,theCaspianregion (Azerbaijan) and of theworld. Turkey hasbeenquite successful,asisevidencedby thesupply in theregion, whichhave more than70%oftheproven oilandgas reserves A key ofTurkey’s part policyisenergy diplomacywiththesuppliercountries and gasmay more itusesandtheseimports thandoubleover thenextdecade. government’s mainenergy policyconcern.Turkey practicallyalltheoil imports energy toagrowing economyEnsuring sufficient hasbeenandremains the IEA membercountries,i.e. Turkey’s energy policybroadly follows objectives thestrategic shared by the strategic plan2010-2014strategic of the document,itsenergystrategy policyobjectives are outlinedintheinstitutional doesnot have protection. nationalenergy aspecific Althoughthecountry and supports nuclearR&D. and supports other activitiesinvolving nuclearorradioactive TAEK materials. alsoexecutes and construction, operationanddecommissioningofnuclearinstallations responsible selection, forthelicensingofactivitiesrelated tothesite The implementation. fundsandmonitoring public investment projects, allocatingandsupervising national development planstogether withtheMENRandindustry, evaluating Turkish Atomic (TAEK) Authority Energy energy security, economicgrowth andenvironmental Ministry ofEnergy andNatural Resources. Ministry is the regulatory body istheregulatory

related GHG emissionsfocuson promoting renewable energy, energy tolimitenergy- action includestheenergyimplementation sector. Efforts Nationaladopted ChangeStrategy Climate iscomprehensive, andinitial responsibilities andrespective capacities.Therecentlybut differentiated onthebasisof equity system andinaccordancewithcommon climate Turkey’s approach isto implement policiesandmeasures toprotect the from other Annex-IParties. anddifferences circumstances ignores Turkey’s Parties on thedistinctionofAnnex-Iandnon-Annex-I special Turkey ofmitigation underlinesthatadefinition commitmentssolelybased thatdoesnot have for2020. anationalemissiontarget only OECDcountry them,asrequiredto support undertheCopenhagen Accord. Itisalsothe mitigation forthe post-2012 targets period orproposed mitigation actions Turkeystatus, thathasnot (by April2010) istheonlyAnnex-Icountry set have aquantitative emissionsreductionwiththisspecial Consistent target. totheUNFCCC:itdoesnot withintheAnnex-IParties gained aspecialstatus energy useandgreenhouselow per-capita gas (GHG)emissions,Turkey has Protocol sinceAugust2009. However, asarapidlygrowing economy with Turkey andtotheKyoto totheUNFCCCsince2004 hasbeenaParty ofgas, andthenumberofnew entrants hasremainedpipeline exports low. continues tooccupy adominantpositioninthewholesalemarket andin BOTAS theseefforts, Despite ofliquefiedliberalising both naturalgas spot imports (LNG). andlong-term andthelawon awiderangeofsectors, hasbeenamendedinJuly2008, the 2001 Natural GasMarket Law, legislationhasbeenissued secondary In thenaturalgas sector, progress hasbeenslower. Sincetheadoptionof of resources inthegenerationmix. competition totheuse inthemarket,further withindicative pertaining targets Security ofSupplyStrategy, towards in2009,outlinesthenextsteps endorsed TheElectricityMarket system. and and moved toacost-reflectivetariff retail open themarket by 2015. forallcustomers tariffs Ithasalsoraisedretail tocreatetaken competitive steps markets, wholesaleand retail andaimsto distributionandgenerationbusinesses.Turkeyprivatise the state-owned has to supply).Ithasalsostarted distribution, wholesaletradingandretail businessactivities(transmission,generation, incumbents intodifferent In theelectricitysector, Turkey hasunbundledthegovernment-owned regulator (EMRA)andimplemented alicensingregime. of the2001 ElectricityMarket Law. Ithascreated anindependentenergy Turkey hasbeenreforming itspower andgas sincetheenactment sectors , , the state-owned vertically integratedgas utility, vertically , thestate-owned 19

© IEA/OECD, 2010 CRITIQUE TAXATION 20 growth inTurkey’s electricityconsumption over expected thenextdecade. for theconstructionofnew generatingcapacitythatshouldcover themajor for closetohalfofTurkey’s electricitygeneration andtheissuanceoflicences distribution. Thishasresulted inprivatepower generationalready accounting increased accessandincentives forprivateinvestment ingenerationand has courageouslyraisedelectricity pricestoreach cost-reflective levels and electricity capacityinamore competitive Turkey fashion. andsustainable have toencouragesufficient steps already resulted inconcrete andvital and regulations, backed by anindependentregulator, Thesereforms EMRA. policyreforms andenlightened builtaround ambitiouslegislation difficult In response tothischallenge, the government hasembarked onapathof competitive oilandgas reducing itsgrowth supplies,significantly potential. accessto related toelectricitysecurityandlimited theprospectfaces ofrisks inthemeantime,Turkey policyshifts crisis,andwithoutsustained financial needs. With the2008/09 higheconomicgrowth toresume expected after tomeet ofitsenergy itsrapidly growing needsby imports quarters energy hydropower, initsenergy security, major factors Turkey covers almostthree- world’s growing fastest economiessince2001. Except forabundantcoaland (2005) indeveloping anenergy sectormore compatible withoneofthe Turkey progress hasmadesubstantial sincethelastIEAin-depthreview rather thanforcompeting purposes. VAT only, theuseoffuelsforelectricitygeneration favours system andthetax 5onOil).Electricityissubjectto function (see Chapter fiscal had animportant ongasolinetaxes anddieselare relatively highandthey have traditionally quality ofenergy andthecontent alsoaccordingtoend-usergroup. Excise component. accordingtothe Excise are taxes fixedperunitofenergy andvary environmental purposesanddonot aretaxes includeaspecific usedforfiscal Turkey leviesan18% (VAT) value-added tax onallenergy products. Generally, rapid growth infossilfueluse. control willcontinuetorequire especiallyinlightoftheexpected attention, from motor vehicles formotor andquality fuels.Airpollution standards hasimproved toseveralperformance new regulations thanks onemissions sector,gas desulphurisationunits,andinthetransport environmental For example, power oldcoal-fired plantsare beingequipped withflue In recent Turkey years, hasimproved itspoliciestocontrol airpollution. develop itsapproach onthebasisofitsspecialcircumstances. of thepost-2012 changeregime, climate Turkey hasbeenworking tofurther Inview nuclearpower,efficiency, transport. fuelswitchingandsustainable

the government should streamline and significantly shorten the approvalthe government and shorten shouldstreamline andsignificantly underpin economicgrowth, energy securityandenvironmental protection, In lightoftheneedforconsiderable investment inenergy infrastructure to for gas. plans todevelop arole asamajor transitroute andacompetitive tradinghub asamodelforthecountry’s transit routes fornearby canserve oilproducers play amajor role inthefuture. Turkey’s role indeveloping leadership itsoil Turkish Straits. Ceyhan forallthesepipelinesandthuscould istheterminus ofSamsunwhichwould bypassare the planstobuildapipelinefrom theport region andtheKirkuk-Ceyhan crudeoilpipelinefrom Iraq.Inaddition,there theBaku-Tbilisi-Ceyhannotably (BTC) crudeoilpipelinefrom theCaspian proximity toaround key tofoster 75%oftheworld’s oilreserves pipelinelinks, As arapidlygrowing ofoil,Turkey importer useditsclose haseffectively addressed carefully ingovernment policy. ofairpollutionandgreenhouseterms gas emissions,whichwillneedtobe government, are butmininganduseofcoal/lignite in accompanied by risks demand. Thedevelopment ofindigenousresources isapriorityforthe generation isset toexpandalongsiderapidgrowth projected inelectricity contribution toTurkey’s energy sectorandpower mix;itsrole inpower domesticallyproduced makes lignite, animportant Coal, inparticular market toimprove itsenergy security. to enhanceitsenergy security. Turkey should develop amore competitive gas reform, further positive Indeveloping step. companies, andimplementing whichisavery LNG was recentlyThe righttoimport allforeign extended anddomestic in2001,started have advanced slowly, urgently. andneedtobeaccelerated expanding demandover thenextdecade.Thegovernment’s reform plans, But considerableinvestmenttransit country. willbeneededtomeet rapidly Turkey isamajor tobeamajor andwelllocated naturalgas importer of backtrackingonkey principles. results willdependonrelentless andavoidance implementation but effective the naturalgas sector. Structures forbroad meaningfulreform are inplace, progress, for andconsiderableenergy policy challenges remain, inparticular progress tangible thereform significant todate, processDespite isstillin for energy securityandtheenvironment. energy solutions,withconsiderablebenefits sustainable of nationspursuing for windintheenergy mixisrealised, itwould putTurkey amongtheforefront towards of20GWtarget ofwindpoweraprominent byrole 2020.Ifthisshift alongwithconstructionincentives, toadvance theambitious feed-in tariffs, fromof electricitygenerated renewable sources(renewable electricity)atset to windpower. Turkey thepurchase haslegislationinplaceguaranteeing Alongside itshydropower, note isTurkey’s ofparticular major commitment Turkey shouldgive more emphasis tocompetition asameans 21

© IEA/OECD, 2010 RECOMMENDATIONS 22 ensure sufficient resources toimplement thecomplex energyensure policyagenda. sufficient issues.Thegovernment more resources should toenergy-related substantially market,sector-oriented theTurkish Competition Authoritywillneedtodevote Also,asTurkeyhas adopted. moves towards amore competitive andprivate programmesenvironment torealise theobjectives andenergy it efficiency Turkey willneedtoexpandgovernment resources formarket reform, commitment andintent. woulda target provide aclearindicationtoother countriesofTurkey’s setting an overall quantitative foritsgreenhouse target gas emissions.Such its 2009National ChangeStrategy. Climate However, itshouldalsoconsider energy sector (-7%from thereference in scenariolevel in2020),asdefined The government ofTurkey should: Turkey hassetquantitative forCO target aunilateral and measures. tohelpprioritisethevarious asacriterion policies on cost-effectiveness change, Turkey itsenergy shouldupdate scenarioswithoutdelay and focus Forpreparing itsfuture policies on climate changerelated efforts. the climate capacities. Turkey asacriticalissueconcerning access tofinance considers responsibilities andrespective in accordancewithcommonbutdifferentiated As arapidlygrowing country, itplanstodothisonthebasisofequity and tomitigate change. climate inefforts increasing determinationtoparticipate 26/CP.7). oftheKyoto Itsrecent ratification Protocol signalsthecountry’s inthenew agreement from thatof other Annex-IParties, (through differs policyframework. itsposition,which climate Itaimstointegrateandreflect Turkey isnow developing itsnationalapproach post-2012 for theinternational development. andsustainable energy security by energy efficiency objectives onanequal footing withenergy securityconcerns,toreinforce toplacethesetwo andenvironmental policygoals,itisimportant efficiency impact.regulations toensure AsTurkey asubstantial promotes itsenergy andresourcesto judgewhetherbackingthese there willbeadequate support limiting growth ofcarbonemissions.However, time there hasbeeninsufficient andadvance environmental objectives, including to increase energy efficiency In thepastfew Turkey years, hasputmajor legislationandregulations inplace supply andenergy infrastructure projects. licensing process forelectricitygeneration,includingrenewable energy, gas ◗ Continue to pursue vigorouslyContinue to pursue electricity andnatural gasmarket reform. 2 emissionsfrom the

◗ ◗ ◗ Streamline theapproval andsignificantly shorten andlicensingprocess for Update itsenergy scenarioswithoutdelay and prepare anintegrated energy Ensure sufficient resourcesEnsure to sufficient implement energy thecomplex policyagenda, infrastructure projects. electricity generation, includingrenewable energy, gassupply andenergy including monitoring andevaluationofpoliciesprogrammes. prioritise thevariouspoliciesandmeasures. and climatestrategy, withafocuson cost-effectiveness asacriteriontocost-effectiveness help 23

perfluorocarbons and sulphur hexafluorides) for1%(seeTable andsulphurhexafluorides) perfluorocarbons 1). Carbon dioxide (CO GHG Sulphur hexafluorides (SF Sulphur hexafluorides (PFCs) Perfluorocarbons Hydrofluorocarbons (HFCs) for 15%, nitrous oxide (N Emissions (MtCO Table 373 milliontonnesofcarbondioxide equivalent (MtCO GHGemissionsin2007submission totheUNFCCC,total to amounted increased strongly since1990. AccordingtotheTurkish nationalinventory growth, Turkey’s emissionsofthesixgreenhouse total gases (GHGs)have but itdoesnot have foremissionsreduction. atarget Linked torapideconomic andtotheKyoto Change(UNFCCC)since2004 Climate Protocol since2009, Turkey totheUnited Nations Framework hasbeenaParty Convention on N CH oa 0 0 0 0 0 100 100 100 100 100 100 2007 2006 2005 2000 1995 1990 CO ofemissions(1990Index =100) Total N CH more thanin1990. In2007, CO oa 7. 2. 8. 1. 3. 372.6 332.7 312.4 CO 280.0 Breakdown by gas(%) 220.7 Total 170.0 Nitrous oxide (N SF PFCs HFCs Methane (CH Source: Turkey’s submission totheUNFCCC. 2009nationalinventory Total 2 2 6 O O 2 2 4 4 4 ) 2 O) 2 -eq) 2 Greenhouse GasEmissions, 1990to2007 ) 6 ) 2 O) for 3% and the F-gases (hydrofluorocarbons,O) for3%andtheF-gases 3. 7. 2. 5. 7. 304.5 273.7 256.4 223.8 171.9 139.6 9019 0020 062007 2006 2005 2000 1995 1990 9019 0020 062007 2006 2005 2000 1995 1990 924. 934. 0354.4 50.3 49.3 49.3 42.5 29.2 2 0 4 6 6 7 186 218 172 196 169 184 169 160 146 123 100 100 0 3 6 8 9 219 768 196 365 184 273 165 456 130 503 100 100 . . . . . 9.7 4.6 3.4 5.7 6.3 1.3 accounted for82%ofGHGs,methane accounted (CH 27 08 282 82 82 80 78 82 71 81 515 15 16 18 19 17 . 0 0.4 3.2 0 2.7 2.4 0 0.8 0 0 0 0 . . . 0,9 0.9 0.9 0.3 0 0 132113 ––0000 – 0 – – – – – – 1 ENVIRONMENT 0111 2 -eq), whichis119% 25 4 ) 3 © IEA/OECD, 2010 Figure CO 1. The analysis in this section is based on estimates done by the IEA, using the IPCC default methods usingtheIPCCdefault doneby inthissection isbasedonestimates theIEA, Theanalysis 1. 0.0 0.2 0.4 0.6 0.8 2 9317 9717 9118 9518 9919 9319 9719 0120 052007 2005 2003 2001 1999 1997 1995 1993 1991 1989 1987 1985 1983 1981 1979 1977 1975 1973 26 EMISSIONSFROMFUELCOMBUSTION the late 1980s.the late In2007, Turkey 0.32kg emitted ofCO generation, the only energy-using sectorinwhichemissionsgrew than generation, theonlyenergy-using faster Sources: The CO CO According toIEAdata, all GHGemissionsinTurkey in2007. 109% from 1990 to2007, to265Mt.Fuel for75%of combustionaccounted and emission factors. IntheTurkishand emissionfactors. submissiontotheUNFCCC,CO in 2007 tobe282Mt. were reported but itspositive impact onCO the IEAEurope average (seeFigure 5).GDPdoubledfrom 1990 to2007, of GDP(in2000pricesandpurchasingpower parities),roughly equalling Countries (tonnes ofCO Energy BalancesofOECDCountries , OECDParis,2009. in OtherSelectedIEAMemberCountries, 1973to2008 2 Energy-Related CO intensity oftheTurkish intensity since flat economy hasremained virtually 2 emissionsperthousandUSD/GDPusing2000prices and purchasing power parities) 2 emissionsfrom fuelcombustionincreased by 2 2 EmissionsperGDPin Turkey and intensity was offset by increased electricity was intensity offset , IEA/OECDParis,2009andNationalAccountsofOECD 5 1 5

2 emissionsfrom fuelcombustion 2 perthousandUSD IEA Europe Greece Turkey Spain Italy

300 200 250 100 150 50 0 9317 9717 9118 9518 9919 9319 9719 0120 052007 2005 2003 2001 1999 1997 1995 1993 1991 1989 1987 1985 1983 1981 1979 1977 1975 1973 much smaller, 80%onaverage. heat generationhave tripled,whileincreases have intheother sectors been for9%(seeFigureand other 6).Since1990, sectors emissions from power and for24%accounted for18%, ofallemissions,transport householdsfor12%, On afuelbasis,coalhasremained thedominantsourceofCO Source: ** usingtheIPCCSectoralApproach.* estimated growth; generationhasmore thantripledsince1990, whileitsCO GDP. Electricityuseiscoupledwithindustrialisation,populationandeconomic CO By sector, power andheatgenerationwas thelargestofenergy-related emitter below theworld average of4.4tonnespercapita. They are roughly halfoftheOECDEurope level of7.5 and tonnespercapita higherthanin1990,three-fifths butthelowest withintheOECDcountries. conditions. Turkey’s CO has decreased by only16%, annuallyaccordingtothehydrological varying the gasification ofthecountry. power generation andresidential heating, have increased rapidlyfollowing over whileemissionsfrom theyears, naturalgas use,mostlyarisingfrom higher thanthosefrom naturalgas use(27%). Oilhasseenitsshare decline share since1990. Emissionsfrom were oiluse (30%ofthetotal) slightly (see Figure 7).In2007, for43%ofemissions,arelatively itaccounted stable Million tonnesofCO includes emissions from commercial and public services, agriculture/forestry andfishing. agriculture/forestry other includesemissionsfrom commercialandpublicservices, 2 emissionsin2007, accountingfor 37% Manufacturing ofthetotal. CO 2 Emissionsfrom Fuel Combustion, IEA/OECDParis,2009. CO 2 2 Emissionsby Sector*, 1973to2008 2 emissions per inhabitant, at3.6tonnesin2007, emissionsperinhabitant, are 6 6

Elec. andheat industries Other energy construction Manuf. ind.and Transport Residential Other** 2 since2003 2 intensity intensity 27

© IEA/OECD, 2010 POLICY INSTITUTIONS Figure 300 200 250 100 150 50 28 0 9317 9717 9118 9518 9919 9319 9719 0120 052007 2005 2003 2001 1999 1997 1995 1993 1991 1989 1987 1985 1983 1981 1979 1977 1975 1973 sector, whichincludespower generation). andWorking sectors) Group 4(Mitigationservice ofGHGsfrom theenergy 3 (Mitigation ofGHGsfrom theindustry, buildings, waste managementand Source: ** usingtheIPCCSectoralApproach.* estimated exemption isbasedonthedecision26/CP.7 of2001, tothe whereby Parties not have aquantified obligation to limitorreduce itsGHGemissions. This However, Bstatus. itsnon-Annex itdoes since August2009,andmaintains Turkey andtotheKyoto totheUNFCCCsince2004 has beenaParty Protocol The toconvene change. onclimate hasstarted several ministers, Board onEconomy, chaired by by andattended theDeputyPrime Minister working groups. expert Recently,has ten Co-ordination theInterministerial CBCC includesaTechnical Working Change,which Commissionon Climate policies andmeasures, including theobligations undertheUNFCCC.The Change(CBCC),thebodyinchargeClimate ofimplementing change climate Co-ordinationBoardon theInterministerial changepolicies.Itchairs climate The Million tonnesofCO other includesindustrialwaste andnon-renewable municipalwaste (negligible). Ministry of Energy and Natural Resources andNatural Resources ofEnergy Ministry Ministry of Environment and Forestry ofEnvironment andForestry Ministry CO 2 Emissionsfrom Fuel Combustion, IEA/OECDParis,2009. 2 CO 2 Emissionsby Fuel*, 1973to2008 7 7

is responsible forco-ordinating co-ordinates Workingco-ordinates Group Oil Coal Gas Other**

and reducing CO as reducing oftheeconomy thecarbonintensity from level the2004 by 2020 such andalsoincludessometargets, years) actions(uptoten and long-term medium- inDecember2009.ItcoversEnvironment theshort-, andForestry 19-page of documentwas prepared undertheco-ordinationofMinistry isoutlinedintheNational ChangeStrategysectors Climate document.This Turkey’s approach towards future mitigation activitiesinalltheemitting it totheUNFCCC. 2009,butbysince late thetimeofwriting(April2010) hadnot yet submitted 2007.in January Ithasbeenworking onthesecondNational Communication totheUNFCCC,TurkeyAs aParty National Communication itsfirst submitted and respective capacities. responsibilities of equity andinaccordancewithcommonbutdifferentiated implement policiesandmeasures onthebasis toprotect system theclimate set toincrease, althoughfrom level. alow Turkey’s per-capita approach isto other countriesinthatgroup, implying thatenergy useandGHGemissionsare Annex-I countries.Turkey’s economy willcontinuetogrow tocatchupwith the ofTurkeyUNFCCC recognised thespecialcircumstances incontrasttoother energy-related CO energy-related in2007Communication totheUNFCCCsubmitted anditprojects total Nationalscenario level in2020.Thereference scenarioisincludedinthefirst Efficiency for details); prepare sustainable urban transportation strategies strategies urbantransportation prepare fordetails); sustainable Efficiency 4onEnergy (seeChapter increase theuseofrailways andmaritimetransport To Turkey limitGHGemissionsfrom to transport, efforts planstointensify whichwillhelpreducetargets ofthepower thecarbon intensity sector. Electricity Market and SecurityofSupplyStrategy of2009includesindicative and thegovernment isalsoplanningtodevelop nuclearpower capacity. The sector, switchingtonaturalgas from oilandcoalreduces carbonintensity, improvements, Inthepower especiallyinbuildingsandindustry. andheat and geothermal energy. Italsohas large potential forenergy efficiency potential forhydropower, large untapped very windpower andsolar 8onRenewable AsexplainedinChapter Energy,transport. Turkey has energy, energy nuclearpower, efficiency, fuelswitchingandsustainable GHGemissionsfocusonpromoting tolimitenergy-related renewable Efforts Forestry, by foreseen theendof2010. tobefinalised ofEnvironmentbeing prepared and inaproject by co-ordinated theMinistry and measures forreducing greenhouse gas emissions.TheActionPlanis envisages thepolicies preparation ofaNational ActionPlanthatsets forth Change ActionPlan.Turkey’s NinthNational Development Plan(2007-2013) thelaunchofstrategy, work nowAfter focusesondeveloping aClimate well asincreasing theuseofrenewable energy resources. in 1990. ofthesupplychainas improving supports theefficiency Thestrategy 2 2 emissionsintheenergy sectorby 7%from thereference emissionstoincreaseMtby 2020from to604 126.7 Mt 29

© IEA/OECD, 2010 STANDARDS FORPOWERPLANTS GENERAL LEGISLATION LOCAL AIRPOLLUTION 2. UNFCCC website: http://unfccc.int/resource/docs/2010/awglca10/eng/misc02.pdf UNFCCC website: 2. 30 it 6.5timeshigherthanthe EUlevel. dioxide (SO gradually by 2019. for13standards EUairquality limitvalues pollutants. are tobereached 2000/69/EC, 2002/3/ECand2004/107/EC), BAQAM sets airquality Directive directives (96/62/EC)and its fourdaughter (1999/30/EC, withtheEUAirQualityFrameworkinto forceinJune2008.Consistent Ambient AirQualityAssessmentandManagement(BAQAM), whichentered the European Union. Themainlegal on instrumentforthisistheBy-law Turkey with continuestoharmoniseitslegislationonairquality standards planbefore the15 stated country’s and Turkey Onagenerallevel, the intheseefforts. isactively participating apost-2012 toestablish efforts International policyregime climate continue incentives torenew thevehicle fleet. promote theuseofalternative fuelsandnew engines;andprovide technology improve facilities; fuelquality; and plans;expandthepublictransportation than intheEU(seeTable 2).Forexample, thenitrogen oxides (NO forlarge pow Emission standards plant was to1300mg/m tightened of capacityis800mg/m for new power solidfuel-fired plantswithmore than300megawatts (MW) from other Annex-IParties. anddifferences circumstances ignores Turkey’s Parties the distinctionofAnnex-Iandnon-Annex-I special ofmitigationbut underlinesthatadefinition commitmentssolelybasedon Turkey thedevelopments ac supports support. economy financial through transferandmultilateral technology toalow-carbon tolimitemissionsandshift targets adoptvoluntary (NAMAs), December 2009was toimplement nationallyappropriate mitigation actions the differences ofTurkeythe differences from other Annex-IParties. given resources isconsidered financial important, andsustainable predictable 2 ) limitvalue fora100 power MWto300solidfuel-fired 3 inTurkey, but200mg/m er plants remain significantly lessstringent er plantsremain significantly th 3 Conference of the Parties (COP15) Conference oftheParties in hieved undertheCopenhagenAccord, from 2000 mg/m 3 intheEU. Thesulphur 2 Access to sufficient, Accesstosufficient, 3 , whichstillleaves x ) limitvalue

regulatory authority EMRA. Compliance withtheregulation onemissions authorityEMRA. regulatory Fuel quality ismonitored by in81 more than600inspectors citiesby the lowered to10 mg/kg in2010 inlinewiththeEUdirective. kg from limitsforunleadedgasoline 1April 2009. Sulphurcontent willbe diesel oilwas 2007 restricted to50mg/kg from 1January andto10 mg/ Directive ontheQualityofPetrol andDieselFuels. of Thesulphurcontent Regulations onfuelquality have alsobeenrevised, in linewiththeEU since 2009forvehicles registered before 2008. 2008fornew vehicles and hasbeenappliedsinceJanuary IV fuelstandard Forexample,with EUrequirements theEuro benchmarks. providing important Turkey revised regulations hassubstantially foremissions from motor vehicles, pollution: Turkey thefollowing inordertocontrol hasalsoenacted by-laws air 35 andPollution Control). Efficiency from power thecoal-fired 7(see plants are inChapter explainedinmore detail 60 toreduce emissions willapply.of AirPollution Arisingfrom Efforts Industry ontheControl duringwhichthe2009By-law years, a transitionperiodoften 200-400 apply tonew from ofenforcement,butoldplantswillhave facilities thedate Thenew ofstakeholders. limitvalues will in preparation withparticipation 1700 onLarge CombustionPlantsis EC onLarge CombustionPlants.TheBy-law through harmonisingTurkish legislationwiththeEUDirective 2001/80/ 200 forlarge power plantsareEmission standards becomingmore stringent 1 300 Source: 50 to100 MW 100 to300MW >300 MW Plant capacity Table ● ● ● 2005, onAirPollution ControlBy-law Arisingfrom Heating(January Oil (2009). Types ofSulphurinCertain ofFuel on Reducing thePercentage By-Law 2005, amendedin2009); onControlling ExhaustGasesfromBy-law Motorised LandVehicles (July amended in2007 and2009); OECD Environmental Performance Reviews:Turkey SO 2 EmissionStandards for LargeNewPower Plants, 2007 ukyE ukyE ukyEU Turkey EU Turkey EU Turkey 0 5 0 5 0 35 100 850 1700 850 2 000 0 0 0 0 035 60 200 800 200 1 000 Solid fuel (mg/m 2 3 ) . OECD,Paris,2008. Liquid fuel Gas 31

© IEA/OECD, 2010 CRITIQUE MONITORING OFAIRQUALITY 32 Accord. Turkey and predictable emphasised theneedforaccesstosufficient, were not addressed toother intheCopenhagen Annex-IParties and differences Turkey emphasised thatundercurrent formulation, itsspecialcircumstances them,underthe CopenhagenAccord. actions tosupport 2010) set mitigation forthepost-2012 targets periodorproposed mitigation Turkeythis specialstatus, thathasnot (asofMay istheonlyAnnex-Icountry it doesnot have aquantitative emissionsreductionwith Consistent target. Turkey totheUNFCCC: withintheAnnex-IParties hasgained aspecial status thesetwo documentsswiftly. changepolicyandfinalise climate UNFCCC. TheIEAencouragesthegovernment themomentumin tomaintain ChangeActionPlanandthesecond NationalClimate Communicationtothe ChangeStrategya Climate documentanditisnow preparing aNational Communication in2007. InDecember2009,thegovernment published Turkey National totheUNFCCCandcommendably prepared itsfirst isaParty National CommunicationtotheUNFCCC. scenario includedinthefirst toalmostdoubleagainexpected from 2007 to2020 inabusiness-as-usual oxides (NO media by e-mail. andalsoprovidesand PMconcentrationsonitswebsite themdirectly tothe concentrations ofSO 81 provincial andIzmir, centres andinseveral industrialzones.InIstanbul of SO (MoEF)measures ofEnvironment theconcentrations andForestry The Ministry Test andOperationofRoadworthiness Establishment Stations. underthe2005Regulationon atauthorisedstations inspections conducted throughfrom bi-ortri-annual motor vehicles isevaluatedandcertified growth, CO total is alsoachallengeinTurkey. Largely because ofexceptionally strong economic environmental problem, changeisaseriousglobal and Climate energy-related Data onSO Data Turkeytotal, has116 airquality monitoring stations. andinAnkara Saydam bymeasurement Hygiene theRefik stations, Centre. In database are availabledatabase ontheTurkStat onSO MoEFalsopostsdata website. monthly, andannualnews winter bulletins. Allbulletins andtheairquality (TurkStat),Institute which evaluatesthemandthenpublishesin 2 and particulates (PM andparticulates x 2 ) are measured by themunicipalitieswithfullyautomatic andPMconcentrationsare provided totheTurkish Statistical 2 emissions more thandoubledfrom 1990 to2007, andare 2 , PM 10 , carbonmonoxide (CO),ozone(O 10 ) at automatic measurement stations in ) atautomaticmeasurement stations 3 ) andnitrogen 2

efforts inintroducing economicinstruments. Asallother OECDcountries, efforts CO to2020.Indevelopingtargets policiesandmeasures tolimitenergy-related countrieshave noting thatseveral nationalorsectoralGHG non-Annex-I worth signaltoother countriesofTurkey’simportant Itis commitmentandintent. This would ofsuchatarget. provide anddisadvantages an the advantages meaningful quantitative intoconsideration overall foremissions,taking target The IEAencouragesTurkey todevelop policiesandmeasures together witha and urges Turkey develop itsapproach onthepost-2012 tofurther regime. of Turkeynotes relationship theefforts indealingwiththeenergy-climate emphasises theenergy action.TheIEA sectorfortheinitialimplementation The recently comprehensive accepted National ChangeStrategy Climate implications ofany policyframework shouldbeconsidered carefully. toremain tend muchbelowindicators theOECDaverages, and thecost impact assessmentasTurkey’s outaregulatory advisable tocarry development emissions inTurkey, toavoid ahighriskofcarbon“lock-in”. itis Nevertheless, be especiallyusefulforpower generation, t linking toother suchmechanismsinother countriesorregions. Thiswould energy towardsdirect developments, finance butalsofacilitate low-carbon ofacarbonmarket, suchastheestablishment policy frameworks whichcould More pragmatically, Turkey shouldinany caseconsiderdeveloping domestic remain tobedefined. However, orany therulesforuseofNAMAs other possiblemechanisms regime. positionsincethebeginningofclimate has beenthecountry’s mitigation andpossible other actions(NAMAs) mechanisms.Indeed,this nationallyappropriate Action Planand,thus,itseligibilityforusingsupported Turkey undertheBali asadeveloping country couldalsoargue itsstatus device. Implementation to more carbonmarket revenues, assess theprospects inordertogain foradoptingan emissiontarget access However,the private-sectorentitiesengaged incarbonoffsets. Turkey should the UNFCCCframework, suchasfundsfrom theWorld Bankorfunds from Without Turkey anemissiontarget, Parties. isstilleligibleforfundsoutside like oradoptingatarget withoutanemissiontarget, other Annex-I Party In practice,Turkey asanAnnex-I itsstatus hastwo options:maintaining environmental performance. changewouldclimate alsohelpTurkey improve both itsenergy securityand measures tomitigate it willneedforlimitingemissions.Cost-effective Turkey thenew candraw technology sourcesforfinancing oninternational capacities. Decisionsonfuture commitmentshave implications onhow much responsibilities andrespective in accordancewithcommonbutdifferentiated developing itspost-2012further approach anddeterminingitscommitments, resources. Onthisbasis,Turkey financial sustainable hasbeenworking on 2 emissions, it is important to address cost-effectiveness andtoincrease toaddress cost-effectiveness emissions,itisimportant e.g. through theKyoto Protocol’s Joint he fastest growinghe fastest sourceofCO 33 2

© IEA/OECD, 2010 RECOMMENDATIONS 34 The government ofTurkey should: enforcing airpollutionstandards. resources formonitoringand The government sufficient shouldalsoallocate existing large androad-maps combustionplants,cleartargets are necessary. shouldbeset whereashighest available fornew for plantsandcars, standards The andefficiently. are implementedensure effectively thatthesestandards forairemissionsandfuelquality,continue tostrengthen standards and toreduce localairpollution.Itshould government shouldincrease efforts rapidgrowthdone, especiallyinlightoftheexpected infossilfueluse.The vehicles formotor andquality fuels.However, standards more needstobe has improved toseveral new regulations thanks onemissionsfrom motor sector, desulphurisation units,andinthetransport environmental performance For example, power oldcoal-fired plantsare beingequipped gas withflue In recent Turkey years, hasimproved itspoliciestocontrol airpollution. policies across allrelevant government bodies. Turkey andenergy co-ordinationinclimate shouldalsoensure sufficient ◗ ◗ ◗ ◗ ◗ ◗ Further develop itsapproach onthepost-2012 climatepolicyregime. Ensure sufficient co-ordination inclimateandenergyEnsure policiesacross sufficient all Finalise, withoutdelay, anationally appropriate climatechange actionplan Continue and increase efforts to reduce localairpollutionby strengtheningContinue andincrease efforts to introduce economic Focus andincrease oncost-effectiveness efforts Consider developing policiesandmeasures together withameaningful are implemented and efficiently. effectively standards forairemissionsandfuelquality, andensure thatthesestandards relevant government bodies. CO instruments whendeveloping policiesandmeasures to limitenergy-related into accounttheadvantages anddisadvantages ofsuch atarget. encourage forprojects internationalcarbonfinance inTurkey, whiletaking quantitative overall target foremissionsinorder to limitGHGemissionsand and thesecondNationalCommunicationto theUNFCCC. 2 emissions.

100 20 40 60 80 932008 1973 0 in 2010. thegovernmenteconomic slow-down, theprojections isplanningtoupdate butalsotoincludetheimpact ofthe forexampleseveral sectors, inservices, andtheresidential sector.industry To growth faster-than-expected reflect in TFC roughly todoublefrom 2007 to2020,withabove-average growth in In projections thegovernment madebefore theeconomicslow-down, expects strongreflecting economicgrowth. overhas increased substantially thepasttwo decades(seeFigures 8and9), energy terms, useinallsectors their share decline.Inabsolute moderately increased slightly, andresidential havethat ofindustry seen whiletransport 1990, sectorinTurkey andtheprimary theshare ofservices hasdoubledand for theresidential sectorand17% sector. Since andtheprimary forservices the IEAaverages in2007 26%forindustry, 21% were 36%fortransport, for13% sectoraccounted andtheprimary services Incomparison, ofthetotal. Theresidentialthe total. sectorused27% 21%, ofTFCandtransport while up 91% from 1990. was thelargest user, Industry accountingfor39%of Turkey’s consumption final ofenergy (TFC)was total 76.5 Mtoein2007, Source: * Mtoe includes commercial, public service, agricultural, fishing and other non-specified sectors. agricultural,andother non-specified fishing other includescommercial,publicservice, Energy BalancesofOECDCountries, 9818 9819 982003 1998 1993 1988 1983 1978 Total FinalConsumptionby Sector, 1973to2008 IEA/OECD Paris,2009. 8 ENERGY EFFICIENCY 8

Residential Other* Transport Industry 35 4 © IEA/OECD, 2010 Figure 20 25 30 35 40 20 25 30 35 40 20 25 30 35 40 10 10 10 15 15 15 0 5 5 0 5 0 36 1973 1973 1973 Mtoe Mtoe Mtoe Source: * negligible. Total FinalConsumptionby Sectorandby Source, 1973to2008 Energy BalancesofOECDCountries, 9818 9819 9820 2008 2003 1998 1993 1988 1983 1978 2008 2003 1998 1993 1988 1983 1978 9818 9819 9820 2008 2003 1998 1993 1988 1983 1978 Households andServices Transport Industry IEA/OECD Paris,2009. 9 9

Heat Oil Oil Oil Electricity Coal Gas and waste renewables Combustible Coal* Electricity Gas Electricity Solar* Geothermal* and waste renewables Combustible Coal* Gas Solar*

0.20 0.30 0.00 0.10 9317 9717 9118 9518 9919 9319 9719 0120 052007 2005 2003 2001 1999 1997 1995 1993 1991 1989 1987 1985 1983 1981 1979 1977 1975 1973 energy efficiency studiescarriedoutby theEIE. energy efficiency anditsteers andassessestheireffectiveness; theirimplementation monitors plans andprogrammes; strategies, it it prepares nationalenergy efficiency Board (EECB).Itwas set upin2007 andhasthree mainareas ofresponsibility: Co-ordination multi-stakeholder bodyistheEnergy Efficiency An important Administration (EIE). work isdelegated totheElectricalPower andDevelopment ResourcesSurvey policyinTurkey.responsibility forenergy efficiency Within theministry, this ofEnergy andNatural Resources(MENR)hastheoverallThe Ministry Sources: growingincreasing wealthofthecountry’s population. by theexpandingenergy uselinked tothe this reduction hasbeenoffset industry, but thaninthemore growth energy-intensive by faster inservices the IEAEurope average (seeFigure 10). Energyhasbeenreduced intensity needed 0.11 energy, tonnesofoilequivalent (toe)ofprimary 12% lessthan In 2008,foreachthousandUSDofgross domesticproduct (GDP),thecountry Turkey’s energyhasremained intensity over relatively stable thepastdecades. Countries (toe per thousand USD at 2000 prices andpurchasing(toe perthousandUSDat2000prices power parities) Energy Intensityin Turkey andinOtherSelectedIEAMember Energy BalancesofOECDCountries , OECDParis,2009. Countries, 1973to2008 , IEA/OECDParis,2009andNationalAccountsofOECD 10 10

IEA Europe Greece Turkey Spain Italy 37

© IEA/OECD, 2010 BUILDINGS OVERVIEW POLICIES ANDMEASURES 38 policies andmeasures. legislationunderthe2007Secondary law inthefollowing sectoral isdetailed andrenewable andincentives energy toincreasefines); use. energy efficiency trainingandawareness;across sectors; penaltiesformisconduct(typically services fordelivering energy efficiency administrative structure and tasks sector (generation,transmissionanddistribution).Thelaw hasfourpillars: andbuildings,aswellthepower services industry, transport, manufacturing sectors: scenario projections by thelargest 2020 andtargets energy-using The 2007 law aimstoreduce energyby intensity 15% below thereference Strategy isunderpreparation. Energy Efficiency policy. ofthe and toolsfordeveloping Anupdate anationalenergy efficiency of theEuropean Union. includesthegeneralprinciples strategy The2004 Strategy’s goalofharmonisingTurkey’s legislationwiththat energy efficiency and thesubsequent Energy These,inturn,meet Efficiency the2004 by-laws. Turkey’s policyisguidedby Law the2007 energy Energy efficiency Efficiency andtheCommodityExchange ofTurkey.Chambers Turkish Union andArchitects, ofTurkish Engineers Municipalities,Union of Technological ResearchCouncilofTurkey (TÜBI Authority,Market Regulatory Turkish Authority, Standard and TheScientific PlanningOrganisation, ofEducation,State TurkishMinistry Treasury, Energy of EnvironmentPublicWorks andSettlement, andForestry, Ministry Ministry andTrade, Affairs, ofInternal ofIndustry Ministry Ministry ofTransport, ofFinance,Ministry of Energy andNatural Resources,Ministry from thefollowingEECB includesseniormembers bodies:Ministry sixteen requirements ofPublic Works were in December2008by adopted theMinistry Measures requirements. onnew buildingsfocusonenergy performance These ofNational Education,April2009). inSchools(Ministry of Energy Managers Public Works andSettlement, December2008);iv)RegulationonAppointment of ofBuildings(Ministry onEnergy Performance October 2008);iii)theBy-law ofEnergy andNaturalof Energy Resources, andEnergy Resources(Ministry fortheUtilisation onImprovingApril 2008);ii)theBy-law Energy Efficiency ofPublicWorks andSettlement in inBuildings(issuedby theMinistry Systems Heating andDomesticHot Water ExpensesinCentralHeatingandHot Water inbuildings: framework forenergy efficiency LawThe 2007 andthefollowing set thelegal fourby-laws Energy Efficiency ˙ the By-law onSharingthe i) theBy-law TAK), Union of ofChambers

use atleast500toeperyear orhave atleast20000m buildingswhich Theseobligationsfines. alsoapplytocommercialandservice consumption totheEI annuallyonenergy appoint orcontractanenergy managerandtoreport Law the2007 to obligeslargeFurthermore, energy users Energy Efficiency from 2008. years withinfive forexistingbuildingsmustbeinstalled The meteringsystems distribution ofheatingcostsaccordingtothequantity ofheatconsumption. their combinations are classified fromtheir combinations are A++toG. classified 2010,operating manuals.Sincethe endofJanuary and freezers refrigerators, required toincludeenergy consumption sectionof informationinaseparate are andimporters appliances. Producers class Aisforthemostenergy-efficient from Appliancesare anddishwashers. A toG,where classified tumble-dryers EU directives. Itcovers lamps, ovens, washing freezers, machines, refrigerators, energy labellingofdomesticappliancesisharmonisedwiththe Mandatory by May certificate energy performance class.Existingbuildingswillberequiredtheir energy performance tohave an indicating All new buildingsmusthave certificate anenergy performance relevant andtrainingsessionsby authoritiesthrough July2010. seminars a new and calculationtoolisplannedforintroduction engineers toarchitects, Buildings (2002/91/EC). Theconceptof anintegratedbuildingdesignand follow EUrulesthatare laidoutintheDirective of ontheEnergy Performance Alltheserequirements andcentralisedair-conditioningsystems. boilers largely regular alsomandates inspectionsof heating, coolingandlighting.Theby-law Therequirementsenergy performance. cover energy needsforspaceandwater to major renovation, andincludesacommonmethodology forcalculatingthe ofnew buildingsandthatareon theenergysubject performance aone-year sets minimumstandards transitionperiod.Theby-law Buildings after theRegulationonHeatInsulationforNewand Settlement andsuperseded of 1000m public institutionswere replaced withcompact lamps. fluorescent organisations, of ofprofession withthestatus municipalitiesandchambers per therequirement ofthecircular, 1.8 millionincandescentlamps inpublic 2008/2 and2008/19 As UsageofEnergy inPublicSectors. ontheEfficient Public buildingshave obligations circulars specific underthePrimeMinister’s from October2008. project withinthree an energy years auditandprepare anenergy efficiency least 250toeperyear, orhave atleast10 000m Utilisation ofEnergy andEnergy Resources,publicbuildingswhichuseat per theprovision forthe oftheRegulationonImproving Energy Efficiency 2 ormore musthave thatallow the centralheatingandusesystems ˙ E. Failure tocomply withthisobligation willleadto

2017. area New buildingswithafloor 2 of floor area, mustundergoof floor 2 of floor area. As of floor 39

© IEA/OECD, 2010 INDUSTRY . Onaverage in2009,oneTurkish lira(TRL)=USD0.647. 3. 40 17 projects of12 energy efficiency industrialestablishments. by theEECB.Recently, for theEECB hasdecidedtograntsupport financial agreements commissionsandapproved are evaluatedby expert voluntary agreements. Requests forboth undervoluntary project subsidiesand support agreements toreduce their energyand11 intensity ofthemwere for selected Moreover,in industry. 24 industrial plantshave intovoluntary appliedtoenter improvements toenergy efficiency support forfinancial TRL 5millionisallocated andTRL1millionforprojectsmotors, improving For2010, energy efficiency. ofelectric withTRL4millionforimprovingsupport, theenergy efficiency some 16 ktoeofenergy. For2009,TRL5millionwas infinancial allocated projects; theseprojects are tosave expected of72energy efficiency for atotal have support As ofMay 2009,55industrialestablishments appliedforfinancial costs (toamaximumofTRL100 year. 000)forthefirst on average over upto20%oftheirenergy three theEIEwillreimburse years, thathaveestablishments volunteered toreduce theirenergyby intensity 10% of eligibleproject costsuptoamaximum ofTRL500000 covers atmost20% maximum payback Thissupport years. periodoffive projects witha The EIEprovides forenergy efficiency investment support utilising waste heatofthermalpower plants;andutilisingalternative fuels. requirements fornew plants),transmission,distributionandpubliclighting; ofpowerimproving plants(alsoby setting minimumefficiency efficiency and awareness. Inpower generation,themeasures focusonmanagingdemand; agreements, monitoring,andtraining voluntary support, management, financial focusonenergy measuresindustry inmanufacturing Energy efficiency (SMEs)includingTraining,sized Enterprises Services. AuditandConsultancy ofSmallandMedium- Energy, Energy Efficiency onSupporting andtheBy-law fortheUtilisationofEnergyon Improving Resourcesand Energy Efficiency Law andtwo published inOctober2008:theBy-law related by-laws Efficiency are basedonthe2007 measures inindustry Energy Energy efficiency electricalhomeappliancesandlightbulbs. air-conditioners, motors, electric forindustrialanddomesticboilers, standards energy performance andTrade ofIndustry haveand theMinistry already jointlyprepared minimum is gradually forcloseto20product proposing groups. suchstandards TheEIE over thenextseveraleffective Sinceautumn2008,theEUCommission years. EU regulations undertheEcodesignDirective (2005/32/EC)andwillbecome willbebasedon forappliances.Thesestandards standards energy efficiency Turkey isalsoharmonisingitslegislationwiththeEUtointroduce minimum 3 . Forindustrial

According to the International TransportAccording to the International Forum,the densityoftheTurkish The road networkinthe coming years. isset tobeexpandedsubstantially closely linked todevelopments intheoverall economy. tonne-kilometres in2007, for5%.Freight whilerailaccounted volumes are 31% since 1990. Asregards for95%ofall accounted freight, road transport increased by around hasdeclinedby 8%.Railway useforpassengertransport tripled from 1990 to2007, whilepassenger-kilometres by busesandcoaches volume by ofTransport, passengercars traffic According totheMinistry in2007,92 per1000inhabitants wellbelow theEU15 average of500. thanin 1995.more passengercars Cardensityhasrisenfrom 51 in1995 to (seeTable thanpublictransport faster 3).Turkey hasnow some3.5million halfofthepastdecadeandhave continuedtoincrease inpopularity first becamethedominantformofpassenger travelPrivate cars inTurkey inthe credit optionsforprivateprojects toimprove energy efficiency. several Turkishtooffer finance. have alsostarted efficiency privatebanks institutionstoimprovewith several financial international accesstoenergy companies asofthebeginning2010.consultancy Turkey isalsoworking EI Inthiscontext, services. efficiency whileconductingenergy inend-use sectors financing provide third-party companies whichcould consultancy the legal framework forenergy efficiency the privatesector. Law The2007 addresses theseby setting Energy Efficiency are in criticalforimprovingexperience, andaccesstofinance energy efficiency a priorityfortheTurkish privatesector. Developmentand ofknow-how tobecome The government ofenergy efficiency isworking toraisethestatus reduced by 22%andincementplantsbycould becost-effectively 28%. and usingnew process Forexample, technologies. consumption plants insteel improved chemicals)couldbesignificantly cement, textiles, by replacing equipment (includingiron andsteel, inindustry According totheWorld energy efficiency Bank, used tocover upto70%ofthecostsforfeasibilityandother studies. technical andTrade. ofIndustry Thesesubsidiescanbe totheMinistry institution connected isalsoprovided toSMEsforimproving by KOSGEB,Support energy efficiency an onenergy consumption totheEIE. capacitymustalsoreport of installed consuming more thanonektoeperyear andpower plantswithatleast100 MW ontheirenergy managementactivities toEIE.Industrialplants obliged toreport industrialzones.Thecompanies management unit,andsomustspecific are manager. Plantsconsumingmore than50ktoeperyear mustset upanenergy least 1000toeperyear oneoftheiremployees tonominate astheenergy LawThe 2007 requires Energy Efficiency industrialplantsconsumingat ˙ E hasauthorised12 energy efficiency 41

© IEA/OECD, 2010 42 Share, % b) for1974, 1975 and 1976 models,TRL0.9perkg; andc) as follows: a)for1973 vehicles, TRL0.7 perkg; andoldermodelheavy-duty incentive isbasedonvehicle weightandvaries accordingtothemodelyear vehicles (withatleast 16transport seatsincludingthedriver’s seat).The duty vehicles (i.e.thoseweighingmore than3.5tonnes)andpassenger Turkey has alsointroduced acash-for-clunkers incentive forpre-1979 heavy 2009. 1January produced after applies topassengercars reduce congestioninoneofEurope’s largest cities. and willhelpto andupgrading train system, of new thecommuter stations of thecitythrough two railway tunnels.Theproject includesconstructing tens Marmaray thatwillconnecttheEuropean project andAsianparts inIstanbul inlength,butmany aspectsmore challengingtoimplement isthe Shorter travelbecome afaster optionthanthecurrently dominatingprivatecar. andAnkara-Konya.Ankara-Afyonkarahisar-Izmir Ontheseroutes, trainwill commence inthefollowing routes Istanbul-Ankara-Sivas, inthenextyears: and Eski to connectTurkey’s maincities.Thehigh-speedrailway between Ankara been builtsince1980, butahigh-speedrailnetwork isnow beingdeveloped railway network, at9111The arterial km,isratheroldandonly736kmhas programme envisages more thandoublingthelengthofcurrent network. in 1990, motorway construction medium-andlong-term andthecountry’s Turkey now hasmore seven than2000kmofmotorways, timesmore than comparison, theEU25average is110 kmper100 km². road network, excluding urbanroads, isaround 47 kmper100 km².In Consumers onFuel EconomyConsumers andCO Vehicle onInforming 2009By-law labellingwas introduced by theJanuary advanced signallingsystems. and installing promotingvehicles; standards; publictransport; improving energy efficiency in June2008.They fuelconsumption focusonreducing specific fordomestic inTransport ofTransport whichwasEnergy issuedby Efficiency theMinistry fuels. More recent measures were onImproving introduced intheBy-law relatively toincome,have useoftransport given strong incentives forefficient policy. 5),mostlyaresult(see Chapter offiscal Highprices,especially Diesel andgasoline costmore inTurkey thaninalmostany other IEAcountry Mode Table Source: Ministry ofTransport andCommunication,2009. Ministry sehir hasbeeninoperationsinceMarch2009,andoperationswill , Breakdown ofPassenger Travel by Mode, 2008 Car 56 2 3 Emissions of New Passenger Cars, and Emissions ofNew PassengerCars, u n oc Train Bus andcoach 42 for 1977, 1978 2

population and TFC per capita isstilllow.population and TFCpercapita and appliances willcontinue Cars demand amongtheIEAmember countries.Ithasayoung andurbanising Turkey will likely growth medium-tolong-term seethefastest inenergy Forumwas organised on13-14Efficiency 2010 January inIstanbul. TheSecond National Energy participating. experts national andinternational Forum(15-16 Nationalthe First Energy Efficiency with 2009inIstanbul), January Week year. included every The2009Energy Efficiency the secondweekofJanuary Week LawThe 2007 organising mandates in anEnergy Efficiency Energy Efficiency changeandenvironmental protection. inclimate energy efficiency useofenergy indailylife;andtherole of efficient energy generationtechnology; ofTurkey; generalenergy status of energy andenergy efficiency; energy resources; schools andsoldiertrainingcentres. Theareas tobecovered includebasicconcepts andeducationprogrammesagencies andinstitutions,inthecourse ofmilitary in thecurriculaofhighereducationinstitutions,trainingprogrammes forpublic related publicagenciesandinstitutionsare obligedtoprovide energy information ofNationalThirdly, ofNationalDefenceand Education,theMinistry the Ministry include average dailyconsumption intheinvoices figures totheir customers. ofelectricitymustalso average suppliers Retail values intheir consumercategory. monthly consumption, ontheirpeakconsumption andacomparison withthe onthevolume andcostoftheir informationtotheircustomers on-line detailed Secondly, mustprovide andother electricityandnaturalgas suppliers retailers and inpublicmediaordertoincrease publicawareness. are widelyusedinschools Informationprogrammes onenergy efficiency staff. and anawareness campaign forshopping centres toempower and customers inindustry; motorawareness systems campaign forpromoting energy-efficient 2009);an light bulbstothecitizens(4.8millionby February energy-efficient year. toEIEinMarchevery Examples ofmeasuresreported includedistributing measures The measures are ontheEIEwebsite. taken listed have tobe with theEIE,orby contributingtotheactivitiesofEIE.Thespecific agencies andinstitutionshave topromote awareness, eitherinco-ordination to raisingawareness onagenerallevel, public-sector First, ofenergy matters. of Energy and Energy Resourcesobligesseveral publicentitiestocontribute fortheUtilisation onImprovingThe October2008By-law Energy Efficiency vehicles from themarket. this incentive, thegovernment expectstoremove 160 000oldandinefficient vehicles, 2009.With iftheiroperatinglicencewas registered before February and 1979 models,TRL1perkg. AnadditionalTRL750isavailable forthese 43

© IEA/OECD, 2010 44 according to international best practice. according tointernational andset thesestandards but, where applicable,itcouldgoeven further for appliancesandlighting standards in setting minimumenergy performance imply moreRising livingstandards appliances.Turkey islikely tofollow theEU buildingcomponents forboth new andexistingbuildings. for high-efficiency Thegovernment shouldalsoconsiderincentivessolutions becomecost-effective. components and asmore efficient should regularly thesestandards update for buildingcomponents. Thisislaudable.Over thegovernment thecomingyears, In thebuildingssector, Turkey standards hasrecently set minimumperformance improve energy security, save money andmitigate change. climate continue toincrease asameansto publicawareness ofenergy efficiency gains and possibilities foreconomicincentives energy toaccelerate efficiency itshould examine inthearea Furthermore, ofenergy efficiency. qualified staff resources knowledge andmechanisms,technical the needforfinancial and level, TurkeyOn ahorizontal toaddress itsefforts shouldcontinueandintensify at leastonanindicative level. thegovernmentcontext, shouldalsoconsidersetting more ambitioustargets, andtransparency ofpolicies.Inthis legislation forsecuringthepredictability without delay. Itshouldalsoregularly review itsenergy andupdate efficiency coherent manner, Turkey Strategy shouldrevise Energy Efficiency the2004 To ina structured helpprepare and forfuture work onenergy efficiency consumption andefficiency. encourages thegovernment toimprove energy onsector-specific statistics and adjustitspoliciesmeasures, Forthispurpose,theIEA asnecessary. andraisingpublicawareness.various sectors; Thegovernment shouldreview projects in energy efficiency market; supporting service an energy efficiency improvements Prioritypoliciesandprogrammes inenergy efficiency. include reference scenarioprojections by 2020andhaswide-rangingplansforfurther Turkey isaimingtoreduce itsenergyby intensity atleast15% below the share itslessonslearnedinadvancing energy efficiency. guidance forother emerging economiesandtheIEAencouragesTurkey to Turkey’spatterns. valuable willoffer experienceinpromoting energy efficiency other countriestoavoid energy consumption lockingitselfintounsustainable them. More generally, Turkey ofthebestpractices shouldtake advantage and encouragesTurkey tomobilisealltheresources neededforenforcing LawThe IEAapplaudsthe2007 andthesubsequent by-laws Energy Efficiency securing energy supplies,reducing pollutionandsaving money. for ofenergy efficiency topay tothebenefits closerattention started years government’s mainenergy policyconcern.Commendably, Turkey hasinrecent energy toagrowing economyEnsuring sufficient hasbeenandremains the new construction. significant willalsosee to becomemore popularincomingdecadesandthecountry

vehicles vehicle and regulate non-motor energy components thataffect over road. Turkey for shouldalsoset ambitiousfueleconomy standards railshouldcontinuetobepromoted passengertransport, and long-distance Infreight andnon-motorised transport. pricing, road pricing,publictransport policies across several areas, including land-useplanning,parkingsupplyand the fast-growing urbanareas, thegovernment shouldconsiderintensifying More shouldbedone,however, future. In transport toensure asustainable standards. as wellforimproving fuelefficiency welcomes Turkey’s vehicles recent initiatives forreplacing oldandinefficient TheIEAalso and willthusbringenvironmental andenergy securitybenefits. inpassengertravel,general. Itwillhelpreduce the dominance ofprivatecars for developing ahigh-speedrailnetwork andincreasing theuseofrailways in applauds Turkey’s TheIEAinparticular system. of thecurrent transport plans The government character recognises theneedtochange theunsustainable not there yet andcanstillavoid this scenarioby decisive action. thatisalltoocommonintheother IEAcountries.Crucially,system Turkey is way car-andoil-basedtransport tolockingitselfinthesameunsustainable will likely withGDP. continuetoexpandintandem Turkey Inshort, isonits isstilllow,engines. Carownership butrapidlyincreasing, andfreight transport combustion isby internal road, invehicles driventransport by inefficient As inmostother IEAmembercountries,almostallpassengerandfreight sector. and thefinance energy inboth efficiency, industry government shouldcontinuetoraiseawareness ofthebusinessrationalefor and trainingare allaimedforthatpurpose.Asthisisanew approach, the financing companies (ESCOs),third-party hanging fruititself.Energy services togoandpickthe low- has therefore forhelpingindustry commendablyopted payback measures havetimeandthegovernment ashort energy efficiency havemanagers beentrainedintheprogrammes envisaged by thelaw. Many largest end-use sector(39%ofTFCin2007).energy Hundreds ofcertified forindustry, the anenergy managementsystem successfully established gains. Turkey potential forefficiency energy andhassubstantial of final has subsequent Thisislogical,asthesectoralsolargest consumer by-laws. isoneofthe focusareas Law ofthe2007 andthe Industry Energy Efficiency should considerstronger incentives fortheiruptake. coolingandheating, andthegovernment providing both energy-efficient and consumption. attractive for Heatpumps technology are aparticularly that thegovernment isspendingonsubsidisingboth electricitygeneration consumption ofelectricityforair-conditioning,they would alsosave money andpavements. forroofs Asthesemeasureslight colours would reduce the consider forlimitingthisdemand,suchasnaturalshadingandtheuseof projections. There measures are thatthegovernment several low-cost should air-conditioning islikely tocontinuegrow, change alsoinlightofclimate attention. Air-conditioning shouldbeafocusofparticular

Energy demandfor 45

© IEA/OECD, 2010 46 Box then, ninenew recommendations have been added(Box 1). theinitial16 endorsed (G8). TheIEAenergy ministers measures in2007. Since policyrecommendations theIEApresented totheGroup ofEight efficiency its work withtheenergy inmakingitsnationalpoliciesfullyconsistent To improve energy theIEAalsourges efficiency, thegovernment tocontinue tothiseffect. strategy develop, adoptandimplement aholistictransport on oilforalmostallofitsenergy needs,increase oilsecurity. Turkey should isthelargest oil-consumingsectorandrelies air quality and,astransport Changing thecurrent trend would helpsave energy, avoid congestion,improve vehicles. used tofavour thepurchase ofmore efficient (e.g. efficiency across sectors. In across sectors. TheIEArecommends actiononenergy efficiency 1. Japan in July 2008. The fields ofactionare outlinedbelow.Japan inJuly2008.Thefields recommendations were presented tothesummitofG8inHokkaido, andpower utilities.These25 industry appliances, lighting,transport, ofactionacross sevenfields priorityareas: cross-sectoral activity, buildings, policyrecommendations coveringprepared 25 aset ofenergy efficiency policies.Respondingtothisrequest, theIEAsubsequently energy efficiency G8 countriesasked theIEAtoassistindeveloping andimplementing At theGroup ofEight*(G8)Summitin2005Gleneagles, Scotland, the 2. IEA G8EnergyEfficiency Recommendations particular, theIEAcallsforactionon: save a significant portion ofthisenergy,save portion asignificant theIEArecommends actionon: Buildings accountforabout40%ofenergy usedinmostcountries.To ● ● ● ● ● ● ● ● ● ● Measures forincreasing investment inenergy efficiency. recommendations themselves. progressMonitoring andreporting withtheIEAenergy efficiency indicators. Energy efficiency measures. efficiency Compliance, monitoring,enforcementandevaluation of energy andgoals. strategies National energy efficiency Energy efficiency improvementsEnergy inglazed efficiency areas. schemes. Building certification inexistingbuildings. Policy packages topromote energy efficiency Passive energy housesandzero-energy buildings. Building codesfornew buildings. tyre rollingandtyre pressure). resistance Taxation shouldbe

7. 7. 60%ofworld oilisconsumedinthe About 5. efficiency onaglobal scale. efficiency these measures set outanambitiousroad-map forimproving energy in whichnonew policiesare orimplemented. adopted Taken together, energy-related CO energy-related huge cost-effective energy andCO huge cost-effective recommendations canleadto ofIEAenergyImplementation efficiency Inordertoimprove in energy efficiency 6. 4. cost- isvery lighting technology Saving energy by adoptingefficient 3. Germany, Italy, Japan, Russia, theUnited Kingdomandthe United States. * TheGroup forumfor the governments ofEightisaninternational of Canada,France, around 8.2GtCO implemented globally withoutdelay, theproposed actionscouldsave significant savings inthissector,significant theIEArecommends actionon: efficiency. Actionis neededtopromote:efficiency. role inpromotingEnergy utilitiescanplay energy animportant effective. TheIEArecommends actionon: effective. energy loadsinmostcountries.TheIEArecommends actionon: Appliances andequipment represent growing oneofthefastest ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Fuel-efficient tyres. Fuel-efficient Collection of high-quality energy efficiency data forindustry. data Collection ofhigh-quality energy efficiency Utility end-use energy efficiency schemes. Utility end-useenergy efficiency sized enterprises. insmallandmedium- Policy packages topromote energy efficiency indeveloping energy managementcapability.Assistance ofelectricmotors. Energy performance Eco-driving. Fuel vehicles. economy ofheavy-duty forlight-dutyvehicles. standards fuelefficiency Mandatory fuel-basedlighting. phase-out ofinefficient Ensuring least-costlightinginnon-residential buildingsandthe andmeasurement protocols. standards test Energy performance Televisions andset-top boxes. networked equipment. power, modes,includingstand-by Low-power forelectronic and Best-practice lightingandthephase-outofincandescentbulbs. requirements energy performance orlabels. Mandatory 2 2 emissionsin2030undertheIEAReference Scenario, /yr by 2030. This is equivalent to one-fifth ofglobal /yr by 2030.Thisisequivalent toone-fifth 2 savings. that,if TheIEA estimates , actionisneededon: industry sector.transport To achieve 47

© IEA/OECD, 2010 RECOMMENDATIONS 48 The government ofTurkey should: ◗ ◗ ◗ ◗ ◗ ◗ Revise the 2004 Energy Efficiency StrategyRevise the2004Energy withoutdelay. Efficiency Adopt and implement strategy aholistic transport to avoid locking the Continue to develop statistics energy onsector-specific consumption Set efficiency standards according toSet efficiency internationalbest practice. Examine possibilitiesforeconomicincentives to accelerate energy efficiency Continue to increase publicawareness asameansto ofenergy efficiency country in an oil-based transport system inanoil-basedtransport dominated by passenger cars. country sectors. gains, especially inthebuildingandindustry improve energy security, save money andmitigateclimatechange. policiesandmeasures. efficiency inorder indicators to developand energy andevaluateenergy efficiency

an area of381 km 845 activities. ByMarch2010, ithadgranted 415 explorationlicences,covering andequipment,duties formaterial andexemption from VAT forexploration exemptionsand production, tax, includingdeductionsincorporate from import toencourageexploration breaks several typesoftax The government offers Turkish Petroleum Corporation(TPAO) accountsforaround 76% ofproduction. milliontonnesatthebeginningof2009(seeTable were 44.4 oil reserves 4). 1999, production was 2.4Mt(48kb/d)in2009.Turkey’s recoverable proven to thedepletion ofresources. WhileTurkey produced 2.9Mt(58kb/d)ofoilin west. Sinceitspeakin1991, domesticoilproduction hasbeendecliningowing Oil isproduced mainlyinthesouth-east ofthecountry, butalso inthenorth- themtomore countries. thanten exported gasoline andfueloil.Turkey oilproducts from more imported than20countriesand (273 to7.6 kb/d),68%ofwhichwas diesel,andexports Mt(152 kb/d),mostly Turkey to13.6 amounted ofoilproducts. In2008,imports isalsoanet importer Mt Domesticcrudeoilproduction providedall imports. 2.4Mt(48kb/d)in2009. The Organization Countries(OPEC)provided ofthePetroleum 60%of Exporting followed by imports), Russiaof total (32%),SaudiArabia(16%) andIraq(9%). camefrom ninecountries,ofwhichIranhadthelargestcrude imports share (35% 21.72008 andimports Mt(435kb/d),or91% demand.Inthesameyear, oftotal Domestic crudeoilproduction provided 2.1 Mt(42thousandbarrels aday) in timesurpassedthatofoil. of naturalgas, which,in2008,forthefirst decline ofoilusehasbeenbrought about by therapidexpansioninuse sincethemid-1990s flat has remained virtually (seeFigure 11). Therelative is wellbelow theIEAaverage (37% oilsupply terms, in2008).Inabsolute of oilinTPEShasbeenslow decline from therecord of46%in1995, and In 2008,Turkey’s to29Mtoe,or30%ofTPES.Theshare oilsupplyamounted intensify capital- and technology-related co-operation inoilexplorationstudies. and technology-related capital- intensify TPAO inthiscontext. attention foreign oilcompanies to withdifferent works production activities.Thecompany’s particular BlackSeastudiesdeserve Since thelastin-depthreview, TPAO hasbeenactive inexplorationand the total. 2 , to48oilcompanies. TPAO holds151 licences,36%of OIL 51 5 © IEA/OECD, 2010 Figure DEMAND 20 30 40 10 9317 9318 9319 032008 2003 1998 1993 1988 1983 1978 1973 52 0 Source: consumption.forestry, andother final fishing agriculture/ includesnon-energy use.Commercial includescommercial,publicservices, Industry * TPESby consumingsector. Other includesother transformationandenergy sectorconsumption. gasoline usefellby 3.9%from 2008to2009. Turkish Association,dieselusedecreased Petroleum by 2.7%and Industry however, Accordingtothe reversed thisupward trend foroiluseintransport. all new vehicle registrations was 56%in2007. has, Theeconomicslow-down fuels, LPGfor14.4% andgasoline foraround 15.7%. Dieselvehicles’ share of foralmost59%ofallroadbeen rising.In2008,dieselaccounted transport sector,from 2000to2008.Within thetransport diesel andLPGusehave also theonlysectorwhere oilconsumption hasgrown strongly, upby 32% Transport in2008)anditis thelargest isby oiluser(49%ofthetotal far Table ilo arl 6786 Million barrels ilo ons994 Source: MENR,GeneralDirectorate ofPetroleum Affairs. Million tonnes Mtoe Energy BalancesofOECDCountries eevsRecoverable Reserves Oil Reserves in Oil Reserves Turkey, 2009 January Oil Supplyby Sector*, 1973to2008 reserves , IEA/OECDParis, 2009. 1 239 177 11 11 4

Cumulative production 939 133 recoverable reserves Remaining Transport Residential Commercial Industry generation Power Other 300 44

Concept, where Turkey has beenanactive contributor. is considered asthepioneerofEast-West Energy CorridorandTerminal along thisroute. BTC pipeline hasalsobeentransported from Kazakhstan sinceOctober 2008oil Caspian.Furthermore, complexfield intheoffshore oil from the Caspianregion, primarily from Azerbaijan andthegiantACG on 4June2006.Thispipeline provides markets aroute to international for tanker with crudeoilfrom theBTCThe first pipelinewas loadedinCeyhan and thenew agreement tobeconcludedsoon. isexpected 15 October2009between Turkey andIraq.Studies are ongoinginthisrespect the Turkish RepublicandtheGovernment oftheIraqiRepublic”was signedon the renewal of“CrudeOilPipelineAgreement between theGovernment of concerning toCeyhan.from AMemorandumof Understanding Iraqioilfields below fullcapacity. In2009,around 23.3Mt(0.47 mb/d)were transported buthave 2004 in Iraq,deliveries remained were well resumed inFebruary annualcapacityto70.9Mt(1.4bringing total mb/d).Following conflict was commissioned in1987,(0.9 mb/d).Asecondpipelineparalleltothefirst capacityfrom 35Mt(0.7mb/d)to46.5 increased annualtransportation loaded inCeyhan inMay 1977. expansionproject, completed in1984, Afirst The Iraq-Turkey oilpipelinewas commissionedin1976 tanker was andthefirst Turkish Straits. through the challengerelating tothevolume ofoiltraffic transportation southwards toCeyhan (theSamsun-Ceyhan pipeline)andonemajor oil runningfrom SamsunontheBlackSeacoast pipeline intheplanningstage, pipeline andtheBaku-Tbilisi-Ceyhan (BTC) pipeline.There isalsoonemajor has two major oilpipelines,theIraq-Turkey international (orKirkuk-Ceyhan) pipelinehasacapacityof86.4kb/day.Batman-Dörtyol Inaddition,Turkey kmCeyhan-KırıkkaleThe 448 pipelinehasacapacityof135 kb/day. The511 km Turkey hastwo domesticcrudeoilpipelines,both owned by andoperated BOTAS of power planttechnologies. the power sector, power oil-fired plantscontinuetobereplaced by other forms from 2007,downturn, seeoiluseincrease by four-fifths In mostlyintransport. government projections until2020,datingfrom before thecurrent economic usedtheremaining 4%.The andfishing) sector(agriculture, forestry primary andthe Oiluseforpowercountry. for5%ofthetotal, generationaccounted half from itspeakinthemid-andlate-1990s, thegasification reflecting ofthe in2007,Oil useinhouseholds,6%ofthetotal hasdiminishedby more than sectorfor11%. for23%ofoilusein2007 accounted andtheservice Industry 53 , .

© IEA/OECD, 2010 54 possibility toexpand thisto1.5 mb/d(75Mtperyear). isenvisagedSea totheMediterranean at1mb/d(50Mtperyear) withthe of theproject. Theinitialcapacityofthis555-kmpipelinefrom theBlack Turkey and theRussian FederationinMay 2010 therealisation tosupport company Transneft. was signedbetween AMemorandumofUnderstanding subsequently included inthe2010 investment planby Russia’s pipeline fortheproject. TheSamsun-Ceyhan pipelinewas itssupport indicated fortheprojectthe perspectives in2009astheRussian brightened Federation Although fullconstructionoftheSamsun-Ceyhan pipelinehasyet tostart, ofRussian andKazakhcrudeoilfrom theBlackSeatoCeyhan. transportation forTurkey significance strategic andthesurrounding region willprovide thesafe the needforany intergovernmentalagreements. Theproject whichhasmajor oftheroute isthatitrunsentirelyAn advantage withinTurkey, thereby avoiding companyand inOctober2005aninternational joinedtheproject. (Enifrom Italy) For therealisation oftheSamsun-Ceyhan pipelineproject, studiesbegan in2003, projects istheSamsun-Ceyhan pipelineproject. that would linkKiyiköy andIbrikbababutthefront-runner amongtheTurkish and two potential pipelineroutes through Turkey. Oneoftheseisaproject Vlore inAlbania,another pipelinefrom Bourgas toAlexandroupolis inGreece, toTrieste,from Constanza theAMBOpipelinefrom Bourgas inBulgaria to ofdevelopment andincludethePan-European stages OilPipeline in different i.e. Brody pipelineinUkraine,butthis iscurrently operatinginreverse mode, that would bypass theStraits. Oneoftheseisalready built,namelytheOdesa- the Turkish Straits, anumber ofadditionalpipelineprojects hasgenerated through markets,access tointernational combinedwithconcernsabouttraffic The prospect ofincreasing volumes ofoilfrom theCaspianregion seeking concerns aboutnavigational andenvironmental safety. busiest chokepoints oiltransit.Turkey forinternational hastherefore raised are lessthan700metres wideattheirnarrowest pointandform oneofthe through theTurkish Straits from to2008(2.62.8mb/d).TheStraits 2004 130 and140 annually Mtofcrudeoilandproducts were transported ofTransport andCommunication,between AccordingtotheMinistry Istanbul. turn increase thevolumes seekingtransitthrough theTurkish Straits around whichin ofadditionalvolumes ofCaspianoiltoBlackSeaports, the delivery A key oftheroute from benefit BakutoCeyhan viaGeorgia isthatitavoids over alongthispipelineroute, filling 1017transported atCeyhan. tankers this hasnot yet beenagreed. Bytheendof2009,around 110 Mtofoilhasbeen capacitythrough thesouthernCaucasus,although demand fortransportation increase incapacityispossiblelightofpotential increase inKazakhstan’s has beenincreased to1.2 mb/dwiththeuseofdrag-reducing agents.Afurther is 1760 kmandtheoriginalcapacitywas 1mb/d.Asof2009,thiscapacity to theTurkish coastatCeyhan.lengthofthepipeline Mediterranean Thetotal The pipelineroute isfrom theSangachal inBaku,Azerbaijan terminal viaGeorgia delivering additional volumes into the Black Sea port of Odesa. Others are ofOdesa.Others delivering additionalvolumes intotheBlackSeaport

Black Sea RUSSIA

BULGARIA GEORGIA Kirklareli Tbilisi Edirne Bartin GREECE Istanbul Artvin Samsun Ardahan Izmit ARMENIA Ordu Trabzon Sakarya Amasya Yerevan Gümüshane Bayburt Canakkale Bursa Ankara Kirikkale Erzincan Eskisehir Yozgat Horasan Balikesir Sivas Erzurum TURKEY BTC 1000 kb/d Aliaga Sarkisla Kirsehir Afyon Elazig Kayseri Selmo SELMO-BATMAN 16 kb/d IRAN Turgutlu Malatya Izmir Aksaray Batman Diyarbakir Konya CEYHAN - BATMAN - DORTYOL KIRIKKALE 90 kb/d 150 kb/d KIRKUK -CEYHAN 1&2 1.4 mb/d Mugla Mardin Karaman Kahramanmaras Antalya Gaziantep Ceyhan Iskenderun Mediterranean Sea Kirkuk Crude oil pipeline Oil storage site IRAQ km SYRIA 0 80 160 Refinery Tanker terminal LEBANON

55 The boundaries and names shown and the designation used on maps included in this publication do not imply official endorsement or acceptance by the IEA. Source: Oil Information, IEA/OECD Paris, 2009.

© IEA/OECD, 2010 MARKET STRUCTURE REFINERIES ANDSTORAGE 56 storage capacityof31 millionbarrels (4.2mcm). (4.1 mcm)ofcapacity, have whilelicensedstoragesanddistributors atotal cubic metres). TÜPRAS obligations storagecapacityof60.9millionbarrels hadatotal (8.3million 2009,asoftheendcompanies with storage Oil SectorReport AccordingtoEMRA’s capacityby thedistributors. about 60%ofthetotal dispersed across Facilities thecountry. dispersed in Izmir, BatmanandKırıkkale. Storage owned are facilities by widely distributors Most storage facilities areMost storagefacilities inurbanareas closetothefourrefineries: projects onhold. oil demandanddeteriorationincredit conditionssince2008have putthese for several new from refineries halfadozencompanies, butthereduction in authority,In 2007 theregulatory hasreceived and2008,EMRA, applications Shell has2%ofthejointventure’s shares. Turkey’s largest industrialconglomerates andthemajority shareholder, while Yatırımları A.S 2006whenthegovernment solditsremaining 51%in January share toEnerji owned by TÜPRAS Kırıkkale (5Mt)andBatman(1.1 are Mt)are inland.Allfourrefineries located coast andboth have anannualcapacityof11 Mt.Thetwo other refineries, year (567 of kb/d).Therefineries There are inTurkey, fourrefineries capacityof28.1 refining withatotal Mtper remove the ban on white flag stations; increase thecompetitionremove stations; intherefining flag thebanonwhite supply totheirown network retail (now to15% limited supply); oftotal agreements;the durationoflong-term stoplimitingdistributioncompanies’ To improve thesituation, theCompetition Authorityrecommended restricting oilproductsinternational market inTurkey. are weaklyreflected pricesare high by comparison international Ex-tax andpricedecreases inthe andthedistributioncompanies are avoiding pricecompetition.satisfactory competition existintheliquid fuelsector. Thelevel ofcompetition isnot The Competition to Authorityconcludedthatseriousstructuralbarriers (Petrollargest distributors ShellTurcas, Ofisi, BP, Opet andTotal). ontheactivitiesofTÜPRAS Report Inquiry and aPreliminary inquiries by theCompetition Authorityin2008: theLiquid Fuel Sector Report competition indistributionhasbeenaconcern,andwas thefocusoftwo largestfive companies about90%ofthemarket. dominated Thelevel of hadincreased to51,By April2009,thenumberofdistributors butthe , ., ajointventure ofKoç HoldingandShell.Koç Holdingisoneof , , aformergovernment monopolywhichwas fullyprivatised , isthelargest storageowner, with29.9millionbarrels ˙ Izmit and ˙ Içel, ˙ Izmir are located on the western Izmir are onthewestern located ˙ Izmir and ˙ Izmit accountfor , and the five andthefive ˙ Izmit,

18% VAT. In additiontoexcise alloilproducts taxes, non-commercial users. are levied fuel. Theexcise are taxes thesameforcommercialand more energy-efficient TRL 1.8915 perlitre, asthegovernment to promote intends theuseof fordiesel,TRL1.3045excise tax per litre, ismarkedly lower thanforgasoline, budget revenue, inthelevel prices.AsofMay ofretail whichisreflected 2010, Turkey onoilproducts hasalongtraditionofratherhightaxes togenerate competition.limited in Turkey are abouttwiceashightheEUaverage, theimpact reflecting of prices. AccordingtoPFCEnergy,import aconsultancy, distributionmargins pricesandtheCIF betweenmargins, theex-tax asmeasured by thedifference prices,butalsoindistribution the pricecaps,whichledtoanincrease inex-tax close totheIEAaverage. Inthebeginningof2005,government removed Turkey’s priceshave retail increased relatively since2005,whenthey fast were 4). (seeChapter country explainsthelow level inthe ofcar ownership andthisalso partly country products aremore far expensive inTurkey thaninany other IEAmember countries (seeFigures 13 to15). Incomparison todisposableincome, oil households andthesecond-highestdieselpricesamongIEAmember of 2009,Turkey hadthehighestgasoline pricesandlightfueloilfor Gasoline, dieselandheatingoilare expensive inTurkey. quarter Inthe fourth has inspectionandsanctionpowers. EMRAisresponsible formonitoringthemarker and stations. to filling system determine theoriginoffuelandprevent fuelfrom untaxed beingdistributed 2007in January ofanationalmarker Achemicalmarker system. isusedto The problem offuelsmuggling hasbeenlargely solved withtheintroduction Opet istheleadingfueloildistributor,stations. and40%owned by TÜPRAS isthatofShellTurcas,network stations offilling comprising around 1200 Stockshares Exchange. are inIstanbul free Thesecondmostextensive float Do˘ government monopolythatwas privatised in2000andisnow owned by the endof2008,3140 outofroughly 14 stations 400. Petrol isaformer Ofisi 16%, BP13% andTotal at 5%.Petrol stations alsohadthemostfilling Ofisi hadroughly athirdoftheoilproductsOfisi market, ShellTurcas Opet afifth, are In2008,PetrolThe largest alsothemostprominent distributors retailers. companies. excess workload forEMRAandcreating for anundesirablebusinessclimate companies. Additionally, there are somesymptoms ofoverregulation, causing sector; andabandonthelimitonmarket share (now at45%)fordistribution gan Holding(54.17%), OMVofAustria(41.58%), while4.25% ofthe 57 , .

18% United States 13% Mexico 32.6% Canada 42.3% New Zealand 36.8% Australia 54.5% Korea 48.5% Japan 56.9% Poland 54.4% Switzerland 54.7% Greece Ex-tax price 55% Spain 56.5% Luxembourg Tax component 58% Czech Republic (tax as a percentage 61.1% Austria of total price) 57.8% Hungary 60.6% Ireland 59.6% Slovak Republic 65.6% United Kingdom 64.3% Sweden 64.9% France 61% Italy 62.2% Portugal 65.6% Finland 62.3% Denmark 62.5% Belgium 67.2% Netherlands 63.4% Norway 60% Turkey 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.12.0 2.42.32.2 USD/litre

Note: data not available for Germany and Iceland. Source: Energy Prices and Taxes, IEA/OECD Paris, 2010.

13% Mexico 19% United States 11.5% New Zealand 35.4% Japan 45.4% Korea 47.4% Luxembourg 48.7% Poland 34.9% Australia 49.2% Spain Ex-tax price 47.1% Greece 55.1% Austria Tax component 53.8% Finland 53.2% Czech Republic (tax as a percentage 56.6% Netherlands of total price) 53.2% Hungary 57.6% France 51.6% Portugal 52.3% Belgiu 55.7% Ireland 53.8% Switzerland 54.8% Denmark 54.7% Italy 58.5% Slovak Republic 56.9% Sweden 65% United Kingdom 49% Turkey 57.4% Norway 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.12.0 2.42.32.2 USD/litre

59 Note: data not available for Canada, Germany and Iceland. Source: Energy Prices and Taxes, IEA/OECD Paris, 2010.

4.7% United States 12% Switzerland 7.7% Japan 27.5% United Kingdom 7.7% Canada 20.8% Belgium 12.6% Luxembourg 19.7% Greece Ex-tax price 19.3% Korea 28.4% Spain Tax component 29.9% Czech Republic (tax as a percentage 25.6% France of total price) 27.1% Poland 31.7% Finland 33.3% Austria 18.7% Ireland 52.1% Netherlands 35.4% Portugal 39.8% Norway 49.9% Denmark 55.5% Sweden 54.1% Italy 47% Turkey 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 USD/1 000 litres

Note: data not available for Australia, Germany, Hungary, Iceland, Mexico, New Zealand and the Slovak Republic. Source: Energy Prices and Taxes, IEA/OECD Paris, 2010.

20 timesthe average daily quantity must of products supplied.Thesestocks andfueldistribution licenseesare obligedtokeep aminimumof Refinery There categories. isnoregulation requiring tobeheldinspecific oilstocks been presented to the Ministry ofEnergy andNatural Resources(seeBoxbeen presented totheMinistry 2). law has one;adraft butithasplanstoestablish agency tocontrol oilstocks, the Petroleum Market Law (seeTable 5).Turkey doesnot have astockholding Atindustry. present, thelegal by basisforoilsecuritymeasures isestablished of theprevious year) by placingaminimumstockholdingobligation on Turkey meets itsIEAstockholdingrequirement (equalling 90days net imports Box met through salesofoilproducts. alevy onretail would be agency. stocks Thepayments oftheagencyforcomplementary the companies, butstorageandoperationalcostwould bemet by the would bemet by stocks Thesupplycostofcomplementary in by-laws. andwould beset stocks would dependontheamountofobligatory stocks Theexactamountofcomplementary totheirimports. proportion marinebunkers in andimporting fueldistributors importing refineries, from nationaloilstockobligation thetotal andwould beshared among would stocks beset by deducingobligatory stocks year. Complementary per year would hold15 timesdailyaverage consumption oftheprevious average salesoftheprevious year. Companies consumingatleast20kt 10would alsohold20times,andLPGdistributors timestheirdaily amount ofthecrudeoilprocessed in theprevious year. Fuel distributors would Therefineries hold20timesthe dailyaverageeligible consumers. fueldistributioncompanies,refineries, LPGdistributioncompanies and would beheldby stocks Obligatory stocks. complementary established andnewly stocks industry would consistofexistingobligatory The stocks currently heldby EMRA(asdescribedabove). regarding Itwould assumetherelevant responsibilities nationaloilstocks. entity, rights autonomy with financial andadministrative andregulatory Natural Resources.Accordingtothe ofEnergy and isunderdiscussionintheMinistry agency. Thedraft Turkey astockholding law aimingtoestablish hasprepared adraft Draft LawontheStockholding Agency

draft, theagencywould bealegal draft, 2 61

© IEA/OECD, 2010 DAYS’ COVER 62 December 2009 helpedTurkey return tocompliance (seeFigure 16). crude oil.Thechangeinbase year foraverage thatoccurred in dailynet imports attheendofOctober2009, ofwhichsome60%was intheformof imports) oilstocklevelstotal stoodat56.5millionbarrels (equivalent to88days ofnet with two dipsbelow thislevel, inDecember2007 andOctober2009.Turkey’s then, Turkey hasbeenmarginally compliant withtheIEA90-day obligation, remained below 2005toMarch2007. the90-day level from January Since Turkey’s record ofmeeting itsstockholdingobligation hasbeenmixed. Itsstocks Source: as amendedin1980. Law No. 79 of1960, The National Protection Law (2003/5015) Petroleum Market Law (2003/5015) Petroleum Market Legislation Table importer, ifthecompany tomeet itsstockholdingobligation. fails licenceofanoilproductPenalties andcancellingtheimport may includefines to provide ordocumentsrelated totheirstockholdingobligations. any data regularly scheduledon-the-spot inspections.Itcanalsoorderthecompanies Thusempowered, oilstocks. EMRA controls EMRAcanconduct obligatory domestically. Thus,Turkey agreements hasno bilateral withother countries. mustbeheld obligation Emergency oilreserves of90days ofnet oilimports. neededtoreach thenational ofstocks theremaining retain portion refineries 15 days’ supplyofeachtypeliquid fuelintheirconsumption inventory. Turkish that use20kilotonnes (kt)ormore onanannualbasisare obligedtokeep as awholeorseparately, ofthelicensee.Consumers accordingtothestatus be heldattheirown butmay storageorlicensedfacilities, bestored Oil Supply Security:Emergency ResponseofIEACountries2007 Legal BasisforMeasuresin Legal OilSecurity Turkey in emergency situations. The law enablesthegovernment toimplement avariety ofmeasures measures ofemergency Implementation areLarge obligedtokeep consumers • 15 days oftheirconsumption. • are obligedtokeep anddistributors Refineries atleast20timesthe following manner: inthe The law stockholdingobligations stipulates foroilindustry Stockholding has theleadingrole. ofEnergy andNatural Resources(MENR) NESO), inwhichtheMinistry National OilStock Commission(NOSC,thatfunctionsastheTurkish The law provides thegovernment ofTurkey toset withpowers upthe organisations response Emergency average dailyamountofproducts supplied 5 Powers , IEA/OECDParis,2007.

110 100 105 70 dec-99 75 80 85 90 95 march-00 Stock levelindaysofnetimports Directorate ofPetroleum Affairs. andtheUnder-Secretaries oftheTreasuryas wellEMRA, andtheGeneral ofFinance andofForeign Affairs Affairs, Ministries ofDefence,Interior MENR anditcomprises representatives ofseveral other bodies,includingthe of on behalfofMENR.Thiscommissionischaired by theUnder-Secretary toEMRAbycommunicated theGeneral Directorate ofPetroleum Affairs Stock release decisions are taken by theNational OilStock Commissionand collective 2005. actioninSeptember be released intwo days, aswas thecasewhen Turkey intheIEA participated 24 would Thus,stocks willbeneededfortherelease ofphysical stocks. hours the decision-makingprocedure onstockdrawdown willtake 24 another hours; the regulations andprocedures however, are established, that itisexpected decisionhasbeen taken asyet.privatisation butnofirm oftherefineries, Once toconductastudyonstockdrawdownthe had intended procedures after To Turkey date, doesnot have stockdrawdown detailed regulations. It Source: IEA. integrate energy efficiency objectives into transport policy, objectives into transport alsoforoilsecurity integrate energy efficiency economicgrowth. and reflecting decade, ledby Itiscriticalto transport Turkey’s inthecoming toincrease oildemandisexpected significantly june-00

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© IEA/OECD, 2010 64 regulation inthe downstream sector, with theaimofensuringcompetition companies. TheIEAencourages thegovernment tomove tolight-handed excess workload forEMRAandcreating for anundesirablebusinessclimate companies. Additionally, there are somesymptoms ofoverregulation, causing sector; andabandonthelimit onmarket share (now at45%)fordistribution increase competitionremove stations; intherefining flag theban on white supply totheirown network retail (now at15% limited supply); oftotal agreements;the durationoflong-term stop limitingdistributioncompanies’ agreements.term TheCompetition Authorityrecommended in2008torestrict exist,suchasgeographic restrictions andlong- toentry and several barriers The distributionofoilproducts by distributioncompanies isdominated five oilproductsinternational market. follow downwardand they donot sufficiently price movements inthe competition; pricesare highby comparison international there isinsufficient themarket.enter However, theCompetition Authorityconcludedin 2008that oilsectorhasseen price capsremovedThe retail in2005andnew companies framework forexplorationandproduction activities. development, andthegovernment shouldnow ensure anattractive legal inTurkeydomestic, operatinginthisfield have increased. Thisisawelcome number ofpermitsgranted andthenumberofcompanies, both foreign and domestic oilexplorationandproduction activities.Inrecent the years, Turkey encouragesapolicyofstrengthening oilsupplysecurityby increasing environment. tothemarine ofthesedevelopments inthereductionsignificance ofrisks developing Ceyhan asamajor oiloutletintheregion terminal aswellthe Straits enhancesoilsupplysecurity globally. The IEAnotes theprospects for pressure intheTurkishwith itsneighbouringcountries.Easingthetransport routes ofcrudeoilinco-operationgovernment transport fordiversifying ofCeyhan. TheIEAwishestocommendthe port to theMediterranean Straits, ofSamsun suchasthepipeline project from theBlackSeaport new pipelinesbypassing theTurkish couldalsosupport This perspective routes tothemarkets.possible asCaspianoilproduction rises andseeks and itscapacityisbeingincreased to1.2 increases mbd,withfurther Kazakhoiltoworld markets,2008, theBTC pipelinehasalsotransported commissioned in2006andsupplyingoilfrom Azerbaijan. SinceNovember Iraq,andtheBaku-Tbilisi-Ceyhansupplying oilfrom (BTC) northern pipeline, Turkey pipelinesforcrudeoil:theKirkuk-Ceyhan hastwo import pipeline, andurbandevelopment policies. in transport sectorandby incorporating theenergy dimension especially inthetransport useofoilby strengthening demand-sidepolicies, should increase theefficient requirementstechnical forvehicles. Thegovernment orfuelspecifications modalchangesaway fostering and frompublic transport, road transport, reasons. Turkey’s sectorincludepromoting policiesinthetransport efficiency

The government ofTurkey should: are clearandprecise. ensure thatthestockholdingarrangements, includingdrawdown procedures, the improvement oftheinstitutionalcapacitywithoutdelay. Itshouldalso 2010. The government thelegal shouldhelpaccelerate process concerning intheStrategicthe strategies April InstitutionalPlanoftheMENRdated and thecreation ofthenationalstockholdingagencywas includedamong thestockholdingagencyisunderdiscussionwithinMENR establishing law on The draft astockholdingagencyswiftly. possibly by establishing thenecessitytoimprove clearlyindicate imports theinstitutionalcapacity, The marginal compliance ofTurkey increase andtheexpected initsnet oil coming decade. inthe increasestorage capacitiestodealwiththeexpected innet imports comprehensive and plantoincrease long-term emergency oilreserves capacity accordingly. TheIEAencouragesthegovernment todevelop a willneedtoexpandoilstorage will alsorisesharplyandthatthecountry the level ofTurkey’s minimumstockholdingobligation towards theIEA growth55.6 Mtin2020.Suchasignificant implies innet that oilimports are forecast toincreaseimports by some90%,from 29.5Mtin2007 to Security ofoilsupplywillbecomemore crucialforTurkey, asitsnet oil has beenonlymarginal, includingtwo dipsbelow the90-day level. improvement,is room compliance forfurther sinceApril2007 asthecountry’s Commendably,addressed by theIEA. butthere hasbeenrectified, thismatter complying withits90-day stockholdingobligation, continuously amatter From the lastIEAin-depthreview in2005toMarch2007, Turkey was not way.encourages ittocontinuemonitoringfuelquality inaneffective in reducing fuelsmuggling. TheIEAcongratulates Turkey forthissuccessand 2007Introducing thenationalmarker inJanuary hasproved system effective andstoragecapacity. transportation investment tocover increasedand sufficient future needsforrefining, ◗ ◗ Increase the efficient useofoilby strengtheningIncrease demandpolicies,especially theefficient Move to light-handedregulation inthedownstream sector, withtheaimof needs for refining, transportation andstorageneeds forrefining, transportation capacity. investment toensuring competition cover and sufficient increased future andurbandevelopment policies. transport sector andbyin thetransport incorporating theenergy dimension in 65

© IEA/OECD, 2010 66 ◗ developing acomprehensive long-termplanto increase Turkey’s emergency • • establishing clearandprecise oilstockholding arrangements, including • accelerating thelegalprocess to improve theinstitutional capacity, Intensify efforts to consistently maintainemergency stocksIntensify efforts wellabove the capability by level strengthen of90days’ emergency andfurther netimports response net imports inthecomingdecade. net imports andstorageoil reserves increase capacitiesto dealwiththeexpected in drawdown procedures; preferably by creating thestockholding agency;

consumption is expected to remain fairly constant, and, involume power terms, consumption toremain constant, isexpected fairly toreachmedium andlongterm 61 bcm by 2020.Thesectoralbreakdown of over tocontinueincreaseinallsectors Gas useisexpected the fast highest andlowest dailypeakdemand. between the ofthedifference consumption forthree-fourths accounted growing seasonalityofnaturalgas demand.In2007, forexample, household than summerdemand.Theresidential sectoristhemaincontributorto isatitshighest.Winter dailydemandistypically30%to50%higher sectors whengas inwinter useintheresidential andpowerGas demandpeaks 2000 to2008. of demand,mostlyforheating.Industrialdemandhasmultiplied by fourfrom and commercialsector, over thesameperiod,gas rose from zero toone-third increase atenfold (seeFigure terms 17).2008, inabsolute Intheresidential sector, risingfrom barely one-sixthofgenerationin 1990 tomore thanhalfin 10% inthepower 2%. Gashasbeenespeciallyimportant andother sectors 11%, demand.Households consumed22%ofallgas,total industry services Power generationwas thelargest gas userin2008,accountingfor55%of oil company, itsgas hasinrecent explorationefforts. intensified years recoverable were naturalgas closeto6bcm.TPAO, reserves thestate-owned production issmall,around 1bcmperyear, andasofspring2009,remaining (seesectionbelow onInfrastructure).its gas Domesticgas suppliesfurther rapidly toreach 4.6bcmin2008.Turkey hasseveral plansfor diversifying in2007 from andhave Azerbaijanand Nigeria(3%).Imports increased started came from Russia, followed by Azerbaijan (15%), Algeria(14%), Iran(16%) Turkey more than98%ofitsgas imports needs.In2009,52%ofgas imports theregulator.according toEMRA, has, however, reduced demandto35bcmin 2009from 37 bcmin2008, growingone ofthefastest gas markets inEurope. Theeconomicdownturn From 2000to2009,naturalgas supplyincreased by 127%, makingTurkey fuelinvolume terms. oilandbecomethemostimportant it hasovertaken rising from hardly6%ofTPESin1990 to31% in2008.With thatshare, Natural gas ofTurkey’s hasmet amajor part rapidlygrowing energy needs, NATURAL GAS 67 6 © IEA/OECD, 2010 SUPPLY CONTRACTS Figure 20 25 30 35 10 15 9018 9019 002005 2000 1995 1990 1985 1980 68 0 5 Source: ** negligible. consumption.forestry, andother final fishing agriculture/ includesnon-energy use.Commercialincludescommercial,public services, Industry * TPESby consumingsector. Otherincludesother transformationandenergy sectorconsumption. agreed and the necessary pipelines have agreed beenconstructed. and thenecessary these deliveries couldpotentially begininafew oncetransit regimes years, are has a30-year contractwithTurkmenistan forannual deliveries of16 bcm,and supply sources.Inadditionto theactive contractsshown inFigure 18, Turkey Turkey salesandpurchasecontracts withsixdifferent has signedeightlong-term lead times. favoured by becauseofitsshort private-sectorpoweris particularly generators in any increases ofthealternatives willexacerbate ingas-fired capacity, which power from generationtoincrease terms 2008to2020.Delays inabsolute hydro, windandtheintroduction ofnuclearinthemix,itstillexpectsgas-fired government forecasts theshare ofgas-fired power todecline,withmore coal, an unprecedented challengeamongOECDmembercountries.Whilethe will require generatingcapacitywhichrepresents atleastdoublinginstalled projections, This more thandoublefrom 2008to2020over 400TWh. more than50%from 2000to2008andwill,accordingconservative electricitydemandsoared increasing populationandrisinglivingstandards, Drivengeneration willdominate. growth by thefast oftheTurkish economy, Mtoe Energy BalancesofOECDCountries, Natural GasSupplyby Sector*, 1980to2008 IEA/OECD Paris,2009. 17 17

Residential Commercial Industry generation Power Other Transport**

60 70 10 10 20 30 40 50 0 9019 9419 9820 0220 0620 0021 0421 0822 022024 2022 2020 2018 2016 2014 2012 2010 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 bcm Source: (seeunder Infrastructure). country andthegovernment Iraqasahighlypotential supply stage alsoconsiders gasimporting from advanced Egyptthrough theArabpipelineare atavery eventually toleadLNG expected orpipelinegasPlanstostart imports. 2009, Turkey thatis withQatar signedaMemorandumofUnderstanding The nextcontracttoexpire willbetheAlgerianLNG onein2014. InOctober per year Balkan alongthewestern route through Bulgaria. agreement thecontractthatcurrently inprincipletoextend supplies6 bcm it signedanintergovernmentalprotocol ongas withRussia whichincludes additionalgaspursuing suppliesfrom several countries.InAugust2009, To bridgethegap between supplyandprojected demand,Turkey isactively requirements ofthe2003EUGasDirective (2003/55/EC). to harmonisetheTurkish legislationwithEU law. Thelaw meets withthe a competitive gas market, reduce therole inthesectorand oftheState Law (no.4646) of2May 2001. Theobjective ofthelaw was toestablish Turkey’s ongoingnaturalmarket reform isbasedontheNatural GasMarket Long-Term Gas SupplyContractsversusDemand, 1990to2025 Natural GasMarket Review, IEA/OECDParis,2009. 18 18

Demand (forecast) Demand Nigeria (LNG) Azerbaijan Russia (West) Iran Russia (West2) Russia (BlueStream) Algeria (LNG) 69

© IEA/OECD, 2010 MONOPOLY BREAKUP THE REGULATOR 70 owned BOTAS Crucially, market reform included breaking upthemonopolyofgovernment- competition isachieved, storagetariffs. and,untilsufficient tariffs retail be opentonew entrants.Italsoregulates andapproves transmission andall a liberalandcompetitive naturalgas market where allmarket segmentswill of measuresto set toensure up and implement theestablishment regulatory electricity, naturalgas, petroleum andLPGmarkets is 2).Itstask (seeChapter The key institution inmarket theindependent regulator for reform is EMRA, countries includingthosewithwhichBOTAS to make new LNG contractsandprivatecompanies tohave contractswith ofLNG toallow imports BOTASlong-term equipment). Thelaw was amendedinJuly2008,liberalisingboth spot and (infrastructures andfacilities operation, distributionandconsumerservices transmissionnetwork market installations, internal certificates, licences, tariffs, legislationon Market promoted by reform secondary hasbeenfurther Full ofthe2001 implementation law would leave BOTAS other two companies of3.00 bcm sinceApril2009. atotal 0.25 bcmsince2007, 2009andthe BosphorusGaz0.75bcmsinceJanuary EMRA granted licences. Shellhasbeenimporting thesecompanies import Gaz 0.75bcm,Avrasya Gaz0.5bcm andShellEnerji0.25bcm.Subsequently, wastotal divided by company asfollows: EnercoEnerji2.5bcm, Bosphorus of4bcmperyeartotal for15 (12% years volume). The4bcm imports oftotal concluded itayear later. gave Thetender a fourcompanies therighttoimport BOTAS thanBOTAS have todealwithothersuppliers counterparties beenreluctant ofthecontractreleaseThe implementation programme hasbeenslow, as contracts in2008. account forlessthan20%ofdemand,butthishasbeen changedforLNG contracts. Also,BOTAS liabilities ofBOTAS allcross-borderIn thecaseofavolume transfer, hastoundertake theimporter or volume transfertoprivatecompanies. Thelaw prioritisescontracttransfer. two ways tothe20%level: forreducing itsshare contracttransfer ofimports wholesaler inthedomesticmarket to20%by 2009.Thelaw leaves BOTAS In practice,the2001 law or tolimittheshare intended ofany importer ofthegassectors market. on pipelinetransmission,andallow private companies inallother tooperate , held the first tender forcontractrelease tender on30November 2005and heldthefirst , on imports, distribution,storageandthesaleofnaturalgas. onimports, , andthegas pricecannot be lower thanintheexisting , was not allowed tosignnew contracts untilitsimports , , thePetroleum PipelineCorporation, , already hascontracts. , withthemonopoly , , .

Source: Energy Authority. Market Regulatory Total Export Storage Compressed naturalgas Distribution Transmission Wholesale of which spot LNG 23 Import Type oflicence Table with distributionactivity. wholesale ofnaturalgas. Additionally, distributioncompanies may onlydeal market activities.Transmission companies and shallnot dealwithimport allmarket Furthermore, have actors accounts fordifferent toholdseparate and reliable. They alsohave anobligation tothenetworks. toconnectallusers effective companies thattheiroperationsare todemonstrate cost-efficient, oftherequirements,As part EMRAobligesthetransmissionanddistribution activities (seeTable 6). by May 2010, EMRAhadgranted 198 naturalgas market licencesfordifferent A licensingprocess inNovember inthenaturalgas market2002and started cases where inmore anactivityisconducted thanonefacility, foreachfacility. market activity. licencesare Separate required foreachmarket activityand,in The 2001 law requires allgas markettoholdalicenceforany participants and toprovide securityofsupply. theroles forBOTASto define law toreschedule the marketstudying optionsforadraft development steps, 2001 BOTAS law tookeffect, of BOTAS activities withintwo from years 2009.Then,thestorageandtradebusinesses The law alsoobligesBOTAS Number ofCompaniesintheNaturalGasMarket by Activity, , will have to be privatised. By the time of writing, seven years after the willhave tobe privatised. Bythetimeofwriting,seven after years , , , tounbundleitstransmission,storageandtrade , to facilitate new entry intothewholesalemarket new entry , tofacilitate remains thedominantplayer. Thegovernment is May 2010 6 Number oflicence-holders 1 forpipeline 16 forLNG 198 34 58 60 11 2 4 71

© IEA/OECD, 2010 REFORM ANDEXPANSION INGASDISTRIBUTION NETWORK ACCESSANDOPERATION 72 charges. It also manages capacity transfers throughcharges. thisbulletin It alsomanagescapacitytransfers board. information,forexample dailyimbalances andscheduling company-specific andavailable and rates capacities,flow information, includingonreserved (pro rata). BOTAS demand forcapacityexceeds supply, proportionally capacityisallocated Capacity transferisallowed onamonthlybasis.When between shippers points. Itdoesthisforamaximumofoneyear andaminimumofone month. as BOTAS sources, noneofwhichshouldprovide more Aslong thanhalfofthetotal. natural gas Thecompanies toconsumers. mustpurchasegas from atleast two anddepreciation charge forsupplyingonekilowatt-hour of the unitservice onthe basis of experience ofthepotential licensees.Itevaluatesthetenders In decidingtheresult ofatender, strength and thefinancial EMRAconsiders for distributionlicencesincitieswhichdidnot have any distributionnetwork. distribution network Forthispurpose, EMRA hasorganised extended. tenders ofthemarketAs part reform, gas distributionistobeprivatised andthe BOTAS code. have andshippers therighttodemandEMRAamendnetwork parties amended thenetwork coderecently progress toreflect inmarket reform. Third provisions onnetwork operation,capacityallocationandbalancing.EMRA thenetwork codealsocontains In additiontorulesonTPA andrelated tariffs, also consideringthecodeofoperationsforstoragefacilities. two Itis LNG facilities. by ofthecountry’s access rulessubmitted theowners these provisions stillneedtobeimplemented. EMRAisnow evaluating the The law alsoregulates TPA toLNGandunderground terminals storage,but to EMRA’s approval. EMRAregularly reviews TPA tariffs. andsubject system are basedonanentry-exit andbinding.TPAis final tariffs of rejection cancomplain ofTPA, toEMRAwhosedecision therejected party the network Inthecase 2004. code,whichentered intoforceon1September are set in regulated Rules andnon-discriminatory. forTPA andrelated tariffs access(TPA)Third-party tothetransmissionanddistributionnetwork is owned distributors in Turkey’sowned distributors andAnkara’s largest cities,and onlyIstanbul’s were privatisations Sixoftheselicence-holders ofmunicipality- 60 citiesintotal. April 2009,EMRAhadorganised for57 tenders citiesandgranted licencesfor Licences are granted foraminimumof10 By andamaximumof 30 years. difficult. obligation willbe very , as the TSO is responsible for allocating capacity for entry andexit isresponsible forallocatingcapacityentry as theTSO , remains thedominantwholesaler, however, complying withthis , operates anelectronic operates bulletin board toprovide market

The rates remainThe rates low asBOTAS and in2009were 11.4% supply of35bcm). total (4bcmoutofanestimated are Switchingrates impliedall customers. by thecontractrelease programme eligibility threshold annually, withtheaimofgradually openingthemarket for account foraround gas 80%oftotal consumption. EMRAdeterminesthe eligiblecustomers Intotal, ofthelicenceterm. years five thefirst areas after the eligibilitythreshold from 15 mcmto0.8inthesenew distribution 2010 InJanuary ofthelicenceterm. years EMRABoarddecidedtodecrease distribution areas, thiseligibilitythreshold hasbeenat15 five mcminthefirst annual consumption ofmore thanonemillioncubicmetres. Inthenew their supplier. inthepre-2001 Soare customers distributionareas withan andlocalnaturalgas powerGas-fired generators are producers free tochoose the incomefrom services. associated regional following monopolyconcessionofupto22years purchaseaswell investor andtheowner, typicallyaconstructioncompany, are bankingonthe USD 180) The ofthelicenceterm. years five remains thesameinfirst gas price.Ontheotherto thecity-gate hand,theconnectionfee(currently inaddition anddepreciation charge whichisdeterminedinthetenders service aunit canonlycharge oftheconcession,owners eightyears customers first thatforthe The competitionhasbeenstrong thefact despite forthesetenders tothegridhundreds ineachofthepastfew ofthousandscustomers years,. invested ingrid hundreds constructionandconnected ofmillionsUSdollars The companies thatwere grantedhave adistributionlicenceintender for12tenders more cities. from years within five receiving thelicence.EMRAisplanningtoorganise new distributionareas, andincludeanobligation tobuildagas network remain concerned tobeprivatised.distribution systems Theother 53tenders BOTAS are beingplanned.Transmissionstations grid isowned by andoperated than 200pressure-reducing Four more compressor andmeteringstations. of high-pressure grid, seven andmore compressor (200MWintotal) stations 2010,As ofFebruary Turkey’s gas includes11 transmissionsystem 294km However, are free eligible customers tochoosetheirsupplier. , , the TSO. , theTSO. , hasnoobligation totransfercustomers. 73

© IEA/OECD, 2010 INTERNATIONAL PIPELINECONNECTIONS 4. Gas export viatheTurkey-Greece Gasexport isprovided Interconnector by Turkey from itsgas balanceandsois 4. 74 capacity andcommissioning timelineforthepipeline.TPAO, BOTAS the pipeline.Theworking themaximum group define willinduecourse waysjoint working group offinding andmeansforconstructing withthetask resources. Turkey andIraqsignedaMoUon15 October2009 onsetting upa The Turkey-Iraq pipeline would give Turkey accesstoIraq’s considerablegas constructing a230-kmpipeline. oftheirgas20 August2009concerningtheinterconnection by networks and Turkey (MoU)on andSyriasignedaMemorandumofUnderstanding to LebanonandSyriatherest toTurkey. Thepipelinenow reaches Syria, period willbe10 bcm,around toJordan,some one-thirdofwhichisallocated from EgypttoTurkey viaJordanandSyria.Pipelinecapacityintheplateau oftheArabgasThe extension pipeline toTurkey would allow forgas delivery improve thesecurityofgas supplyforboth Turkey andtheEU. also potential connectionswithIraqandEgypt.Realisingtheseprojects will ThisincludestheNabucco diversified. pipelineproject (see Box 3)and further Turkey’s pipelineconnectionsandallow international gas sourcestobe There arethatwould increase anumberofprojects intheplanningstage hub inthecountry. andisalso studyingoptionsfordeveloping acompetitivecountry gas trading onTurkey’sgovernment placesstrong politicalimportance role asatransit not assuch a transitflow. market area. Althoughnogas operation, transitprojects have yet started gas-rich route from region thisvery andtheworld’s largestthe shortest gas betweenLocated Europe andtheMiddle East/Caspianregion, Turkey offers pipelineshaveallow 48.8bcm.Allimport excess capacity. 31.6 totalled imports pipelineswould bcmin2008,whiletheexistingimport signed inJune2010 by BOTAS (IGI)andtohaveInterconnector acapacityof11.6 bcmperyear. AMoUwas by 2014 toItaly The pipelineisplannedtobeextended withtheItaly-Greece the integration oftheTurkish naturalgas market market. withtheEUinternal Turkey-Greece was Interconnector commissionedin2007, for step asafirst purposes,withGreece. The has adirect connectionwithIran,andforexport capacity of8.8.bcm,butcanbeincreased toup20bcm.Turkey also pipelinethatwas launchedin2007.Erzurum Thepipelinecurrently hasa from AzerbaijanSea. Imports comethrough Georgia viatheBaku-Tbilisi- Bulgaria andviatheRussia-Turkey BlueStream pipelinethatcrosses theBlack viatheRussia-TurkeyGas from Russia isimported West Gaspipelinethrough Turkey’s gas grid toseveral isconnected neighbouringcountries(seeFigure 19). production, transportation andmarketing inIraq. production, transportation signed aMoUinNovember 2008concerningco-operation ingas exploration, , , DEPA Pipelinegas andEDISONtothateffect. , andShell 4 the

Map of the Natural Gas System Existing pipeline Under construction pipeline Under tendering/planned pipeline BULGARIA LNG import terminal RUSSIA Compressor station Existing underground storage Planned underground storage 14 BCM Black Sea

Kofçaz GEORGIA 8.8 BCM Kirklareli 16 BCM GREECE Edirne Kastamonu Zonguldak Bartin Komotini Çorlu Ipsala Istanbul Eregli Çaycuma Samsun Karabük Ordu Trabzon Rize Ardahan 5.2 BCM Giresun Artvin (LNG) M. Ereglisi Çorum Izmit Çankiri Bolu ARMENIA Çanakkale Karacabey Bursa Amasya Kars Bilecik Gümüshane Ankara Tokat Bayburt Çan Igdir Yozgat Balikesir Kirikkale Sivas Erzurum Eskisehir Erzincan Dogubayazit Kütahya TURKEY 6 BCM Aliaga 10 BCM (LNG) Afyon Kirsehir Manisa IRAN Kayseri Elazig Izmir Usak Nevsehir Van Denizli Aksaray Malatya Batman Siirt Nigde Adiyaman Aydin Konya Diyarbakir Burdur Isparta Sirnak Kahramanmaras Eregli Mardin Seydisehir Adana Gaziantep Karaman Sanliurfa IRAQ Antalya Mersin Ceyhan Iskenderun SYRIA km Hatay 0 80 160 Mediterranean Sea

75 The boundaries and names shown and the designation used on maps included in this publication do not imply official endorsement or acceptance by the IEA. Source: Natural Gas Information, IEA/OECD Paris, 2009.

© IEA/OECD, 2010 credit export agencies and commercial banks. agenciesandcommercialbanks. credit export will likely come from theEuropean BankforReconstructionandDevelopment, Plan announcedinApril2009.TherestEUR 200millionfrom theEURecovery 25% oftheproject, aroundfinance EUR2billion,andtheEUisproviding TheEuropeanin theproject’s Investment financing. Bankhaspledgedto countries, theUnited andtheEuropean States Union. Thiswillalsobereflected The Nabucco project from hasreceived theNabucco strong politicalsupport respective Nabucco transit countries. is beingnegotiated between theNabucco Company International andthe Agreementbuilding andoperatingthepipeline.TheProject (PSA) Support for transitregime andprovides certainty regulatory legal andregulatory development thebasisforaconsistent ofNabucco. TheIGAalsoestablishes signed anIntergovernmentalAgreement (IGA)in July2009toassistinthe The Nabucco transitcountries(Austria,Hungary, Romania, Bulgaria andTurkey) demand inAzerbaijan itself aswellinGeorgia andTurkey. and possiblytheTrans-Adriatic pipeline,aswelltheprospect ofincreasing gas this Azerbaijani gas –Nabucco, SouthStream, theItaly-Turkey-Greece Interconnector 12 in2016. bcmstarting There iscompetition between several pipelinesforaccessto inAzerbaijansecond phaseoftheShahDenizfield whichshouldproduce around gas IraqorfromFirst forNabucco the tobe sourcedeitherfrom isexpected northern South Stream project thatisaimingtosupply someofthesamemarkets asNabucco. the 2020,whileRussia supports gas untilafter availablesubstantial forexport doesnot having anticipate Kazakhstan domestic gas demandandLNG exports, projects competition face fromto bemajor aspipelineexport high contributors Iran,EgyptorRussia.also besourcedfromIranandEgyptare unlikely Kazakhstan, The mostlikely supplysourcesare Azerbaijan, Turkmenistan andIraq,butgas could regimes. Itnow seemsthatthesehurdleshave beenovercome. nationalregulatory ofhaving different supply source,alongwiththedifficulty mainly becauseoftheabsenceanupstream player andaclearlyidentified The project hasbeenpostponedseveral timessinceitsconceptionin2004, supply 8bcm,increasing to31 bcmby 2020. in 2011, in2014. gas transported withfirst Nabucco would stage, At thefirst investment decisionoftheEUR7.9 billionproject in2010 construction andstart MOL, Transgaz andBulgargaz). expectstotake thefinal Theconsortium ofsixgasNabucco companies isaproject ofaconsortium (RWE, OMV, BOTAS Bulgaria, Romania andHungary. gas market. The3300-kmpipelinewould runfrom Turkey toAustriavia from regions theCaspianandMiddle Eastern suppliers toaccesstheEuropean AfricaandRussia, enablingnew Sea,North theNorth gas intoEurope, after supplycorridorfornatural The Nabucco pipelineproject aimstoopenthefourth Box 76 The NabuccoPipelineProject

3 , ,

Sources: Aliaga, Izmir amr rgii8.2 Marmara Ereglisi Table isownedEreglisi by BOTAS closetoIstanbul terminal Turkey hastwo LNG regasification (seeTable terminals 7).TheMarmara in2010. process, tobefinalised Bank onatendering expected 1 bcm,butwithpotential forupto5bcm.BOTAS Ankara. Thestoragewould consistof12 caverns, initiallyproviding around New underground are facilities plannedatTuz Gölü,150 kmsouth-eastof capacity to3.0bcmandwithdrawal capacityto50mcm per day. owned by andoperated TPAO. Also,studiesare underway toincrease storage capacity of14 mcmperday andawithdrawal capacityof17 mcmperday. Itis Thestoragewas taken intousein2007.Silivri, closetoIstanbul. Ithasaninjection Turkey has2.1 bcmofunderground storageattwo depletedgas atMarmara fields demand of61 bcm,MENRseesapotential transitvolume of55to95bcm. 30 to40bcmcomingfrom both theCaspianregion andIran.Assumingdomestic by 2020.Turkey couldhave apotential supplyofbetween 116 and156 bcm,with increases insupply,All inall,MENRexpectssignificant demandandtransitvolumes Russian gas toTurkey andtoother destinationsviaTurkey. of of new gas pipelineswhichwould enablethetransportation ultimately pipeline from Russia toTurkey across theBlackSeaandalsoconstruction foresees thepreparation offeasibilitystudiesforexpandingtheexisting The GasProtocol signedbetween Russia andTurkey on6August2009 emnlMaximumcapacity Terminal capacity, asonly1.1 bcmperyear by hasbeencontracted BOTAS and amaximumsend-outcapacityof16.4 mcm perday. Ithasample spare company, andinoperationsince2006.Ithasanannualcapacityof6.0bcm summer. TheAliaga closetoIzmirisowned terminal by EGEGAZ,aprivate seasonandat60%capacity in atfullcapacityinwinter works terminal of 8.2bcmandamaximumsend-outcapacity22.05 mcmperday. The with amaximumannualcapacity According toitslicence,itcanoperate Natural GasMarket Review2008 (bcm peryear) 6.0 LNG Terminalsin Turkey , IEA, andcompany, IEA, information. 8 0 2006 1994 280 000 255 000 Storage, (m 7 3 ) , isworking withtheWorld Start-up year , andinusesince1994. , . Egegaz Owner BOTAS , 77

© IEA/OECD, 2010 Figure PRICES ANDTARIFFS 200 400 600 800 9019 9419 9820 0220 062008 2006 2004 2002 2000 1998 1996 1994 1992 1990 78 0 also thelow level of tariffs. (see Figure 21). but costsfor imports, relatively Thisreflects low transportation are in themid-range,whereas those forhouseholdsare inthelower range comparison,By international Turkish gas pricesforindustrialconsumers contracts andthepriceofgas ismainlylinked tocrudeoil. from spot LNG, allgasoil prices.Apart toTurkey take-or-pay issuppliedunderlong-term are themovementsand non-residential declining,mostlyreflecting customers incrude by MENR,end-userpricesforboth residential Since thebeginningof2009,asreported Source: therefore more fullyallowed topassonconsumerprices. pricesare Changes inimport increases intheregulated end-usertariffs. prices, butalsotheliberalisingofwholesaleand,in2008,strong riseinimport asteep reflects of2008(seeFigure 20).Thispartly last quarter Natural gas pricesforTurkish increased sharplyfrom end-users 2002tothe price capmethod andalsoappliesapriceceilingtostoragetariffs. EMRA determinesboth thetransmission anddistributioncharges by usinga pay thewholesaleprice plusatransmissionchargecustomers set by EMRA. depreciation, by thelevel thedistributiontender. ofwhichisdefined Eligible and pay apricecomposed ofthewholesalepriceandacharge forunitservice and theseller. Non-eligible customers pricesremain regulated by Retail EMRA. 2008,wholesalepricesare freely set betweenstructure. thebuyer SinceJanuary ofthegas marketAs part reform, Turkey ismoving toafullycost-reflective tariff USD/toe(GCV) Natural Gas Prices for Industry andHouseholds, for 1990to2009 Natural GasPrices Industry Energy PricesandTaxes, IEA/OECDParis,2010. 20 20 Households Industry

0 0 0 0 0 0 1400 1200 1 000 800 600 400 200 0 400 1 200 1 1 000 800 600 400 200 0 Canada, Germany, Italy, Japan,Korea, Luxembourg, New andSweden. Zealand, Norway Note: Tax informationnot not available available fortheUnited Data States. forAustralia,Belgium, Zealand, Norway, SwedenandtheUnited Kingdom. for Australia,Austria,Belgium,Canada,Germany, Italy, Japan,Korea, Luxembourg, Netherlands, New Note: Tax informationnot available not forthePoland, available SpainandtheUnited Data States. Source: Energy PricesandTaxes, IEA/OECDParis, 2010. United States Gas Prices inIEAMemberCountries, 2009 Gas Prices Finland Poland Spain France Greece United States Finland Turkey Portugal Ireland Slovak Republic USD/toe (GCV) Czech Republic USD/toe (GCV) Households Turkey Industry Hungary Hungary Switzerland Hungary Hungary Denmark Slovak Republic United Kingdom Poland Czech Republic 21 21 France

Spain Portugal Switzerland Ireland Austria Greece Netherlands Italy component Tax component Tax 79

© IEA/OECD, 2010 SECURITY OFSUPPLY 80 in gas supply, MENR,BOTAS Incaseofextremepower conditions yieldinginmajor sectors. reductions tothelinkage between naturalgas and theactivities pertaining co-ordinates close monitoringofelectricity andnaturalgas TheMENRregularly systems. The interrelation between the electricityandnaturalgas requires sectors in 2008rangedfrom 70to140 mcm. around To 35mcmofline-pack. dailygas putthisinperspective, consumption barringmarket Turkey Forbalancingthesystem, entry. is ineffect canuse proven unrealistic, andtheslow progress inbuildingnew storagecapacity gas. Thecompaniesimported were given tocomply years five butthis has to provide andwholesalers storagefor10%obliges gas importers oftheir are economicandsafe.Inaddition,thelaw regulator thattheirservices The 2001 Natural GasMarket Law requires market players toprove tothe Blue Stream pipeline. spot from LNGstorage; andimporting increasing Russia imports viathe drawingdemand reduction customers; down atinterruptible itsunderground types ofmeasures: fuelswitchingfrom gas electricityplants; tooilindual-fired Turkey through Bulgaria. Turkey through four managedtoavoid gas shortage gas 2009,whichinterrupted suppliesfrom Russiagas to inJanuary dispute Similar measures provided theresponseofRussia-Ukraine tothefallout more Russian gasimporting and,increasingly, spot LNG. bya pricingdisagreement. innaturalgas Deficits supplyfrom Iranare offset Turkmenistan suppliesduring tomeet halted domesticdemandafter exports leading todrops ingas pipelines.In2008,Iranstopped pressure in itsexport which hascausedmany andoperationalproblems technical incoldwinters, domestic demandandisalsorapidlyexpandingitsnationalgas networks, demandleadstocutsingashigh peakwinter supply. growing Iranhasafast TurkeyIn recent winters, from Iran,where withimports hashaddifficulties throughwell asincreasing Russian BlueStream. imports Azerbaijan, as connectingtoEgyptwiththeArabpipeline,orIraqifields through pipelinefromincluding increasing theBaku-Tbilisi-Erzurum imports will have infrastructure: several toexpanditsimport optionsare envisaged, ofarapidlygrowingexpectations gas demand(61 bcm by 2020),Turkey owing toitsproximitygas exports toTurkey andvast gas resources. Facing great potential ofthepoliticalsituationinIraqwouldfor offer stabilisation Spotthe mediumterm. LNG hasaddedtosecurityofsupply. Furthermore, from Turkmenistanin mid-2007 andare tostart andEgyptin expected security policy. from Aspreviously Azerbaijan mentioned,gas began exports ofTurkey’s sourcesandroutes isthecornerstone import Diversifying gas and canswitch tooil. 2010,emergency actionplan.AsofJanuary 19% ofgas are interruptible users , andTEIAS , co-ordinate measures co-ordinate through an

move tomore market-oriented levels, with pricesrisingin2007, andincreasing for new gas supply tobesecured. Progress hasbeenmadeinallowing pricesto forthemarket package todevelop isnecessary Thisisalso important further. goals inthe2001 Natural Gas Market Law, gas anda revitalised reform totheunrealistic changes.Thiscanbeattributed been somerecent important progress remains slow incontrasttotheelectricitysector, althoughthere have Turkey’s in2001. gas sectorisintheprocess ofliberalisationstarted But from rangeofentities. adiverse to begiven tostimulatingtimelyinvestment, from supplysources,and diverse Greece 2007. asoflate Thus,lookingattheTurkish gas scene,priorityneeds gassignificant Gasfrom transitcountry. theTurkish grid already to flows sources forallcountriesconcerned.IndeedTurkey isalogical,potentially very to meet growing and Western demandinEastern Europe, supply anddiversify gas further from orCentralAsiansourcescouldbeextended MiddleEastern 2009).Pipelinesbringing impact ofgas oftheinterruption suppliesinJanuary (andindeedspot LNG supplieswereQatar the onemeansusedto alleviate increase inglobal from LNGinthenextfew outputisanticipated notably years, (Turkmenistan). LNG suppliesare alsopotentially available, asanear50% Russia, Iran,Iraq,Egypt,theCaspianregion (Azerbaijan) andCentralAsia Fortunately, Turkey iswellplacedwithrespect tomajor in gas reserves to beconcludedagain inthenextfew years. supply contractsbegintoexpire meaningthatnew incomingyears, onesneed quite soon,given theleadtimes inthesector. Inaddition,someexisting in 2009andslow growth in2010, thisnew supplyinfrastructure isstillneeded with itspotentially sharpvariations in demand.Even allowing foradecrease small forcurrent demand,let alonetomeet theincrease inthepower sector, amounts toonly2.1 bcmperyear atoneunderground storagefacility, too LNG capacity, terminal plusextracommercialstorage.Currentstorage total 2020 willrequire heavy investment very inadditionalpipelineand,possibly, gas2008 to2020.Meeting thisnear-doublingofdemandforimported togrowis expected strongly, andgastoincrease by two-thirds imports from from thesubsequent 2000to2009,anddespite downturn, energy demand continue growing. gaswere terms, multipliedby Inabsolute 2.5 imports Turkey’s gas demandhasgrown inthepastdecadeandisset to fast very organisations give theiropinion. process andpublic inwhichrepresentatives ofthegasconsultation industry and they intoforcewiththeapproval enter oftheEMRABoard,following a situations, includingsupplydisruptions.Theserulesare continuouslyrevised operation ofthenaturalgas anditsoperationinexceptional system The network codeoftheTurkish naturalgas regulates thenormal system 81

© IEA/OECD, 2010 82 The market dominanceofBOTAS theirremoval tosecurityofsupply; were detrimental isapositive step. capacityfrom 5.2bcmto8.2bcm.Theprevious provisionsannual delivery Marmara Eregli LNGhasbeenlicensedtoincrease terminal themaximum intoLNGAdditionally, terminals. toimport and allowing the thirdparties useofthesecondLNG(stillunderutilised), terminal LNG, effective importing The situationhasslightlyimproved withtheremoval ofrestrictions on around 89%ofthemarket. utility, continuestooccupy adominantpositioninthewholesalemarket, with by some80%in2008.BOTAS further afield. further (e.g route. Thisisespeciallytruewhere pipelinescross several national frontiers with thegreatest harmonisationalong thepipeline degree ofregulatory successful where gas regulations, laws transparent, andpoliciesare stable, Attracting pipelineinvestment circumstances. in current ismost financial inthenextfew years lead times.Suchinvestment willobviouslybedifficult andrequires pipelinesiscapital-intensive Building large long long-distance additionalpipelinecapacitywillbenecessary. Leaving aside LNG imports, envisagedpipeline operations,astep in2001, butyet tobeenacted. separation ofBOTAS transmissionnetwork. Thisimpliesto anindependentlyoperated thefulllegal and new access entrantswillneedtohave complete inthird-party confidence provide. Forany needtobereduced, new entrantstoappear, toentry barriers that LNG could be expandedtorealise andsecuritybenefits thefull diversity capacitywouldsurplus capacityatexistingLNGbutterminal needto terminals, industrial companies, ornationalenergy international companies. There issome supplies,shouldallow largeimport new market entrants,suchasmajor Turkish Growing demandover plusdecliningcontracted themediumtolongterm, addressing market reform andsecurityofsupplyconcernssimultaneously. topress ahead, amajor opportunity Fortunately, market offer circumstances volume transferpreference over contracttransfer. The government shouldconsiderrevising thenaturalgas market law togive by evidencefrom Austria,France, Germany, SpainandtheUnited Kingdom. than BOTAS otherslow, have todealwithcounterparties assuppliers beenreluctant released. ofthecontractrelease Theimplementation programme hasbeen several times,to2006,andonly4bcm(around 11% ofthemarket) was to beachieved through agas release programme. Therelease was postponed law, BOTAS are According tothe2001 likelysystem, torender thesereforms insufficient. monopoly withregard anditscontrol over to pipelineimports thetransmission those crossing Georgia orSyria)thosetransitingtoGreece, Bulgaria or , ’s was to20%by sharesupposedto belimited 2009, ofimports , . Volume transfer couldhelpovercomeasshown thisobstacle, , import and tradingoperationsfrom itstransmission/ import , , the state-owned vertically integratedgas vertically , thestate-owned , , however, its andinparticular de facto

The government ofTurkey should: can beturnedfrom avulnerabilitytoanopportunity. other signalsisespeciallyuseful; thus,Turkey’s highlevel ofgas-fired power power sectorwhichcanswitchfuelinresponse2009. Aflexible to market or lessonfrom January isanimportant companies parties andallinterested by thegovernment, (suchasthepower large sector),distribution users Turkey mightcontinuetocopeinthefuture. Inparticular, advance preparation insightsintohow 2009would yieldfurther Russia viaBulgaria in January here. Careful evaluation ofthelarge-scalegas interruption suppliesfrom supplies, orspot LNG. Increased commercialstoragecouldalsobeimportant inthepower orindustrialsector,fuel switchingflexibility orinterruptible lossofsupplyshouldbemet through measures suchasusingthe Short-term in Turkey. couldassistthisprocess system) development (possiblythrough theregulatory secure,resilient, competitive flexible, supplybase.Incentives forLNG terminal supplementingexistingandexpandingpipelines,givinga and terminals, andrapidlydeveloping group adiverse individual suppliers, ofLNG suppliers successfully,approaches very suchasSpain,limitingthemarket share of of emergency stylemeasures. OtherOECDcountrieshave utilisedthese securityissuesshouldbeaddressed through asuite and routes; short-term security ofsupplyinTurkey through ofsources theclassicalmeansofdiversity itshouldbepossibletoaddress Under long-term thesecircumstances, recognised. between gas andoilclearly mustbeminimised,andthedifferences risks non-commercial framework. Inshort, regulatory non-discriminatory stable, and markets,low transactioncosts,withina easyaccesstotransport, above trading conditionsare met, namelymultiplesources(includingstorage) Suchoperationsare mostsuccessfulwhere thatthiswould the entail. benefits market andcompetitiveness (supplementingitsrole inoil)withtheflexibility In addition,Turkey aspirationstocreate aliquid haslegitimate gas trading multiplemarket-based accessavailable entrantsandusers. tofacilitate party needtobecost-based,kept toaminimum,andthird- avoided. Pipelinetariffs domesticneedsandtransitshouldbe between pipelinesserving Distortions ◗ • • Urgently implement anewrevitalised package ofgasmarket reforms to ensure anindependent gastransmission operator; effectively unbundleBOTASeffectively , ; 83

© IEA/OECD, 2010 84 ◗ ◗ • • Ensure securityofsupply through abalanceoflong-termmeasures to Continue to work co-operatively with countriesandcompanies alongthe develop newsupply andtransit routes. chain togas transport facilitatethetrans-border pipelineinvestment andto storage andspot LNG. measures to increase system flexibility, such asfuelswitching, increased encourage supply diverse andstorage investment, andasuiteofshort-term reduce BOTAS is sustained; ensure thattherecent restrictions progress ineliminatingimport-export , ’s market’s dominance.

Source: Ministry ofEnergy andNatural Resources. Source: Ministry and sub-bituminouscoal includingasphaltite Lignite, Hard coal Afs by demandfrom Çan18 two newpower lignite-fired stations, and Mart been driven increase by inelectricitydemand and,inparticular, significant to2007rapidly intheyears (seeTable 8).Recentgrowth inoutputhas production butincreasedLignite felltounder45milliontonnes(Mt)in2004 Table mainlyfrom AustraliaandtheUnited States. is imported in2008),whilecokingcoal largest single coal(55%ofimports sourceofsteam around 90%ofitshardcoalneeds.Russia ituses,butimports isthe the lignite production spread through almostallregions Turkey ofthecountry. produces all and reserves withsignificant Ofthetwo,more isbylignite. lignite far important, in2008and 50%in2007.of thetotal Turkey produces both hardcoaland 29.4 Mtoein2007 (29.4%ofTPES).Domesticproduction covered around 57% for29.5Mtoe,or29.9%ofTPES.ThiscomparedCoal usein2008accounted to The largest depositsare found intheAfs are oflignite extensive, withproven of7946Mt (seeTableReserves reserves 9). requires labour-intensive conventional instead production methods. geological structure whichmakes mechanised coalproduction impossible and complex basin ontheBlackSeacoast. TheZonguldakcoalbasinhasavery year. Hardcoalisfoundandminedinonlyonelocation,theZonguldak in 2008,just12% ofTurkey’s hardcoalconsumption of21.6 Mtinthesame Production 2.6Mt ofhardcoalhasalsoincreasedtoanestimated since2004 inthefuture, to210significantly Mtby 2020,accordingtoMENR. caused by poorhydrological production conditions.Lignite isprojected torise , in Elbistan B, and in part by capacityreductions athydropower B,andinpart in Elbistan plants Coal Production by Type ofCoal, 2000to2008 0020 072008 2007 2004 2000 0864 3 29276 801 72902 431 44 60 876 9 4 6 2601 2462 1946 2 392 (thousand tonnes) 8 , in-Elbistan basin in south-eastern basininsouth-eastern in-Elbistan (estimate) COAL 85 7 © IEA/OECD, 2010 DEMAND 5. The scope of this project, conducted by the State Mineral Reserves MTA, was Thescopeofthisproject, sinceexpanded and byMineralReserves conducted theState 5. 86 across 30000km outresearch andprospecting studies deposits within20regions, tocarry Deposits”. renamed andDeterminationofNew the“Development ofMineandGeothermal SpringReserves households 9%. (including cokearound ovens and 46%, industry andblastfurnaces)44% and hardcoalconsumption in2007, power for generationaccounted ofthecombinedlignite ofhardcoal.Intotal, power sectorusedaquarter in 2007, The makingupcloseto 30%ofthetotal. industry withthesteel ofhardcoalconsumption foraroundfurnaces, accounted three-quarters industrial processes. Bycontrast,industry, includingcoke ovens andblast the remainder beingsplitmore orlessequally between heatingneedsand Around 87% is usedforgeneratingelectricity, ofdomesticlignite with Table and ExplorationofNew Depositswas in2005 initiated A project ontheDevelopment ofExistingMineralandGeothermal Reserves mining activities,mainlyintheSoma,Tuncbilek andBeypazari basins. production isfrom opencastmines.However, there are someunderground and Sivas basins(seeFigure 23).Almost90%ofTurkey’s lignite total deposits are intheTunçbilek, located Seyitömer, Çan,Mug Bursa, Anatolia andthesecond-largest intheSomabasin,whileother important Source: Ministry ofEnergy andNatural Resources. Source: Ministry are between 1000and2kcal/kg), andofhardcoalbetween 6200and7kcal/kg. varies between 1000and4200kcal/kg valuereserves Note: oflignite (two-thirds Thecalorific ofreserves Total Proven Probable Possible are muchsmallerat1335Mtofwhich535are proven. pushingthisupto11figure, 507 Mt(seeTable 9).Total ofhardcoal reserves 2010. reserve This project lignite hasadded4billiontonnestothetotal Lignite andHard CoalReserves, 2008 2 in total andtodo170 intotal 500mofdrillingfrom 2005to (million tonnes) 11 507 Lignite 9 900 1 345 9 262 5 toexplore new lignite Hard coal 1 335 ˘la, Beypazari ˘la, 535 368 432

20 30 40 10 9317 9318 9319 032008 2003 1998 1993 1988 1983 1978 1973 0 Mtoe growth projected inelectricity demand. in foreseeing alarge power expansionincoal-fired generation tomeet rapid decisions andnew capacity, butTurkey outamong OECDcountries stillstands than 20MWofcapacity. Not alltheseapplicationswillresult ininvestment with less units,mostof which areadditional 46coal-fired industrialboilers Authority(EMRA) hasapprovedMarket applicationsforan Regulatory Currently there are 15 power withcoal-fired sites plants,andthe Energy 9onElectricity). (seeChapter ofthetotal quarter capacity, andcoal-fired lignite had some9800MWofinstalled around one- for45.1coal accounted coalfor12.6 andimported In2008,Turkey TWh TWh. on line.Ofthe57.47 power ofcoal-fired generationin2008,domestic TWh beforeuntil 2004 rebounding came as two newpower lignite-fired stations generation was ashigh47% in1986 butdecreased thereafter steadily in 2008(57.7 of198.4 outofatotal Theshare inpower of lignite TWh TWh). electricitygeneration oftotal forover accounted Coal, mainlylignite, aquarter Source: ** negligible. agriculture/forestry, consumption. andother final fishing includesnon-energy use. Industry * TPESby consumingsector. Otherincludesother transformationandenergy sectorconsumption. may berevised infuture issues. mineralsin2008.Historicaldata ofnon-metallic underconstructioninstead cement kilnsisreported industry, residential andcommercial/ forother bituminouscoal.Somecoalusedin public services occur inconsumption withintheiron industry, patterns coalminingaswellacross andsteel for2008areNote: provided Data from theresults ofanimproved questionnaire. changes Significant Energy Balancesof OECD Countries, Coal Supplyby Sector*, 1973to2008 includes residential, commercial, public services, Commercial includesresidential, commercial,publicservices, IEA/OECD Paris,2009. 22 22 generation Power Other Commercial Industry Transport** 87

Power plant UKRAINE Hard coal RUSSIA BULGARIA Lignite

Black Sea

GEORGIA Kirklareli Çatalagzi B Tbilisi Edirne ZonguldakA&B GREECE Istanbul Samsun Artvin Biga Ardahan Bartin ARMENIA Sakarya Ordu Trabzon Amasya Yerevan Çayirhan A Gümüshane Canakkale Bursa Ankara Bayburt Çan Orhaneli Sey Hömer Kirikkale Yozgat Erzincan Horasan Eskisehir Sivas Erzurum Balikesir Tunsbilek A&B TURKEY Kangal SomaA&B Aliaga Elazig Afyon Kirsehir Kayseri Selmo IRAN Turgutlu Malatya Izmir Aksaray Afsin Elbistan Batman Diyarbakir Konya A&B

Yatagan Yeniköy Kahramanmaras Mugla Mardin Karaman Kemerköy Antalya Iskenderun (Sugozu) Gaziantep Ceyhan IRAQ Iskenderun km SYRIA 0 80 160 Mediterranean Sea The boundaries and names shown and the designations used on maps included in this publication do not imply official endorsement or acceptance by the IEA. Source: IEA.

coal usedinpower injection toTTKasa generation. Treasury capital performs was producers steel USD180 pertonneandUSD50to 55pertonneofhard lower atanaveragesignificantly ofUSD100 pertonne. Thepriceforiron and set prices–onthedomesticmarket by TTKatlevels import thatreflect were at anaverage ofUSD289pertonnein 2008;however, thesellingprices– Production costsofhardcoalfrom Turkish (TTK)were HardCoalEnterprises (seeTable support sector,to thelignite state significant 10). receives very By contrast,thehardcoalsector, ascompared with relatively smallreserves recover itscostsandmake aprofit. producer,lignite Turkish (TKI),hassince1995 CoalEnterprises beenable to sectorinTurkeyThe lignite doesnot receive subsidies.Themainstate-owned The prioritiesinTurkey’s coalsectorpoliciesare: Restructuring ofthecoalsectorhasbeenunderway sincethe1990s. mainindigenousresources.environment-friendly useasoneofthecountry’s ofcoalanditseconomic,secure, reliable and the explorationandexploitation In accordancewithnationalenergy policy, coalpolicyisbasedondeveloping legislation oncoalwithEUlegislation,whileincreasing indigenoussupply. Turkey andismoving toharmoniseits forEUmembership isacandidate carbon energy economy in an economically sustainable manner.carbon energy economy inaneconomicallysustainable tolimitemissionsgrowth targets andmoveactions andvoluntary toalow- TurkeyIn thiscontext, isplanning toadoptnationallyappropriate mitigation global against change,in accordancewithitsspecialcircumstances. fight climate totheKyotoAs aparty Protocol, theTurkish government tothe iscommitted is opentoforeign investment. There are nolegal restrictions onprivate-sectoroperationsandthecoalsector ● ● ● ● ● ● developing existingindigenousresources; in thermalpower plants,households andindustry. promoting intheutilisationofcoal theadoptionofcleancoaltechnologies andcurrently inactive coalmines;and privatising someinefficient restructuring thecoalminingsector; increasing theuseofdomesticcoalatpower plants; generation; through to2023forelectricity utilising known andhardcoalreserves lignite 89

© IEA/OECD, 2010 EFFICIENCY ANDPOLLUTIONCONTROL 90 emissions; fluidised-bed technology alsoreduces technology NO emissions; fluidised-bed power plantsÇan18 andAfs Mart in Table 11. They improvement show asignificant by thenew lignite-fired large power ofselected coal-fired plantsare shown The actualefficiencies gas desulphurisation(FGD)(Afs (Çan18 technology been builteitherwithfluidised-bed orwithflue- Mart) higher current emissionlimits. The mostrecent power coal-fired plantshave now largely follows theEU Large Combustion PlantsDirective, albeit with place inTurkey sincethelastin-depthreview; applicableTurkish legislation andpollutioncontrols haveHigher environmental standards beenputin andlifespanofexistingpower plants. increase theperformance projects in2005.Theaimoftheserehabilitation isto work thatwas started andmodernisation ofrehabilitation 2005. They alsoshow, theeffects inpart, Table was onaverage around USD250pertonne. government subsidy, mainlytorecover thecostoflabour. In2008,thissubsidy o fepoesTK1 5 1291 1 0559697 10 565 10 611 11 249 Source: Under-Secretariat ofTreasury, TTK. 12 552 Aid peremployee (USD) No. ofemployees TTK Aid pertonne(USD) Aid pertonne(TRL) Total aid(USDmillion) Total aid(TRLmillion) (thousand tonnes) Production plants are privatised. upgrades intorequirements willbeincorporated fornew ascoal-fired owners, environmental itisplannedthatfurther of existingplants.Inthiscontext, tooltoimprove an important productivity andenvironmental performance Privatisation ofthegenerationsegment oftheelectricitymarket isconsidered plantsarefired covered by thisinitiative because ofresource constraints. and improvementsprecipitators inash-handling,althoughnot allcoal- withFGDs,electrostatic several plantsare coal-fired beingrehabilitated State Aid to Turkish (TTK), Hard CoalEnterprises 2004to2008 1312 5 7442 7 41 053 28878 37 434 25054 21 311 0420 0620 2008 2007 2006 2005 2004 8 6 2 7 1586 1675 1523 1666 1 881 0 2 7 3 326 517 238 399 375 571 228 380 203 382 6 8 9 0 398 305 397 282 267 4 6 6 8 251 182 261 169 142 , in Elbistan B). These technologies reduce B).Thesetechnologies SO in Elbistan , in Elbistan Bthatwere commissionedin in Elbistan 10 x emissions.Inaddition, 2

Capacity, Units, MW Name Owner e Pollution control Plant efficiency, % LHV, net output MWe (commissioned) 2003 2004 2005 2006 2007 2008

Afs,in EÜAS, 1 355 3 x 340 (1984-86) 28.9 27.3 27.2 30.2 31.1 30.4 Elbistan A 1 x 335 (1987) Afs,in Elbistan B EÜAS, 1 440 4 x 360 (2005) FGD – – – 34.5 35.7 37.3 Biga Icdas AS 135 1 x 135 (2006) CFBC Çan 18 Mart EÜAS, 320 2 x 160 (2005) CFBC – – – 41.5 39.5 39.1 Çatalag˘zi B EÜAS, 300 2 x 150 (1989/91) 32.0 30.9 30.7 27.4 28.2 27.6 Çayirhan EÜAS, 620 2 x 150 (1987) FGD (Operated by Park Termik 2 x 160 (1998/99) Elektrik under Transfer of Operating Rights Agreement) I•skenderun Evonik Steag AG / Oyak Group 1 320 2 x 660 (2003) FGD/LNB (Sugozu) (Build-Operate Model) Kangal EÜAS, 457 2 x 150 (1989/90) FGD (unit 3) 30.0 30.6 30.4 29.7 29.5 29.2 1 x 157 (2000) EÜAS, Kemerköy 630 FGD 33.1 33.2 34.9 34.2 32.9 Subsidiary Orhaneli EÜAS, 210 1 x 210 (1992) FGD 38.2 39.1 38.5 35.9 33.9 35.2 Soma A EÜAS, 44 2 x 22 (1957/58)) 30.5 28.6 27.5 27.5 28.7 28.3 Subsidiary Soma B EÜAS, Subsidiary 990 2 x 165 (1981/82) 32.5 30.8 29.2 30.4 31.5 30.3 2 x 165 (1985/86) 2 x 165 (1991/92) 91 ... / ...

Name Owner Capacity, Units, MWe Pollution control Plant efficiency, % LHV, net output

MWe (commissioned) 2003 2004 2005 2006 2007 2008

Seyitömer EÜAS, 600 2 x 150 (1973) 33.4 33.2 32.8 34.1 32.6 34.2 2 x 150 (1977/89)

Tunçbilek A EÜAS, 65 1 x 65 (1956) 30.8* 33.0 34.9 31.2 35.6 33.2 Tunçbilek B EÜAS, 300 2 x 150 (1977/78) Yatag˘an EÜAS, Subsidiary 630 3 x 210 (1982-84) FGD 32.6 33.2 31.6 33.0 Yeniköy EÜAS, Subsidiary 420 2 x 210 (1986/87) FGD 35.5 39.2 35.8 37.3 Zonguldak A Eren Holding (160) 1 x 160 CFBC (to be commissioned in 2010) Zonguldak B Eren Holding (1 200) 2 x 600 CFBC (to be commissioned in 2010-11) TOTAL, all 9 836 coal-fired plants

CFBC – circulating fluidised-bed combustor; FGD – flue-gas desulphurisation; LHV – lower heating value (net calorific value); LNB – low-NOx burners. *The efficiency figures for Tunçbilek represent average values of A and B units. Sources: Ministry of Energy and Natural Resources; Energy Market Regulatory Authority, IEA Clean Coal Centre CoalPower5 database and EÜAS,.

private sectorby EÜAS In March2007, depositwas lignite tendered tothe theElbistan-Çöllolar successfully tendered, continues. private sector, ifnot ortransferringthelicencesbacktogovernment office depositstothe with operatinglicences.Thepolicyofleasingunexploited At thebeginningof2008,TKIhad15 active, 10 leasedand18 inactive mines secure approval ofanenvironmental impact assessment. project was approved. However, Tekirdag licence forpower generationandthe environmental impact assessmentofthe generation. TheEnergy Authorityawarded Market Bolu-Göynük Regulatory a wereBursa-Davutlar) leasedtotheprivatesector toproduce coalforelectricity sold totheprivatesectorandthree mines(Bolu-Göynük, Tekirdag was sector betweendeposit(Çankiri-Orta) 2002and2006.Oneunexploited Production ateightsmallTKImines ceased;they were leasedtotheprivate electricity generationtotheprivatesector. for suitable making smallminesandleasingcurrently reserves unexploited and increasing theinvolvement loss- ofprivate-sectorutilitiesby offering of improving productivity, consolidatingTKI’s operationalunitsandfacilities, TKI receives nodirect subsidiesanditsrestructuring continues,withtheaims rights, andcontractormining. production through mechanismsincludingleasing,transferofoperating production.of total Privatecompanies have rightstosomeTKIandEÜAS production hasincreased since2005andnow accountsforaround 10% Generation Co.Inc(EÜAS The key namelyTurkish producers, lignite (TKI)andElectricity CoalEnterprises with thefollowing major incentives provided toinvestors: forAfs A tender EÜAS 40% in2008. increased theirshare inhardcoal production, from 23%in2005tonearly Privatecompanies havehave indeedbeentransferred toprivateundertakings. under aroyalty payment arrangementandsomemines private undertakings Following MiningLaw, the2004 TTKisalsoabletotransfer itsrightsto for anew tender. ● ● purchasesfor15 willguarantee the State forpower years plantsthatwill purchase oflandforuse,except location;and thecostforpower station allexpropriation costs, willfinance the State start operation at the latest in2014. operationatthelatest start , cancelledthetender, upon evaluation ofthebids.Studies are underway , in Elbistan C and D power stations was CandDpower madeinJune2008, stations in Elbistan , tosupplycoalfortheAfs ,

), are state-owned. Theprivate-sectorshare), are in state-owned. ˘-Saray and Bursa-Davutlar failed to ˘-Saray failed andBursa-Davutlar , in Elbistan B power station. Bpower station. in Elbistan i.e. thecostsrelated tothe ˘-Saray and 93 ,

© IEA/OECD, 2010 CRITIQUE 94 energy supply. for eachmemberoftheTTK workforce to securityof –withmarginal benefits (TKK) reached almostUSD400millionin2008–more thanUSD40000 contractor mining.However, toTurkish support state HardCoalEnterprises through leasing,transferofoperating rightsand private sectortoparticipate ofminingoperations,Turkeythe efficiency hascommendablyallowed the since 1995 hasbeenabletorecover itscosts andmake To aprofit. increase in2008, receives48% ofdomesticallyminedlignite nodirect subsidiesand Turkish company (TKI),thestate-owned CoalEnterprises thatproduced forapplicationinTurkey.cost-effectiveness and value,increase shouldbeexaminedtoassesstheirsuitability itscalorific thisfuel,andthus developedtechnologies inGermany andAustraliatodry are Given proven theprojected growth andaffordable. production, inlignite capture at new technologies power coal-fired plants,oncethetechnologies canbetaken todaysteps atlow cost thatwould enablethefuture retrofit of nearDiyarbakir.from Forexample, theBatiRamanheavy-oilfield prudent building on its long-standing experienceofusingCO building onitslong-standing Carbon dioxide capture andstorageisakey optionthatTurkey shouldexplore, coal technologies. thedevelopment andtoaccelerate anddeployment ofcleaner these efforts, Itwillbeanimperativeenvironmental standards. tocontinueandintensify ofEÜAS the efficiency The government since2005toincrease hastaken commendablesteps togive clearsignalstoprivate investors inthesector.important policyoncarbonpricingwillbe coal inthepower generationmix.Defining be fullytaken intoaccountwhenassessingthecompetitive positionoflignite/ greenhouse gas changeissuesshould emissions.Environmental andclimate ofboth ofoverall localenvironmental pollutionandinterms creates risks increasesThe useofcoal(andespeciallylignite) energy security, butalso development ofindigenousresources isapriorityfortheTurkish government. powercoal-fired generationtomeet rapidgrowth inelectricitydemand.The Turkey outamongOECDcountriesinforeseeing alarge expansionin stands imports. hardcoalconsumptionof total andrelies onlarge subsidiestocompete with B.Domesticproduction ofhardcoal,at2.6Mt,covers lessthan12%Elbistan from Çan18 two newpower lignite-fired stations, particular andAfs Mart in-depth review, driven by theincrease indemandfrom thepower sector, in security ofenergy supply. production Lignite inTurkey hasrisensincethelast production ofalmost77 Mtmakes contributionto more afar substantial domestic production. Turkey produces both butlignite hardcoalandlignite, for29%ofTPES,slightlyoverIn 2008,coalaccounted halfofwhichwas , 's existing coal-fired plantsandtointroduce's existingcoal-fired tighter 2 for enhanced oil recovery forenhancedoilrecovery , in

The government ofTurkey should: impacts ofashrinkinghardcoalindustry. the government thesocial aidtoalleviate cancontinuetogrant substantial thereliability power ofcoal-fired coal would generation.Separately, not affect world coalmarket iscompetitive hard andliquid, andrelying onimported drawing onsimilarexperienceinanumberofIEAmembercountries.The The Turkish authorities shouldmove inthisdirection assoonpracticable, can beusedforother purposestothegreater oftheTurkish benefit economy. recommended linetotake forthehardcoalsector. Theeconomicresources Yet, phasingoutsubsidiesisthe althoughalways politically difficult, ofMENR. study was launchedwiththeparticipation structure itsactivitiestoincrease productivity. More recently, anactionplan to energyandTTKhasmadeefforts enterprises, viability ofstate-owned ofTreasurySecretariat have introduced new measures toimprove thefinancial In apositive development, PlanningOrganisation theState andtheUnder- ◗ ◗ ◗ Continue to pursue efficiency improvements coal-fired efficiency Continue to atexisting plants; pursue Reduce subsidiesforhard coalproduction andse Use thelicensingregime and,where applicable, international mechanisms hard coalindustry. subsidies withassistance to alleviatethesocialimpacts ofrestructuring the oftheactionplanforrestructuring ofTTK;replaceelimination, aspart economically reasonable. and storage (CCS)technologies canberetrofitted, whenavailableand technologies andmeasures tolignite-drying ensure thatcarboncapture generation technologies fornewcoal-fired generation capacity, including to reduce greenhouse gasemissionsto encourage take-up ofmore efficient plants. operation andrestoration ofminesitesandemissionsfrom coal-fired power ofenvironmentalensure regulations thestrict observance governing the t adatefortheircomplete 95

sources. Thegovernment viable potential for the technically has estimated Turkey has large potential forincreasing power generation from renewable biogas andindustrialwaste. less than200MWofgenerating capacityusingsolidbiomass,geothermal, wind power projects amountingtoclose2 186 MW. Incontrast, Turkey has onhydropower projects amountingtoaroundto bestarted 2500MWand wind power underconstruction.AsofDecember2009,constructionwas still Turkey hasaround 14 000MW of hydropower capacityand2500MWof to14amounted 553MWandwindpower to803MW. AccordingtoEMRA, more thanin2000.Hydropower capacity in December2009,agoodfifth renewableAccording totheTSO, electricitycapacityreached 15 433MW 24 in2001 in2004. TWh tothe highof46TWh andsince2000hasrangedfromvaries accordingtorainfall thelow of Hydropower generation and geothermal energy (0.5TWh). biomass (0.3TWh) andwindpowerof thistotal for4%(1.5 Theremaining 1%came from TWh). 28 IEAcountries(seeFigure 26).Hydropower for95%(35.9TWh) accounted total powertotal generationinTurkey, whichisthe12 In 2009,renewable sourcesprovided 37.8 ofelectricity, or19.6% TWh ofthe are torisefast. small,butexpected the hydrological conditions.Theshare ofgeothermal, windandsolarenergy for mostoftherest. Renewable energy production thusvaries dependingon renewablegood halfofthetotal energy supply, whilehydropower accounts third inNew ZealandandSweden.InTurkey, biomasscontinuestoprovide a for more (mainly hydropower) than40%ofTPESinNorway andaround one- countries (seeFigure 25).Forcomparison, renewable energy sourcesaccount in 2008(seeFigure 24), puttingTurkey inthe10th positionamongthe28IEA TPES hasalsodecreased,from falling around 17% inthe mid-1990s to9.5% the rapidgrowthenergy demand.Theshare ofrenewable inprimary energy in hasswitchedtomore modernformsofenergy,heating, asthecountry andfrom decrease hasresulted from thedeclineintraditionaluseoffuelwood for peaking inthemid-1990s, from more than11 Mtoeto9in2008.This supplyof renewable energy hasbeenonadownwardPrimary trend since RENEWABLE ENERGY RENEWABLE th highestshare amongthe 97 8 © IEA/OECD, 2010 98 Figure 24 Renewable Energy as a Percentage of Total Primary Energy Supply, 1973 to 2008

% 30

Combustible renewables 20 and waste

Solar

Geothermal

Wind* 10

Hydro

0 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

* negligible. Source: Energy Balances of OECD Countries, IEA/OECD Paris, 2009.

% 50

Combustible renewables and waste 30 Solar, other*

Geothermal 20 Wind

Hydro 10

Italy Spain Japan Korea Austria France Greece Norway Sweden Finland CanadaTurkey Poland BelgiumIreland DenmarkPortugal Germany Hungary Australia Switzerland Netherlands New Zealand United States Luxembourg Slovak Republic Czech Republic United Kingdom

99 * other includes tide and wave. Source:Energy Balances of OECD Countries, IEA/OECD Paris, 2009.

Combustible renewables and waste 60 Solar

Geothermal 40 Wind

Hydro 20

Italy Spain Japan Korea Austria France Norway Canada SwedenFinland Turkey Ireland Greece Belgium Poland PortugalDenmark Germany Australia Hungary Switzerland LuxembourgNetherlands New Zealand United States Czech Republic Slovak Republic United Kingdom

Source: Energy Balances of OECD Countries, IEA/OECD Paris, 2009.

6. Applying the conversion factor of0.7kWth/m Applyingthe conversion factor 6. 1 509MW capacityforgeothermal heatincreased frominstalled 1131 MW Secretariat andtheIEASolarHeating &CoolingProgramme.Secretariat also usedin215 spas(402MW around 81geothermal energy toserve 060residences. Geothermal energy is heating systems in17heating systems capacityof728MW municipalities,withatotal worldwide inthedirectamong theleaders useofgeothermal heat.District sources isgeothermal, 0.9Mtoeofwhichwas usedin2008.Turkey ranks of biomassare negligible. Thesecond-largest sourceofheatfrom renewable 5.0 Mtoeoffirewood was usedforresidential heating inruralareas. Otherforms Firewood isthelargest sourceofheatfrom renewable sources.In2008, belowgeneration are underPolicies detailed andMeasures. provide atleast30%ofelectricitygenerationby 2023.Targets by modeof 2009, thegovernment outlinesanoverall forrenewable target sourcesto In itsElectricityMarket andSecurityofSupplyStrategy, approved on18 May oftheappliances. efficiency Wider dependingonthedevelopments useisanticipated, inthepriceand mainly usedwhere transmissionofelectricityisnot economicallyfeasible. Photovoltaic applications have capacityofaround atotal 2MWandare power generatingcapacityof48GW andthegeothermal atlas600MW. for wind,solarandgeothermal energy. atechnical Thewindatlasindicates in 2009.Thegovernment hasprepared nationalatlasestomapthepotential hydropower generationtobe216 more timesthegeneration thanfive TWh, of whichwas domesticbiodiesel. ismarginal to15 andamounted Biofuels usefortransport ktin2008,most energy, or32.6Mtoe. whichthegovernment at380TWh, estimates potential forsolar technical slightly more thanonepercent ofthecountry’s large at31.5 GW Turkey’s 12 km 12 Turkey’s residential potential sectorandtherest remains, Significant inindustry. as to0.4Mtoein2008.Two-thirdswhich amounted ofthiswas usedinthe The thirdsourceforheatfrom renewable sourcesissolarenergy, theuseof th in2010. potential remains technical very untapped Thecountry’s 2 of solar collectors (equivalent ofsolarcollectors to8400MW th , accordingtogovernment estimates. th ) andgreenhouses (379 MW 2 ofsolarcollectorarea, as agreed uponby theIEA th ). Turkey’s total th 6 ) utiliseonly th in2005to th , use 101

© IEA/OECD, 2010 ELECTRICITY OVERVIEW POLICIES ANDMEASURES INSTITUTIONS 102 resource potential. however, berevised, dependingondevelopments intechnology, markets and energy useforpower generationshouldalsobeincreased. may, Thesetargets potential forgeothermal power infull.Solar capacityshouldbeexploited capacityof48GW. technical of theestimated The 600MWeconomical generation in2009.Wind power capacity shouldincrease to20GW, or42% the government thispotential tobe140 hasestimated fourtimes TWh, economically available hydropower potential shouldbeharnessedand atleast30%ofall electricitybysources shouldgenerate thatyear. All outlines large increases inrenewable electricitycapacityby 2023.Renewable In the2009ElectricityMarket andSecurityofSupplyStrategy, thegovernment Targets Strategy. from renewable sourcesinits2009ElectricityMarket andSecurityofSupply has,however,supply. Thecountry includedseveral forelectricity targets Turkey doesnot haverenewable legally energy forprimary bindingtargets hardly used,andremain marginal inthepolicydebate. inturn,are toheat(geothermalattention andsolar).Biofuelsfortransport, government topay hasfocusedonelectricity, more buthasrecently started topromote renewable manner. energy,in acost-effective Initsefforts the Turkey aimstoutiliseitsenergy potential, includingfrom renewable sources, market. theprogressand alsomonitors intherenewable energy segmentofthe theelectricitymarket Authority (EMRA)regulates andsupervises Regulatory andresearch onrenewablefor surveys energy sources.TheEnergy Market Power andDevelopment Administration(EIE)isresponsible ResourcesSurvey conducts studiesanddevelops policiesonrenewable energy. TheElectrical (EIGM) making. Within MENR,theGeneralDirectorate ofEnergy Affairs ofEnergy andNatural Resources(MENR)isresponsible forpolicy The Ministry

have orless. years beeninoperationfor ten this obligation by buyingelectricityfrom eligible generators, to theirshare ofthedomesticmarket intheprevious year. They have tomeet mustsellelectricityfrom renewableElectricity retailers sourcesinproportion Purchase obligation foreachrenewable energy source. feed-intariffs different considers amendment tothe2005Renewable amendment ElectricityLaw. Thedraft The government presented tothe ParliamentinNovember 2008adraft forexample 9). 2008(seeChapter inlate than thefeed-intariff, since2007,been closetothemaximumfeed-intariff andsometimes higher Inpractice,averagecontracts witheligiblecustomers. wholesale priceshave may alsoselltheiroutputonthespotGenerators market or viabilateral kWh. For2010, atTRL 0.1332/kWh. EMRAhasset thetariff totheequivalentof EUR5centsperkWhandlimited ofEUR5.5centsper the previous year, andislower boundedtotheequivalent by EMRA, asdefined including large hydropower. equals theaverage wholesalepriceof Thetariff before 2013. appliestoallforms of renewable energy, Thefeed-intariff Thisappliestopower plantstobecommissioned eligible forfeed-intariffs. Since 2007, power plantsthathave orlessare years beeninoperationforten Feed-in tariffs to seven before. years Since 2007, compared mechanismsare years, inforceforten allthesesupport instruments: electricity generationfrom renewable sourcesandincludethefollowing main Law. Together,Energy Efficiency they set thelegal framework forpromoting amendments. Alsorelevant are the2001 ElectricityMarket Law andthe2007 Purpose ofGeneratingElectricity, inMay enacted 2005,anditssubsequent is theLaw ontheUtilisationofRenewable Energy Resourcesforthe ofTurkey’sThe cornerstone legislationonelectricityfrom renewable sources Legislation ● ● ● ● ● Feed-in tariffs andpurchaseobligations; Feed-in tariffs Reduced feesforproject preparation andlandacquisition. Exemptions from licenceobligation forsmall-scalegenerators; Reduced licencefees; Connection priority; i.e.thosethat 103

© IEA/OECD, 2010 104 preceded by evaluation atechnical ofthelicenceapplication by EI for windpower plantsandissuingtherelated licences.Itslicensingdecisionis EMRA hasdeveloped aroad-map forreceiving andevaluating applications turbines tothegrid were 2008. includedintheGridCode inSeptember 9).Technical (seeChapter and stability fortheconnectionofwind criteria 15accommodate GW ofwindpower andisworking toensure grid reliability TEIAS reinforcement andgridconnections, transmissionsystem management. power generationrequire ofgrid in terms upgrading theelectricity system, increases inwindpower capacityby 2023.Theresulting increases invariable The 2009ElectricityMarket andSecurityofSupplyStrategy foresees large integration Grid point tothegrid. infrastructure andonpower linestotheconnection in thetransportation ofTreasury.Secretariat The85%discountalsoappliestofeesoninvestments ortheUnder-when thelandisowned by the GeneralDirectorate ofForestry operation. Thisappliestofeesonpermission,rent, rightofaccessandland-use of years ten given an85%discountonseveral land-usefeesduringthefirst New renewable energy plantscommissionedbefore theendof2012 are Reduced feesfor project preparationandlandacquisition licensing andcompany obligations. (withacapacityof0.5MWorless)are exemptedSmall generators from generators Exemptions fromfor licenceobligation small-scale ofoperation. eightyears licence feeduringthefirst non-renewable They are electricitygenerators. also exempted from theannual Renewable pay 99%lessfortheinitiallicensingfeethan electricitygenerators Reduced licencefees renewable energy plantsregarding connectiontothegrid. Transmission Corporation,andthedistributioncompanies togive priorityto The 2001 ElectricityMarket Law obligesTEIAS Connection priority power plants inthesamegrid location,TEIAS transmission capacitydoes not allow forthe constructionofseveral wind Efficiency Law. Efficiency to thehighestbidderunder theElectricityMarket Law andthe 2007 Energy , , the transmission system operator,, thetransmissionsystem hasprepared aninvestment planto , will tender theproject willtender licence , theTurkish Electricity • E. If limited E. Iflimited

state-owned energy companiesstate-owned (TKI,BOTAS from 1July2008,acost-based pricingmechanismamong aspects. Effective in thesector, andtheIEAcommendsdevelopments on thelegislative of itslegislation Energy ResourcesinElectricityGenerationisthecornerstone renewable energy production. The2005Law ontheUtilisationofRenewable Turkey progress sidetopromote hasmadesubstantial ontheregulatory will helptochangethisdownward trend. but, commendably, thegovernment hasintroduced andpoliciesthat targets energy supplythanthey didafew ago, years primary lesstototal contribute from renewable sourcesisrising.Inrelative renewable terms, sources source ofrenewable energy, isslowly declining,whileelectricitygeneration remained largely unchanged.Theuseof firewood forheating,thelargest Since the2005in-depthreview, Turkey’s renewable energy supplyhas regime. under thisfiscal ofitsbudget revenuelarge andbiofuelsare part likely toremain uncompetitive inJune2006.Turkeythis tax fuelsfora relies onexcise ontransport taxes having introduced biodiesel inDecember2006(forblendsupto2%),after on theexcise tax encourage thetake-up ofbiofuels,thegovernment lifted Turkey doesnot have abroad To policyonpromoting biofuelsfortransport. incentives foritsuptake. subsidiesortax does not offer Turkey doesnot have legislationconcerningsolarenergy forheat,and specific andenvironmental protection. use,efficiency after integrated useofgeothermal energy, there-injection ofgeothermal energy Directorate ofMineralsResearchandExploration.Thelaw also regulates the activitiesaretransferable. Site subjecttoannualinspectionsby theGeneral may forupto10 beextended Explorationandoperationallicencesare years. exploit geothermal resources. Operationallicencesare valid and for30years to shall bevalid forthree Anoperationallicenceisalsonecessary years. Aspeciallicenceisrequired oftheState. the property forexplorationand and protecting geothermal andnaturalmineralwater resources, whichare in June2007. therulesandprinciplesfor exploring, producing Itsets forth The Law onGeothermal ResourcesandNatural MineralWaters was enacted was passed in 2008; it will help the country to exploit its significant resources toexploit itssignificant was passedin2008;itwillhelp thecountry attractive pricelevel for investors. Legislationongeothermal energy resources applied. Thismechanismensures an cost-reflective priceswhichgenerate , , EÜAS , , TETAS , andTEDAS , ) isbeing 105

© IEA/OECD, 2010 106 the government avoid possible feed-in tariff budget overrunsthe government andsubsequent avoid possiblefeed-intariff Thiswould help spending onfeed-intariffs. intotal individual technologies orby spending onindividualtechnologies, limiting thesharethe absolute of Itcoulddothiseither by forindividual technologies. limiting feed-in tariffs The government shouldconsiderexplicitly andtransparently limiting the economicgrowthsupplies, fostering andprotecting theenvironment. energy policygoalsofsecuring as both are meansofmeeting theprimary closely monitorspendingonboth renewable energy andenergy efficiency, oftheprogramme. ofsupplysourcesandcost-effectiveness Itshould diversity between andrevise Inparticular, itifnecessary. system, there isatrade-off ofthefeed-in The government shouldcloselymonitorthecost-effectiveness later.investing now, ofwaiting instead inthehopeofreceiving highertariffs levels would alsopushcompanies to A timelydecisiononnew feed-intariff will decrease over towards timetoencouragetechnologies competitiveness. andpreferably thatthetariffs willbeextended, alsoindicate the tariffs thegovernment earlywhether shouldindicate time horizonisnot sufficient, Iffeedbackfrom suggeststhattheproposed stakeholders ten-yearcertainty. inregulatory theirconfidence remuneration over whichfosters years, ten mature, renewable energyInvestors technologies. would enjoy predictable expandingthedeployment ofother, would facilitate undoubtedly less tariffs relative toconventional fossilfuel-basedelectricity, buttheenhancedfeed-in manner.effective Large hydropower isalready, inmostcases,competitive Turkey inacost- incentive shouldmove system toimplement thedraft renewable energy sourcesisontheagendaofParliament. levels fordifferent tariff amendmenttoapplydifferent per kWh.Thedraft cappedattheequivalent inTurkishon afeed-intariff lirasofEUR5.5cents The current promotion mechanismforrenewable sourcesofelectricityrelies a credible promise ofprofits. work remains forattractingtheneededprivateinvestment. Thekey tothisis institutions are assistingTurkey toimprove butmuch accesstofinance, are needed.Commendably, theWorld Bankandother financial international To meet large the2023targets, investments ingrids andgeneratingcapacity double by thesameyear. toatleast increase electricitygenerationisexpected ingeneration,astotal renewable thisimplies sourcesby terms, 2023.Inabsolute aconsiderable The ambitiousoverall atleast30%ofelectricityfrom istogenerate target included inthe2009ElectricityMarket andSecurityofSupplyStrategy. Turkey’s itslarge potential forrenewable planstotap long-term energy are investors. wind, solarandgeothermal resources give valuable guidancetopotential theatlasesoncountry’s for heatandpower generation.Furthermore,

manner andhelp reduce greenhouse gas emissions. aslongtheseare andcost-effective produced ina sustainable transport, for non-electricitypurposes. Turkey couldconsiderexpandingbiofuels usefor also considerstronger mechanismstopromote theuseofrenewable energy haslarge potential forgeothermal andsolarheat, Turkeythe country should Electricity istheclearfocus ofTurkey’s renewable energy policy. However, as remove any remaining non-economicbarriers. issues.The governmenttraining, andsocialacceptance shouldcontinueto togridadministrative access,lackofinformationand hurdles,obstacles toincreasing renewableeconomic barriers energy supply, potentially including As inmostcountries,work remains inthearea ofovercoming non- roadmap (seeBox 4),asappropriate underthenationalcircumstances. IEA membercountries,considertherecommendations from thewind energy experience forguidance.TheIEAalsorecommends thatTurkey, andother SpainandGermany,notably andTurkey would dowelltoturntheir Several growth other fast IEAcountrieshave seenvery inwindpower capacity, oftheplanproceeds.implementation onthegridauthorities shouldtherefore asthe carefully monitortheeffects astheshare ofvariablethe electricitysystem generationincreases. TheTurkish butmoreadditional interconnections, isneededtoensure thereliability of will helpbalancethevariations inwindpower generation,andsowill today to20GW by 2023.Expandinghydropower andnaturalgas capacity wind power, planistoincrease capacityfrom around asthecountry’s 1GW electricity capacityintothegrid. Themainconcernistheinherently variable sources, Turkey needstoensure asmooth integration ofthis new renewable To succeedinitsambitiousplanstoincrease power generationfrom renewable introduced intheUnited Kingdom. by technology, differentiated whichhasbeenrecently tradable certificates, Alternatively, thegovernment couldalsoconsideraquota obligation with to underpininvestment, downward butalsolong-term pressure onprices. wouldneeded. Suchapremium provide system somerevenue guarantees wholesale price–thehigherprice,smallerpremium ofgraduallyOne suchoptionwould decreasing beasystem premium onthe to reduce investor risk. mechanisms,whileensuringpredictability inthedesignofsupport flexibility scheme. TheIEAencouragesthegovernment toassessoptionsforfurther level hasbeenchangedtothecurrent as requested by investors, thetariff However,price plus20%premium decidedby theCouncilofMinisters. levelThe 2005law ofwholesalemarket initiallyinvolved afeed-intariff countries. levels, asexperiencedinseveral IEA abrupt reductions infeed-intariff 107

© IEA/OECD, 2010 RECOMMENDATIONS 108 The government ofTurkey should: ◗ ◗ ◗ ◗ ◗ Source: of windpower CO (includingstrategic by raisingpublicawarenessIncrease socialacceptance ofthebenefits set incentives flexibility. tobuildtransmission;assesspower system resource-rich areas power andinterconnect infrastructure systems; toharvest advanceAppoint leadagenciestoco-ordinate planningoftransmission other needsandcompeting power system land/seausage. Advance planning ofnew plantstoattractinvestment, accountof taking appropriate carbonpricing. to drive investment, costreductions; set whilepursuing mechanismsfor market-based by predictable mechanisms supported Set targets, long-term Box finance optionsindeveloping regions.finance develop carbon atwindpower deploymentfurther finance bottlenecks; Exchange bestpracticewithdeveloping development countries;target additional transmission. of supplyandeconomicgrowth), andoftheaccompanying needfor Continue efforts to ensure apredictable andtransparent frameworkContinue efforts support Continue efforts to remove to renewable non-economic barriers energyContinue efforts to ensure smooth integrationContinue efforts ofnewrenewable electricity andpredictable to aspossibleand beasflexible Design thefeed-in tariff Consider stronger forthewideruseofsolarandgeothermal policysupport capacity into thegrid. such asapremium onwholesaleprice. mechanisms, insupport assess theoptions flexibility to introduce further decrease over time. to attract investments, incentives thatwill whilecreating technology-specific heat and biofuels for transport in asustainable way. andcost-effective heat andbiofuels fortransport development. Technology Roadmap–Wind Energy. IEA/OECDParis,2009. Key RecommendationsoftheIEA Wind EnergyRoadmap

4 2 emissionsreductions, security

200 250 100 150 50 0 9317 9318 9319 032008 2003 1998 1993 1988 1983 1978 1973 TWh while hydropower andoilhave seentheirshares decline(seeFigure 27). generationhasalsoincreased coal-fired penetrating markedly, rapidly; 2009. Within thatgroup, combined-cycle gas turbines(CCGTs) have been hydropower provided allelectricityin1990 in and99%ofthetotal Coal,gas, oiland but thegenerationmixhasremainedstable. fairly in1990,Electricity generationhasmore thantripledfrom 58TWh lessthan1TWh. andannualimports averaged around 2TWh ofelectricity, have exporter butonasmallscale.Inrecent annualexports years, hasreturned togrowth2008, but,accordingtotheTSO, in2010. Turkey isanet the contractionofTurkish economy in 2009,electricitysupplyfell2%from hydropower 19%, oil3%andother sources1%(seeTable 12 below). Following 2000. Natural gas fuelled49%ofpower generation,whilecoalprovided 28%, electricity supplyinTurkeyIn 2009,total reached 194 upby 51% TWh, from Source: * negligible. ELECTRICITY ANDNUCLEARENERGY Energy BalancesofOECDCountries, Electricity GenerationbyElectricity Source, 1973to2008 IEA/OECD Paris,2009. 27 27

Wind* Geothermal* Hydro and waste* renewables Combustible Coal Gas Oil 109 9 © IEA/OECD, 2010 DEMAND 110 and suchcontrols are still in progress. hadbeencontrolled todetectlosses andtheft 36.7 millionelectricityusers from 25%in 2002 to14%system in2009.ByDecember2009,some Turkeylosses andtheft. hasmanaged to reduce theirshare inthedistribution between electricitysupplyandconsumption isexplainedbyThe difference time,by 2%. summer peakexceeded peakforthefirst thewinter peak demandincreased by 56%andsummerpeakby 66%.In2008,the hasgradually decreased. From butthisdifference peak, 2000to2008,winter residential heating.Winter peakhastraditionallybeenhigherthansummer inDecemberowing to demandusually peaks conditioning load,whilewinter owing toair- inJuly-August in 2009.Summerdemandtypicallypeaks 29 249 MWin2007 and 30517 MWin 2008,butdeclinedto29870 MW According toTEIAS rise inpeakdemandrecent years. are, however,heaters becomingmore commonandhave tothe contributed oftheIEA average. andelectric Air-conditioners 2.3 MWh,isone-quarter sector(75%).Annualusepercitizen,ataround intheservice much faster Growth (55%)andhouseholds(53%),but was slightlyslower inindustry than 1%.Electricityconsumption increased by 55%from 2000to2008. for29%,households24% accounted andfishing less forestry and transport consumed 46%ofelectricity, agriculture, In 2008,industry whileservices, butisincreasing againaccording totheTSO, in2010. contraction, electricityusedecreased by around 2%from 2008to2009, from 2001 to2008,averaging 8.8%peryear. Asaresult oftheeconomic Demand hasgrown rapidlyinthepasttwo decades,particularly very electricitydemandreached 162 final In 2008,total (seeFigure 28). TWh but alsofrom windandnuclearpower, anew entrant-to-betothepower mix. supply from thecurrently dominantsour Strategy. foresees Thestrategy rapideconomicgrowth andlarge increases in includedintheMaytargets 2009ElectricityMarket andSecurityofSupply inthenearfutureThese scenarioswillbeupdated onthebasisofnew from 2008to2020. generation to increaseexpect total by some300TWh Government projections thatwere madebefore theeconomicdownturn Power generationinTurkey isset togrow strongly over thelongterm. from generationpeaked 2000.Oil-fired declining. in2002andissteadily varies accordingtoannualhydrological conditions,andincreased by 5TWh demand.Hydropower oftheincremental generation accounting foraquarter power grew incremental generation.Coal-fired 72% oftotal by 17 TWh, From 2000 to2009,gas-fired accountingfor generationgrew by 48TWh, , , the TSO, peakdemandrose from, theTSO, 27 594MWin2006to ces, especiallyhydropower andlignite,

200 100 150 50 9317 9318 9319 032008 2003 1998 1993 1988 1983 1978 1973 0 TWh are made to maintain securityof supply.are madetomaintain also planningtointroduce acapacitymechanismtoensure thatinvestments power should accountfor5%ofpower supply by 2020.Thegovernment is 20 000MWofwindand600 MWofgeothermal capacity. Finally, nuclear provide atleast30%of power supplyby thesame year, of andsub-targets generation by 2023. Italsosets anoverall forrenewable target energy to forpower itsplantoharnesstheeconomical hydro reserves andlignite states In its2009ElectricityMarket andSecurityofSupplyStrategy, thegovernment capacity ofallformspower generationwillhave toincrease substantially. In ordertorespond tothestrong growth anticipated inpower demand, availability plants. ofageinglignite-fired capacity isreduced by variations in hydrological conditionsandthelimited capacity. installed total Themargin capacityover between total peakdemand Together, naturalgas, hydropower, oilandcoalplantsaccountfor98%of build-upinCCGTs asignificant reflecting butalsocoalandhydro capacity. by 64%.Thiswas oneofthelargest increases inIEAmembercountries, 7.1% over 2008(seeTable 12). From capacityincreased 2000to2009,total Total 782MWby capacityreached year-end 44 2009,anincrease installed of Generating capacity Source: ** * negligible. includes commercial, public service, agricultural, fishing and other non-specified sectors. agricultural,andother non-specified fishing other includescommercial,publicservice, Energy Balancesof OECD Countries, Final Consumption of Electricity byFinal ConsumptionofElectricity Sector, 1973to2008 IEA/OECD Paris,2009. 28 28 Transport* Other** Residential Industry 111

© IEA/OECD, 2010 MARKET REFORM 112 maximum duration of wholesale, retail and imports and export licences. and export and imports maximum duration ofwholesale,retail are granted for atleast10 andnot years more whichisalsothe than49years, for non-market activities. Generation,distributionandtransmissionlicences and andsalestocaptiveregions; consumers; forsalestoeligibleconsumers accounts areSeparate required and foralllicensed activitiesandfacilities, for eachmarket where activity andforeachfacility theactivityiscarriedout. licencesare Separate requiredtransmission; distribution;wholesale;andretail. toissuelicencesforallmarketEMRA hasthepowers activities:generation; electricity market; resolves andappliespenalties. disputes; legislationonthe secondary sets theeligibilitylimitformarket opening;drafts Itissues licences,determinesandapproves regulatedhas several tariffs; tasks. The 2001 law created EMRAastheregulator oftheelectricitymarket. EMRA tocreateand taken competitive steps markets. wholesaleandretail distributionandgenerationbusinesses; toprivatise thestate-owned started energy regulator (EMRA)andimplemented alicensingregime. Ithasalso supply).Ithascreated anindependent distribution, wholesaletradingandretail businessactivities(transmission,generation, owned incumbentsintodifferent Since theenactmentof2001 law, Turkey hasunbundledthegovernment- implementing anew wholesalemarket regime. strategy, however, alsocovers market designandincludesaroad-map for toutilisedomesticsourcesforpowermechanism andtargets generation. The 2009. Thestrategy’s mainfocusisonsecurityofsupply, includingacapacity are outlinedintheElectricityMarket andSecurityofSupplyStrategy ofMay Turkey isalsoplanningwiderreforms intheelectricitysector. Theseplans andbalancingsettlement. andexports; grids; distribution;imports legislationonlicensing;tariffs; Law andits2008amendments,secondary Thelegal frameworksector participation. isbased onthe2001 ElectricityMarket supplyofelectricitythrough acompetitiveand cost-effective market andprivate- Turkey isgradually reforming its electricitysectorinordertoensure anefficient Table oa 9. 0 472100 782 44 5.2 2.1 32.5 100 2309.7 19.4 961.2 14 553.4 36.5 194.1 8691.3 3.4 18.5 16 345.2 1.1 21.7 48.6 6.6 35.9 2.2 Source: Turkish ElectricityTransmission Corporation(TEIAS 42.2 94.4 Total Wind, geothermal, biogas Liquid fuels(oil) Hydropower I Domestic coal Natural gas . pre ol1. . 2. 4.3 1921.0 6.6 12.8 coal mported Breakdown by ofGenerationandCapacity EnergySource, 2009 nrysuc eeain W hr,%Cpct,M Share, % Capacity, MW Share, % Generation. TWh Energy source 12 , ).

on a two-step reform. First, the existing transitional balancing and settlement theexisting transitionalbalancingand settlement on atwo-step reform. First, To make the wholesalemarket functionbetter, thegovernment hasdecided down in demand growth balance. during2009easedthe supply-demand but thegeneratingcapacity remained tightduring2008and early2009.Slow- increases in2008improved together withtariff thesituation, reflective tariffs, low andattimes below generatingcosts.Theintroduction ofcost- artificially have been alsobecauseregulated end-usertariffs has grown partly fast operatortopurchaseelectricityfrom thebalancingmarket.the system Demand whichinturnhave high growth forced indemandhasledtosupply shortages volumes inthebalancingmarket have because been attractive togenerators, contracts fellbyof electricitytradebasedonbilateral 38%.Pricesanddemand market. from 2006toMay September 2008,thevolume AccordingtoEMRA, tosellpower tothebalancing andstarted their contractswiththeconsumers sellingelectricitythrough contractsterminated bilateral came intoforce,suppliers August2006,when theTransitionalAfter BalancingandSettlement Regulation was themarket situationoftheenergy. priceindicatingthesupply-demand and announceddailythrough ofTEI thewebsite imbalance price.Thehourlymarginal pricewas onanhourly basis calculated priceswere produced, namely,different anhourlymarginal priceandasystem Within thescopeofbalancingandsettlementtwo implementations, forimbalances. balancing mechanismsaswellasettlement system tocover andreal-timeexpected thebulkofelectricitydemandwithday-ahead Turkey’s electricitymarket agreements modelcombinesbilateral thatare applicant inlessthan10 ofoperation. from years thestart operator,system andtheinvestment would bepaidbacktothelicence would beownedlicence applicant.Thefacilities by TEI constructing new by linesandothermay the facilities bemadeorfinanced investment for Thenecessary tothetransmissionsystem. or tobeconnected and/ connected includingeligibleconsumers users, toallsystem services transmissionandconnection are obligedtoprovide non-discriminatory operatorTEI The transmissionsystem by theendof2014. by theendof2011eligibility forindustrialusers andfornon-industrialusers The 2009ElectricityMarket andSecurityofSupplyStrategy envisions full threshold isset at0.1 GWh, corresponding toamarket openinglevel of63%. thiseligibilitythreshold forayearEMRA defines atatime.In2010, the consuming more than9GWh peryear becamefree tochoosetheirsupplier. directly tothetransmissionnetwork connected all consumers andthose The gradual opening oftheelectricitymarket began inMarch2003,when ˙ AS , and the distribution system operators operators andthedistributionsystem ˙ AS , . Theoretically, thisprice ˙ AS , orthedistribution 113

© IEA/OECD, 2010 Figure 114 WHOLESALE TRANSMISSION DISTRIBUTION GENERATION owned generationcompanies tobuildnew power plants. supply, maynot authorisestate- ensure theCouncilofMinisters sufficient Iftheresult does ofthetender upon thedecisionofCouncil ofMinisters. the capacity, acentrally organised couldbeemployed includingreserve, tender investments donot meet thedemandand/orifpeakisnot met by be developed toensure adequate supplycapacity. ifelectricity Furthermore, In additiontoanew wholesalemarket acapacity mechanismwill system, ofEnergy andNatural Resources. Source: Ministry afuturesmedium term, market isalsoplanned. time balancingpower market willcontinue.Following thistransition,over the the previous day. Thepracticeofhourlyreconciling imbalancesinthereal- forTEIAS andproviding system balancing theirown astabilised portfolios market outactivitiestowards thegoalof where marketwillcarry participants market,” planningtothe“day-ahead switching from day-ahead whichisaspot 2011, byThe secondphaseofthetransition,expected 1January entails ofthedemand-sideinmarketreform, active participation willbeensured. ofthe asof1December2009.Aspart are settled onanhourlybasis,iseffective marginalprice andthereal-timeprice.Thisprocess, system whereby imbalances demand. Two sets ofhourlypricesare namelytheday-ahead beinggenerated, “balancing power market” thereal-time balancingofsupplyand whichserves operatorTEIAS forthesystem system stabilised aimofproviding a trade,withtheprimary planning” foruseintheday-ahead (N-DUY). Thebalancingmarket the“day-ahead isdividedintotwo parts: mechanism was replaced by theFinalBalancingandSettlement Regulation The Structure of the Electricity Market oftheElectricity The Structure Electricity GenerationCompany Distribution Company Turkish ElectricityWholesale Turkish Electricity and TradingCorporation (TEDAS˛) (EÜAS˛) (TETAS˛) Transmission Corporation 29 29 Turkish Electricity (TEI , ˙ AS ontheprevious day; andthe ˛) Independentpowerproducers (Including autoproducers) Private wholesalers Private distribution companies , on

. IntheBOT schemes,privateinvestors buildpower themfora given plantsandoperate time.Transfer 7. producers 28.7 producers Independent power Corporation EÜAS Electricity Generation but legal obligations arisingfrom themstillremain (seeTables 13 and14). The 2001 law introduced market liberalisationandabolishedthesemodes, TOOR butdoesnot mode, theprivatesectoroperates, own, energy infrastructures. power purchaseagreements, buttheinvestors remain ofthepower theowners plants.Under the is soldtoTETAS ofoperation.IntheBOOschemes,electricitygenerated 20 years underlong-term 15 thedepreciation period,generally after of theplantstogovernment after or occurs ownership activities into separate companiesactivities intoseparate by thebeginningof2013. andthey mustunbundletheirgenerationandretail ineligible consumers by theendof2010. Distributioncompanies to are themonopolysuppliers aiming tocomplete theprivatisation ofallregional power distributionnetworks tendered andfourofthem transferred totheprivatesector. Thegovernment is eleven ofthesecompaniesdivided into20distributioncompanies. were Thefirst withtherestructuration ofTEDAS Privatisation started segments oftheindustry. operator, by theprivatesectorinallother andallowed direct participation in 1994. The2001 law decreed TEIAS and TETAS (wholesale).TEDAS TEAS intothree companies, namelyEÜAS The 2001 Electricity Market Law ledtotheunbundlingofincumbent Table (BOT), (BOO)andTransfer Build-Own-Operate ofOperatingRights(TOOR). modes,namelyBuild-Operate-Transferdistribution through three different ingeneration,transmissionand the privatesectorwas abletoparticipate integratedcompanies butthesituationischanging.Untiland vertically 2001, The Turkish by hasbeendominated large, publiclyowned electricityindustry Autoproducers Build-Own-Operate rnfro prtn ihs4.3 Mobile Transfer ofoperatingrights Build-Operate-Transfer Total Source: Turkish ElectricityTransmission Corporation(TEI * provisional. Breakdown by ofGenerationandCapacity Company, 2009* opn eeain W hr,%Cpct,M Share, % Capacity, MW Share, % Generation. TWh Company , 9. 0. 472100.0 782 44 100.0 194.1 89. 5 43.8 13.9 13.9 , , thedistributionmonopoly, hadbeenformed – 13 , asthesoletransmissionandmarket , ˙ (generation),TEIAS AS 2561213.6 6102 22.5 612 0 54.0 24 203 46.1 487 14.8 , 2.2 . 3615 7.2 . 2439 7.2 ). – , in2005;thecompany was 263 650 1 16.8 510 , (transmission) 5.4 0.6 1.5 8.1 115 7

© IEA/OECD, 2010 TRANSMISSION 116 to 15% wholesalevolume ofthetotal intheprevious year. Bylaw,holders. themarket share ofany privatelyowned company islimited around 43%in2009.ByMarch2010, there were 45wholesalelicence- wholesalecompanyThe onlystate-owned isTETAS in 2008. capacityof141.4with aninstalled MWwas privatised andlicensedalready O 9 9 3792 - - 2956 13 871 212 - 2965 7023 982 106 2753 - 1060 301 876 1818 1132 - 2019 759 795 1286 Source: Turkish 686 ElectricityTransmission Corporation(TEIAS 3741 798 - * provisional. 1124 Total 2994 488 BOT 410 BOO 337 Public Private --100----100 the previous year. Thegenerationcompany ADÜAS privately owned company generatingcapacityin to20%ofthe total islimited include around 16 capacity. GW ofstate-owned Bylaw, themarket share ofany privatisations remained tobedetermined.Generationprivatisation would owned power plantsin2010. Bythetimeofwriting,structure ofthese Energy and Natural Resourcesonaplantolaunchthe privatisation ofstate- of assets. The Privatisation Administration(OIB)isworking withtheMinistry The government generation share planstoprivatise ofstate-owned asignificant of capacity. power purchaseagreements plants(withlong-term withTETAS electricity market to2009(seeTables 13 and14). BOO,BOT andTOOR capacityfrom for52%oftheincremental 2003,opening accounted had 17% capacityin2009.Together oftotal they withautoproducers, capacityin2009.Independentpoweraround producers halfofallinstalled The largest generationcompany EÜAS isthestate-owned Table 34 720MVA transformer capacity(seeFigure 30). gridend of2009,the400-kV high-voltage hadreached 14 623kmwith theelectricity market Italsooperates system. andislegally unbundled. By the TEI . New by GeneratingCapacity Type ofOwnership, 2003to2009 AS 20 0420 0620 0820*Total 2009* 2008 2007 2006 2005 2004 2003 , isthepubliclyowned thatowns thetransmission enterprise andoperates 14 , ). , , a former affiliate ofEÜAS , aformeraffiliate , , withamarket share of , whichcontrolled , ) had20.5% ,

Existing thermal power plant (TPP) UKRAINE Planned TPP Existing hydro power plant (HPP) RUSSIA BULGARIA Planned HPP Existing 400 kV power line Planned 400 kV power line 220 kV power line Black Sea 154 kV power line

Dimodichev

Habipler Sinop Tes GEORGIA Çayli Tes Akfen Afken Babaeski DGKÇ Samsun Tes Cengiz Batum Hamitabat Amasra Alibeyköy Ereğli Altinkaya San-Sel Tes Filippi Samsun DGKÇ Borasco Hopa GREECE Boyabat Borçka Z. Köy Osmanca Karabük Çarşamba Unimar Ambarli Kalkandere Deriner Gumri Ada-Gebze Arkun ARMENIA Içdaş Bağlum Çankiri H. Uğurlu Yusufeli Kars Kara Çayirhan Kayabaşi Tirebolu Içdaş Ordu-2 Gökçekaya Ispir Bursa Sincan KirikKale DGKÇ Akinci Horasan Çan Balikesir Tunçbilek Temelli Sivas I dirğ Seyitömer Içanadolu DGKÇ Kangal Ağri Kargi Erzurum D. Beyazit Soma Gürsöğut Kayseri Babek Özlüce Bazargan Keban Van Kocatepe Elbistan Aliağa Khoy Ye ilhisarş Karakaya Tatvan IRAN Manisa Uzundere Konya Diyarbakir Çetin Denizli Hakkari Aydin Atatürk Batman Silopi Tes Kavşak Ilisu Doğanli Seydi ehirş Yedigöze Andirin G. Antep PS3 Çukurca Yatağan Cizre Yeniköy Oymapinar Kiziltepe Kemerköy Adana Aksa Kayraktepe Birecik Erzin Zakho Varsak Ermenek Iskenderun Musul Mersin IRAQ km SYRIA Hatay Halep 0 80 160 Mediterranean Sea 117 The boundaries and names shown and the designations used on maps included in this publication do not imply official endorsement or acceptance by the IEA. Source: Ministry of Energy and Natural Resources.

© IEA/OECD, 2010 CROSS-BORDER INTERCONNECTIONS 118 According toTEIAS created outsideTurkey. regions willbepossibletoisolated possible through routing ofunits;exporting willbe and/orexporting oftheDCconnections,importing installation UntilAC-DC facilities. the (alternating-directconvertor current)/DC-AC acondition forbuildingtherequiredof neighbouringcountrieswillcontain and new connectionsbetween TEIAS countries.Therefore,non-ENTSO-E agreements tobeexecuted forexisting direct current (DC)lineswould with bethemainoptionforinterconnections The May 2009ElectricityMarket that andSecurityofSupplyStrategy states parallel withthenationalelectricitysystem. in ofanother country intheelectricitysystem unit ofageneratingfacility direction apower or a isalsoused,i.e.abilitytooperate generatingfacility theenactmentof2001For contractssignedafter law, themethod of unit fromthe neighbouringcountry, butisolated theremainder oftheTurkish grid. Turkey’s regional areas are importing runsynchronously withthenetwork of introduction ofthe2001 ElectricityMarket Law, “island”operationsare used: are followed.of ENTSO-E Under contractsthatwere signedbefore the unit” modesofoperation.Inboth cases,requirements andinstructions are carriedoutundertwo typesofcontracts,whichare “island” and“directed withtheseunsynchronised neighbouringsystems Power andexports imports are ratherlimited. neighbours for synchronising theTurkish and south-eastern withitseastern system Givenrequirements, technical ENTSO-E’s of itssystem. possibilities near-term improved frequency control, performance andoperationmaintenance In ordertoreach requirements thetechnical forsynchronisation, Turkey has electricitymarket.internal will ensure physical integration oftheTurkish withtheEU electricitysystem from Turkey800 to1300MWandforexports from 1000 to 1100 MW. This toTurkeyone withGreece. Net transfercapacityforimports willrangefrom 2010.September Theconnectionwillbeby three lines,two withBulgaria and synchronisation in isanticipated ofENTSO-E; Electricity whichisnow part prior tothat,withUCTE,theUnion fortheCo-ordinationofTransmission of the European Network ofTransmission forElectricityand, Operators System Turkey synchronisation hasbeenactively ofitsnetwork pursuing withENTSO-E, ● ● ● Bulgaria: each400kV(net transfercapacityNTC: two interconnectors, the other at154 kV (NTC: 150 MW); oneat400kVcurrently energisedIran: two at154 interconnectors, kV, and Azerbaijan (Nahcievan): at154 oneinterconnector kV(NTC: 100 MW); 700 MW); , , transfercapacitiesin2008were asfollows: , andtransmissionnetwork operators

and coalproviders, BOTAS and thegenerationcompany gas toitsstate-owned inturnpassedonarrears tothetransmission,generationandtradingcompanies, ledtoarrears further operatinglossesofTRL4.5billionfromtotal 2006to2008.Low tariffs retail levels were themaincauseofTEDASbelow generatingcosts.Thesetariff were in reducing network lossesandincreasing collection.At times,tariffs increase ingas improvements prices andingenerationcosts,limited from 2002to2007largely constant (seeFigure 31), asignificant despite hadbeenkept tariffs of acost-basedpricingmechanisminJuly2008.Retail was theintroduction A major towards step fullycost-reflectivetariffs retail companies toEMRA’s andsubjected approval. the beginningof2013, thepricecapwould beset by individualdistribution equalisation isbasedonacross-subsidy between distributioncompanies. From amongthedistributionregions.that result Thisprice from costdifferences orwhollyfrom theexistingpricedifferences to protect partially theconsumers is isappliedforalldistributioncompanies. Thepurposeofthesetariffs EMRA, whichisapproved authority by theregulatory tariff, a uniformnationalretail end of2012. are already cost-based.Until theendof2012, The wholesaletariffs reform policy,by the system isgradually moving toafullycost-reflective tariff ofitsmarketTurkey but,aspart hastraditionallyregulated end-usertariffs going below their target loss-theft ratio. going below loss-theft theirtarget component”, whichwillallow distributioncompanies toincrease revenue by From 2013 adjustment willincludea“loss-theft on,thedistributiontariffs by about50%, thereby reaching levels. fullycost-recovery average tariff retail 2008,July2008andOctober 2008)whichraisedthe increases (January tariff in2008was complemented Thetransition tothissystem byrates. three large basis ofchangesininput prices(coalandnaturalgas), andexchange inflation, are quarterly, adjusted onthe In theautomaticpricingmechanism,tariffs TRL 3.2billioninloanstocover lossesfrom suchnon-payments. the World since2002,thesetwo companies Bank, have taken onanestimated ● ● ● ● ● currently isoperationalat400kV(NTC: 250MW). Greece: at400kV. oneinterconnector Thelinehasbeencompleted and isplanned(NTC:second 400kVinterconnector 200MW); at400kV(currentlyIraq: oneinterconnector energised at154 kV)anda at400kV(NTC:Syria: oneinterconnector 230MW); at220kV(notArmenia: oneinterconnector inuse); line andaDCback-to-back inGeorgia isunderway station (NTC: 150 MW); Georgia: at220kVandproject oneinterconnector ofa400kVinterconnection , andTKI(Türkiye Kömür Isletmeleri).Accordingto 119 , ’s ’s

© IEA/OECD, 2010 Figure 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 9018 9418 9819 9219 9619 0020 0420 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 1988 1986 1984 1982 1980 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 1988 1986 1984 1982 1980 120 USD/kWh USD/kWh households (see Figure 32). andslightly below theIEAmedianfor close totheIEAmedianfor industry comparison, inTurkeyBy international electricitypricestoend-users are Source: Electricity Prices in Prices TurkeyElectricity andinOtherSelectedIEAMember Energy PricesandTaxes, IEA/OECDParis,2010. Countries, 1980to2009 Household Sector Industry Sector 31 31

Greece Greece Turkey Turkey Spain Spain Italy Italy

.000 .001 .002 .003 .004 0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 Spain, SwedenandtheUnited Kingdom. France,Belgium, Canada,Denmark, Germany, Greece, Korea, Luxembourg, Netherlands, New Zealand Note: Tax informationnot not available available fortheUnited Data States. forAustralia,Austria Source: Energy PricesandTaxes , IEA/OECDParis,2010. Canada, France, Germany, Greece, Korea, Luxembourg, New Zealand,SpainandSweden. Note: Tax informationnot not available available fortheUnited Data States. forAustralia,Belgium Norway Norway United States Electricity Prices inIEAMemberCountries, 2009 Prices Electricity Switzerland Finland Poland United States Portugal Turkey Czech Republic Norway Norway Hungary Hungary Japan Turkey Poland Switzerland Ireland Turkey Slovak Republic France Households United Kingdom USD/kWh USD/kWh Hungary Hungary Industry Portugal Japan Slovak Republic Ireland Netherlands Austria Italy 32 Italy 32 Denmark componen Tax componen Tax 121 t t , , ,

© IEA/OECD, 2010 PROGRAMME ACTIVITIES INPREPARATION FORANUCLEAR OVERVIEW NUCLEAR ENERGY 122 plant. nuclearpower first signed withtheRussian Federationtobuildthecountry’s andinMaybeen continuingwithpotential 2010 suppliers, anagreement was hadbeencancelled.Directannounced thatthetender negotiations have received. Following legal challengestotheprocess, inNovember 2009itwas of nuclearcapacitywas launchedinearly2008.However, onlyonebidwas including mechanisms forfundingtheseactivities. responsibilities forradioactive waste managementanddecommissioning, The law alsodefines or indirectly by meansofpublic-privatepartnership. innuclearpowerlaw projects alsoallows directly totake part theState by powerorganisations, purchaseagreements. the supported Furthermore, nuclear power plants,andtheirsubsequent operation by private-sector passed in2007. private-sectorinvestment inbuilding Thisaimstofacilitate A new law ontheconstructionandoperationofnuclearpower plantswas areSinop site underway. tolaunchanuclearprogramme, evaluation whilesite activitiesforthe effort wasthe BlackSea.TheAkkuyusite licensedin1976 ofaprevious as part coast,theother oneatAkkuyuontheMediterranean atSinopon identified, plans have repeatedly beendeferred. However, have sites two been suitable Turkey hasbeenconsideringbuildinganuclearplantsincethe1970s, but organisations hasbeendrafted. isenvisaged, andalaw to thiseffect of TAEK’s two separate activitiesby establishing research andregulatory nuclear power andregulating Theseparation nuclearactivitiesinthecountry. 1962. Inadditiontoitsresearch activities,TAEK isresponsible forpromoting where aresearch reactor nearIstanbul, hasbeeninoperationsince Institute in1956.established theÇekmeceNuclear Itoperates ResearchandTraining The Turkish Atomic Energy Authority(Türkiye Atom Enerjisi Kurumu, TAEK) was A competitive process tendering fortheconstructionofupto5000MW the legal andinstitutionalframework neededforanuclearprogramme. by have 2020.Anumberofsteps beentaken over recent toprepare years and SecurityofSupplyStrategy envisages acontributionfrom nuclearpower been consideringnuclearpower formany The2009ElectricityMarket years. nuclearresearch programmeconstruction, buthasalong-standing andhas Turkey doesnot currently have any nuclearpower plantsinoperationorunder e

Its proposal was tobuildfour1200MW ledby nuclearvendor theRussian Atomstroyexport. state-owned a consortium one bidwas by 2008deadline.Thesolebidderwas submitted theSeptember initiallyshowed interest insubmitting bids,only Although several consortia to beinoperationby 2014. unit was scheduled oroperationoftheplant.Thefirst ownership financing, government entitywould norany bedirectly state-owned involved inthe supported by a15-yearsupported power purchase agreement withTETAS TAEK in2007. Financingfortheproject was tobearrangedby thebidders, by was established Akkuyu. Thetender basedonasetcriteria oftechnical operate a nuclear station ofbetween 3000and5MW anuclearstation operate electricitywholesalerTETASmanaged by state-owned anuclearpowerformally invited bidstobuildandoperate plant.The tender, ofEnergy and Natural Resources(MENR) 2008, theMinistry In February thefeasibilityofuraniumproductionrecently surveyed from somesites. activities)has Directorate responsible andChemistry forMining,Metallurgy amenable toopen-pitmininghave ETI-MADEN(General beenidentified. byconducted thegovernment, andjustover 9000tonnesofuraniumresources scale.Someexplorationactivitiesare currently onasignificant being extracted Uranium explorationinTurkey began inthe1950s, buturaniumhasnot been will beavailable. butthe2007wastes willbedeveloped stage, atalater law ensures funding operator. managementanddisposalofsuch plansforthelonger-term Detailed wastes from future nuclearpower plantswillbetheresponsibility ofthesite radioactive wastelow-level currently produced. managementof Theon-site amountsof atÇekmeceforthelimited There storagefacility isaninterim Russia continued on the Akkuyu project, as part ofbroaderRussia discussions on continued on theAkkuyuproject, aspart this,directcancelled. Despite government-to-government discussionswith existing tender. Subsequently, TETAS suspendedtheawardsupreme administrative ofany court) contractunderthe governing process, thetender inNovember Council(Turkey’s 2009theState However, following alegal challengetothe2008regulation onnuclearenergy power purchaseagreement) continuedduring2009. (includingonthepricetobe paidforelectricityunderthe commercial terms responsible forcommercialevaluation of theproject, anddiscussionsonthe merits ofthebidreceived, andfoundthatitmet itsrequirements. TETAS (pressurised water reactor), known asAES 2006. TAEK considered thetechnical , announced that the tender hadbeen announcedthatthetender e reactors oftheVVERtype reactors , , was tosupplyand e , tobebuiltat , . Neitherthe , was 123

© IEA/OECD, 2010 ELECTRICITY CRITIQUE 124 reach aninitialagreement ontheproposed project by 2010. September a MoUonco-operationregarding nuclearpower plantprojects. Theaimisto by theUnited InJune2010, ArabEmirates. Turkey andSouthKorea signed which are underconstructioninKorea andfourofwhichwere recently ordered at Sinop.Thiswould involve theAPR-1400 two of reactor design,thefirst developments: Electricity Market andSecurityofSupplyStrategy foresees thefollowing key integrity andsecurityofsupply. Concerningtheelectricitymix, the2009 Italsorequiresand environmental standards. careful tosystem attention to market reforms, theelectricitymix,andimprovement ofefficiency withregard great policyopportunities situationoffers specific This very a unique challengeamongIEAmembercountries. will require generatingcapacity, atleastdoublinginstalled whichrepresents projections –electricityconsumptionconservative willdoubleby 2020. This in 2008/09willnot trend changethelong-term andthat–accordingto decrease inconsumption duringtheeconomicdownturnthat thetemporary 2000 to2007 electricityconsumption increased by 50%.Itisexpected electricitydemandisgrowingrising livingstandards, from atahighrate: With growth thefast oftheTurkish economy, increasing populationand jointly studythefeasibilityofafour-unitnuclearplantaround 5400MW utilityEÜASstate-owned Meanwhile, inMarch2010 agreement was apreliminary announcedbetween theproject was signedinMay 2010.start energy to andtradeco-operation.Anagreement foraRussian-led consortium it may offer new possibilitiesinthe longerterm. it may offer of nuclearelectricitygeneration may addonlymarginally tosupplyby 2020, to ensure timelyandadequate investments. Inaddition,whiletheintroduction price signals, notably CO price signals,notably Such major investments require framework arobust andeffective regulatory ● ● development ofnewpowerSignificant coal-andlignite-fired plants(8GW More thandoublingtheproduction of electricityfrom renewable sourcesto 20 GW ofwindpower (2.5GW licensed,new projects). development ofthehydro potential (14. GW licensed,new projects) andupto provide atleast30%power supplyby 2023,mainlyby meansofanambitious supply butraisingmajor ofCO concernsinterms toensure securityof licensed, new projects), necessary whileundoubtedly , andtheKorea ElectricPower Corporation(Kepco) to 2 cost and fine-tuned incentives forrenewable costandfine-tuned energy 2 emissions. e

nuclear electricity plants,ithasnot previously beenused fornuclearprojects. hasbeenusedinTurkey modeladopted financing andelsewhere fornon- may interest inthetender.Several explain thelimited factors Althoughthe following alegal challenge. only produced asingle bidder, andtheprocess was subsequently cancelled multi-unit plantwas launchedinearly2008.However, forbids theinvitation plants; acompetitive process tendering fortheconstructionandoperationofa alegal frameworkestablished forconstructionandoperationofnuclearpower tobecomeanuclearenergy Thenew country. law in2007 adopted efforts Since thelastin-depthreview, Turkey progress hasmadesignificant inits Nuclear power focussoastolimittheneedfornew generatingcapacity.particular metering,merit andsmart demand side,suchasenergy saving, peakshifting inthesedirections. Inarapidlygrowing economy,efforts measures onthe expanding cross-border Thegovernment interconnections. shouldincrease supply,ways: andflexible by diversified by demand-sideinitiatives andby canbeachieved inthree Thisflexibility of thepower fundamental system. variable renewable sources,suchaswind,dependsonthedegree offlexibility IEA membercountriesreveals thatalarge integration ofelectricityfrom Theexperienceofmanyupgrading andexpansionofthetransmissionsystem. forrenewableThe ambitioustargets electricitywillrequire significantly thewholeregion. benefit renewable electricity, whichwillreinforce Turkey’s securityofsupplyand asregards andnewflows synergies withneighbouringcountries,inparticular in 2010. new electricity significant These developments willallow forvery whichshouldbecomeeffective (ofwhichUCTE isnow part), with ENTSO-E progress was achieved by TEIAS linestoBulgaria). tothetwo existinghigh-voltage Majorpreparation (further Greece waswithGeorgia andRomania completed are in andadditionallinks Since thelastin-depthreview in2005,thenew to 400-kVinterconnection project becomeclear. be possibletoprovide areasoned assessmentonlyoncetheeconomicsof new purchaseagreementsjustified ( of theexistingpurchasingagreements andwell- and,ifnecessary, tolimited by TETASoperator exerted competitive electricitymarket. therole Inthiscontext, ofpublicwholesale Transitional measures have inordertomove beendefined towards afully basisfortheelectricitysector.to create asoundeconomicandfinancial energy companiesthe state-owned by mid-2008,Turkey tookamajor step competition. With theintroduction ofacost-basedpricingmechanismfor comprehensive reform ofitselectricitymarket andinitsgradual opening to Since thelastin-depthreview, Turkey hassuccessfullyengaged ina , should be limited to the necessary phasing-out tothenecessary shouldbelimited , inview ofthesynchronous interconnection e.g. nuclear).Asregards nuclear, itwill 125

© IEA/OECD, 2010 RECOMMENDATIONS 126 The government ofTurkey should: fornuclearresearch andtrainingwillberequired.continued support innuclearconstructionandthefuelcycle, of domesticindustry government. Inparticular, ifthegovernment aimstodevelop theparticipation and its other activities,andcontinuing todevelop theskillsbaseinindustry management, proceeding withseparationofTAEK’s functionsfrom regulatory This includesdeveloping andimplementing plansforradioactive waste therequiredestablish foritsnuclearprogramme. institutionsand facilities Over Turkey thecomingyears to willneed to continuetake steps guarantees. manage contingentliabilitiesthatmightarisefrom state a case,however, measures shouldbetaken inordertomonitorand necessary andhencethecostofelectricityproduced.reduce Insuch overall risks financial involvement ofamajor domesticutility, especiallyonebacked by could theState, plants, probably jointlywithforeign andother domesticinvestors. Thedirect One optionwould beforEÜAS nuclearplantsandforthesaleoftheiroutput. structureownership ofany further thegovernment mayNevertheless, needtoconsideradditionaloptionsforthe agreed atgovernment-to-government level inMay 2010. atAkkuyuwas inbuildingandoperatingafour-unitnuclearstation part commercial andpoliticaldiscussions,adealforRussian companies totake protracted level.Korean After atgovernment suppliers, aswellatindustry plants. Rather, direct negotiations were entered intowithRussian and the competitive oneortwo nuclear process, tendering atleastforthefirst Following cancellation,thegovernment thetender decidednot topursue electricitypriceunderthepowerhigh guaranteed purchaseagreement. construction andoperation,toprovide anadequate return would require a ofboth was preparedEven risks where totake aconsortium onthefinancial theplantsonbasisofpowerto operate purchaseagreement offered. electricity, ableandwilling they would needtobidjointlywithanother party arevendors themselves not inthebusinessofoperatingplantsandselling crisis thatbecameapparent before thebiddeadline).Sincenuclearplant (even challengetopotential withoutthecredit bidders presented asignificant requirement themforatleast15 tooperate torecoup years thatinvestment, large investmentThe very involved inbuildingseveral nuclearunits,andthe ◗ • Electricity initiatives, and facilitate sufficient expansion ingeneration expansion andthegrid, initiatives, andfacilitatesufficient Monitor electricityconsumption growth, withafocusondemand-side , oranother domesticutilitytoinvest inthenuclear

◗ • • • • • • Nuclear power independence. development andpromotional activities,andensure regulatory Separate functionsofTAEK theregulatory from itsnuclearresearch, resources. for radioactive skilledhuman waste management andensuring sufficient thenuclearprogramme,to support includingdeveloping detailedplans Continue to take steps to establish therequired institutions andfacilities nuclearplants. and operation offurther nuclear power plant,andconsideralternative modelsfortheownership Review thereasons forthelimitedint thepossibilitiestoand examine take into accountCO Further implement thecost-based pricingmechanism to intheyears come renewable electricity. while ensuringincreased to integrate system flexibility alarger share of efficiency standards fornewplants. efficiency plants,and for newinvestmentsfor existing ingeneration, andsethigh andenvironmental performance gainsinefficiency ensuring effective aclearframeworkDefine fort perspective. by limitingandscrutinisingTETAS Ensure openingoftheelectricitywholesalemarket theeffective notably he privatisationofthegeneration assets, , ’s role inamedium-to long-term ’s erest intherecent tenderfora 2 cost. 127

ENERGY RESEARCHANDDEVELOPMENT research policydevelopment process. Source: Technology Development FoundationofTurkey. TPE- Turkish Institute Patent TIK –Turkish Institute Statistical andTrade ofIndustry Ministry STB- ofNational Education MEB- Ministry Development Organisation KOSGEB- SmallandMediumSizedEnterprises DTM- Under-Secretariat forForeign Trade DPT- PlanningOrganisation State Supreme CouncilofScienceandTechnologyBTYK- andTechnologicalthe Scientific Research CouncilofTu Organisation and (DPT),theSupreme CouncilofScienceandTechnology (BTYK) Grand National AssemblyofTurkey, Planning theState theCouncilofMinisters, The highest-level decisionsonscienceandresearch policyare madeby the policies, providing for theprivatesectorby perspective eliminatingthe of theministries’ andremaining publicinstitutions’ activitiesregarding those including scienceandresearch, co-ordinatingandguidingthe implementations determination oftheeconomic, socialandculturalpoliciestargets DPT isresponsible forproviding forthegovernment consultation inthe TÜBI . TAK are thetwo mainresponsible institutionsregarding thescienceand MEB KOSGEB TSE Turkish NationalScienceand Research Structure STB Prime Minister TÜRKAK TPE TIK RTD Institutions RTD TÜBITAK 33 33 DTM YÖK- HigherEducationCouncil TÜRKAK- Turkish Board Accreditation Research CouncilofTurkey TÜBI TurkishTÜBA- Academy ofSciences of Turkey TechnologyTTGV- Development Foundation TurkishTSE- Institution Standards Exchange ofTurkey TOBB- Union andCommodity ofChambers TOBB . TAK- andTechnological TheScientific DPT BTYK rkey (TÜBI TTGV . TAK). DPT and TAK). DPTand TÜBA Universities YÖK 131 10 © IEA/OECD, 2010 132 Furthermore, TÜBI Furthermore, for theprivatesector. programmesdevelops forthepublicsectorandincentive support programmes research centres andinstitutes, policies.Italsoestablishes and technology andconsultsthegovernment ondeterminationofscience for theBTYK developing programmes andprojects forthispurpose.Itactsasthesecretariat area outR&Dactivitiesinthescienceandtechnology andfor and carrying has thefollowing objectives: programme by isco-ordinated TÜBI Technology Foresight Programme 2023Programme). (theVision The Turkey’s R&Dpolicyisguidedby long-term theNational Researchand TÜBI of macro-economic andsectoralpoliciestargets. regarding theframework by themediumtolongterm defining uncertainties 2005-2010. was Thestrategy developed by TÜBI policy islaidoutintheNational ScienceandTechnology Strategy fortheyears the seven-year National R&D medium-term Development Plans.Furthermore, On amacro level, Turkey’s nationalR&Dpolicyand prioritiesare determinedin science andtechnology. andtakesof researchers. responsibility co-operationon fortheinternational toincrease thenumber public-private sectorco-operation,provides support in several areas. The BTYK has agreed on seven primary objectives: hasagreed onseven primary in several areas. TheBTYK forscienceandtechnology research areas,specific butincludesgeneralsupport plandoesnot in2005.Theimplementation mention approved by theBTYK organisations. andanaccompanying Thestrategy planwere implementation the relevant publicagencies,academia,privatesectorandnon-governmental ● ● ● ● ● ● ● ● ● building long-term science and technology objectives scienceandtechnology forTurkey;building long-term increase awareness scienceandtechnology andculture; previous R&Doutcomes; adynamicmechanismtoadoptR&Dpoliciesbased onthe establishing andstrengthen connections. nationalandinternational establish improve theresearch potential andinfrastructure; oftheprivatesector; strengthen performance thescienceandtechnology management; ofnationalscienceandtechnology increase effectiveness forhigh-quality research;provide andgoal-oriented support trainanddevelopeducate, more scientists; . TAK co-ordinating,promoting, isresponsiblemonitoring forsupporting, . TAK develops programmes toimprove theuniversity- . TAK andcovers theperiod2003-2023.It . TAK, incollaborationwith

raising theR&D expenditure to2%ofGDPby 2023. Thismechanismwillhelpachieve thegoalof forallcollaborators. breaks tax expenses. Themechanismalso allows formulti-company co-operation,with ofupto25%(upalimit ofTRL250000)theirR&Dinvestment support research companies employing may applyfor atleast25 R&D personnel onenergy R&Dinpriorityareas ofenergy policy.partnerships Independent ofEnergy andNatural Resourcesencouragesprivate-public of theMinistry payments Additionally, R&Dfunding mechanism years. forfive thedraft and50%socialsecurity break forR&Dpersonnel as wellupto90%tax break tax approved R&Dactivities, includingapartial alaw in2008tosupport To provide incentives forprivate-sectorenergy R&D,the Turkish Parliament andnew andrenewable energy.on energy efficiency Law alsoobligesTÜBI Efficiency manner. reaching inacost-effective thesetargets The2007facilitate Energy are neededto in renewable electricitycapacityby 2023andR&Defforts Electricity Market andSecurityofSupplyStrategy outlineslarge increases throughthat willhave R&D.Forexample, tobeachieved, the2009 inpart, The current energy policyimplies demandforenergyadvancements technology 2023 Programme whosepriorityareas forenergyR&Dare: technology Energy andnaturalresources are amongtheareas includedintheVision ● ● ● ● ● ● ● ● ● ● ● ● nuclear energy hydrogen andfuelcellstheirapplications hydropower plants(miniandmicro) control forpower technologies systems inindustry energy efficiency andrenewable energy inbuildings energy efficiency clean coal energy storage solar energy wind energy forsocioeconomicdevelopment. ofscienceandtechnology importance andcreatinga wholespectrumofstakeholders publicawareness ofthe by policies,whilebeingsupported formulating scienceandtechnology andareasdetermining prioritytechnologies forR&D; . TAK togive priorityto fundingR&Dprojects 133

© IEA/OECD, 2010 RESEARCH COUNCILOFTURKEY) TÜBI KEY ORGANISATIONS ANDSELECTEDPROJECTS 134 . Examples ofcurrent energy R&Dprojects includecoalgasification, CO including second-generationbiofuels. storage, electricvehicle power technologies, electronics andfueltechnologies, fuel cells,hydrogen, combustion,gasification andgas cleaning,energy Electronic Technologies. TheInstitute’s appliedresearch projects focuson Energy Technologies; Fuel Technologies; Vehicle Technologies; andPower businessunits:Advanced TheEnergyhasfourstrategic Institute time staff. Centre (TÜBI other publicandprivateorganisations. including: Ithasabroad portfolio, institutions. TÜBI andresearch represent Boardwhosemembers industry universities, Scientific East Technical University andTurkish Petroleum Company are theprimary in2007 andithasabudgetproject ofTRL 500000.TheMiddle was started inTurkey. oilfields formations, suchassalineformations andexhausted The 2010. Thisstudyinvestigates thepossiblestoragelocationsindeepgeological ofEnergy andNatural tobecompleted Resourcesis expected in Ministry A pre-feasibility by studyonunderground the carbonstoragesupported of 2011. electricity generation.Thecentre tobeginoperationby isexpected theend the environmental burden ofcoalburningandimprove in energy efficiency to lendZorluEnergy TRL9millionforconstructinganR&Dcentre toreduce coal gasification, TÜBI andfuelproduction from biomassandcoalblends.On storage andtransport, TÜBI in1963,Established TÜBI companies byR&Dprogrammes.supplemented withseparate state-owned byMost publicR&Dinvestment TÜBI isundertaken The aimistoreduce theenvironmental impact ofcoaluse.TÜBI Zorlu Energy onaproject tostudyelectricitygenerationfrom gasified coal. TAK (THESCIENTIFICANDTECHNOLOGICAL ● ● ● ● ● conducting research areas; onstrategic supporting undergraduate andgraduate studentsthrough scholarships. supporting organising scienceandsociety activities;and journals,popularsciencemagazinespublishing scientific andbooks; programmesdeveloping forpublicandprivatesectors; support . TAK’s energy R&Dactivitiesare carriedoutat itsMarmaraResearch . TAK-MAM), where theEnergyhasmoreTAK-MAM), Institute than100 full- . TAK fundsresearch projects and carriedoutinuniversities . TAK has entered into a public-private partnership with TAK hasentered intoapublic-privatepartnership . TAK isanautonomousinstitutiongoverned by a . TAK andtheuniversities, . TAK expects 2

expected toendin2013.expected Itsmaingoalsare thefollowing: inJune2009andis Theproject hasstarted electricity generationsystems. gas conditioningandseparation,liquid andheat fuelproduction systems, developing onfuelfeeding, gasification, gas integratedtechnologies cleaning, andcleanliquid fuelsfrom theseresources. Itwillfocuson efficient the project aimstodevelop apilot forproducing facility more economical, hasabundantcoalandforest resources, and and biomassblends.Thecountry relevant inTurkey. technologies local companies anddevisepoliciesprogrammes forthedevelopment of (competitiveworld, identifytheneeds,gaps for advantage) andopportunities (equipment in the energy andtechnology) sector, inthe toevaluatethestatus R&D Platform”.ThePlatformaimstocreate inventories ofexistingcapacity in2010Industrial Zone,TTGV established the“LocalEnergy Technologies ofEnergy andNatural Resources,EÜASthe Ministry andrenewable energy are amongitspriorities.Togetherefficiency with inseveral projects. nationalandinternational Energy it alsoparticipates mechanismsand competitiveness. support TTGV hasatitsdisposaldifferent innovation capacityinTurkish inordertoimprove industry itsinternational TTGV was foundedin1991 thedevelopment oftechnological tosupport TÜBI same subjectin2009. and anumberofother onthe publicandprivateentitieshave issuedreports from thisproject, intheproject. KaradenizTechnical Apart partners University which isimplemented undertheco-ordinationofTUBI Research projects are mostlyfundedviat by severalBasic andappliedresearch universities. onenergy isundertaken universities. ResearchProgrammes,Scientific whichare fundedby theindividual ● ● ● ● liquid fuelproduction from coalandbiomasssyngas; CO efficiency; heat production duringliquid andrecovery fuelproduction toenhance application ofcoalandbiomasssyngas topower generation; . TAK anR&Dproject hasalsoinitiated onpreparing liquid fuelsfrom coal 2 capture inordertoincrease liquid fuelproduction efficiency. he Turkish ResearchArea Programme, , and OSTIM Organised andOSTIM . TAK, anduniversities’ 135

© IEA/OECD, 2010 FUNDING OFENERGYANDNATURALMINISTRY RESOURCES(MENR) ENTERPRISES (TKI GENERAL DIRECTORATE OFTURKISHCOAL 136 technologies. Theprogrammetechnologies. budget for2010 isUSD3.5million. andcleanercoal private-sector research companies todevelop more efficient objective ofthisprogramme isfundingresearch and institutions,universities USD 7.5 millionin2008 (seeFigure USD3million 34).Outofthat total, publicspendingonenergy RD&DhasincreasedSince 2004, toreach national energy sector. ofthe thoserelevant tothesustainability energy policygoals,inparticular synergies infostering programme tocreate technology-oriented isexpected centres andtheirrole andpolicymakers. inbridginguniversities TheENAR 2009 to2015. development oftechnology Theplanhighlightstheimportance institutionsofMENRfrom the spendingonR&Dby therelated andaffiliated gradually toTRL50millionby 2014. Thisplanalsoincludesavisiontodouble thatthebudgetprogramme indicates oftheENAR willincrease ministry 2010 isUSD1.5 million.Theins research onenergy conversion, transmission anddistribution.Itsbudget for renewable energy Theprogramme andenergy efficiency. prioritiesinclude new andinnovative technologies equipment, of especiallyinthefields research todevelop andprivate-sectorresearch institutions,universities firms programmeENAR” in2008.Themainobjective ofthisprogramme isfunding ofEnergy andNatural the“Energy Resourcesinitiated Research- The Ministry TKI (USD 1million). the Hydrogen Production Technologies attheBogazici University Laboratory Technical attheIstanbul Research Laboratory University (USD500000),and at theHarranUniversity (USD500000),theHydro Electric Power Station attheGaziUniversity (USD1.5Laboratory million),the SolarEnergy Laboratory investmenttotal R&D includetheLignite exceeding USD5million.Others for photo-electronic biogas technologies, andfuelcells,with technologies Solar EnergyoftheEgeUniversity. Institute owns Theinstitute laboratories at theMiddleEastTechnical University andresearch laboratoriesatthe such infrastructures are theSolarEnergy ResearchCentre (USD7.5 million) large-scale research infrastructures onenergy Thelargest inuniversities. In additiontotheseprojects, PlanningOrganisation theState (DPT)isfunding . has initiated a“CleanCoalTechnologies” hasinitiated programme in2009.Themain . ) titutional strategic plan2010-titutional strategic 2014 ofthe

10 12 2 4 6 8 0 R&D: The following government bodiesprovide incentives for fundingorfinancial most IEAmembercountriesspentmore timesthatshare. thanten remains low inTurkey (seeFigure 35).In2008,itwas at0.001% ofGDP, while Compared toother developed countries,publicfundingfor energy R&D Sources: (public andprivate)forallR&Dto2%ofGDPby 2023from 0.7%in2007. by Thegovernment anincrease infinancing. planstoincreasefunding total 2023 Programme, several energy R&Dpriorities,issupported whichcontains Public spendingonenergytocontinuegrow, R&Disexpected astheVision on private-sectorspendingenergy R&D. USD 1.4 milliononhydrogen andfuelcells.There are nocomprehensive data was spentonfossilfuelsprojects, USD1.9 milliononrenewable energy and USD millionat2007pricesandexchangerates 9019 9219 9419 9619 9819 0020 0220 0420 0620 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 ● ● ● ofFinanceprovides reduction fortheR&Dexpenditures tax The Ministry The Technology Development FoundationofTurkey (TTGV) provides soft ofForeignSecretariat Trade. TÜBI by aratioof 40%. of privatefirms also provides support forcommercialisation projects also provides and fortechnological support developmentloans fortechnology (R&D)projects in theprivatesector. It OECD Paris, 2009 and country submission. OECDParis,2009andcountry OECD EconomicOutlook, . TAK provides grant fundsfortheprivatesectorwithUnder- Government RD&DSpendingonEnergy, 1990to2008 34 34

efficiency Energy Fossil fuels energy Renewable Nuclear storage Power and research Other tech./ Oil 137

© IEA/OECD, 2010 138 Figure 35 Government R&D Budgets in IEA Member Countries, 2008 0.78 Japan 0.27 0.67 Korea 0.40 0.44 Canada 0.27 0.40 Denmark 0.40 0.37 New Zealand 0.34 0.34 Switzerland 0.25 0.31 Sweden 0.30 0.30 United States Including 0.23 nuclear 0.24 Italy 0.19 0.20 Excluding Germany 0.13 nuclear 0.19 Norway 0.19 0.07 United Kingdom 0.05 0.09 Ireland 0.09 0.08 Spain 0.06 0.05 Hungary 0.05 0.02 Portugal 0.01 0.01 Turkey 0.01 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00

Per thousand units of GDP Data not available for Australia, Austria, Belgium, the Czech Republic, Finland, France, Greece, Luxembourg, the Netherlands, Poland and the Slovak Republic. Sources: OECD Economic Outlook, OECD Paris, 2009 and country submissions.

INTERNATIONAL COLLABORATION Energy Technology Programme Analysis Systems Modelling Hydrogen Advanced Fuel Cells Energy Photovoltaic Power Systems Storage Energy storage Bioenergy HybridandElectricVehicles Renewables BuildingsandCommunitySystems Transport sector Buildings sector Agreements: includingthefollowing IEAImplementing collaborativeinternational efforts, To augmentitsnationalR&Dframework, Turkey inseveral participates ● ● ● ● The Credit Fund Guarantee (KGF) provides onloanstoSMEsfor guarantees related R&Dprojects programme. withinitsENAR ofEnergy andNatural Resources providesThe Ministry fundingforenergy KOSGEB, provides (SMEs). fundsforsmallandmedium-sizedenterprises from TTGV andTÜBI isonprojectprivate sector. baseandDTM takes Thesupport consultation The Under-Secretariat ofForeign Trade (DTM) provides grant funds forthe ones. advanced includingenergy-related technologies, todevelop anew programme forcommercialisationof has alsostarted renewable energy, andcleanerenergy production. TTGV energy efficiency loanstocompanies of projects withimplementation inthefields soft Programme, TTGV provides itsEnvironmental Support supports.Through entrepreneurship, suchaspre-incubation, risk-sharing andstart-up facility collaterals while applying for soft loansfrom TTGV. whileapplyingforsoft collaterals with arecent agreement withTTGV, KGF companies forthe willsupport risk-sharing andlendingamongTurkishfacilitating Inaccordance banks. andTrade, ofIndustry throughThe Ministry itsboundedinstitution . TAK ontheselectionofprojects. 139

© IEA/OECD, 2010 140 Ongoing projects projectsfollowing undertheEUFP6andFP7: energy-related Turkey isrepresented intheseImplementing Agreements through theTÜBI FP7). TÜBI Framework Programmes forResearchandTechnological Development (FP6and Turkey inR&Dprojects underthesixthandseventh EU hasalsoparticipated national R&Dprojects R&Dprojects. aswellinternational and utilisation,aswellhydrogen economics.Thecentre hasitsown ongoing developing countries.Theareas ofwork includehydrogen production, storage applicationinindustrialdevelopmenttechnology globally, in inparticular advancing appliedR&Donhydrogen energy andstimulatinghydrogen energy ICHETfocuseson Organization inIstanbul, (UNIDO)andtheMENR.Located (ICHET), ajointinitiative oftheUnited Nations Industrial Development Turkey Centre isthehostofInternational forHydrogen Energy Technologies ofscienceandtechnology. inthefield co-operate Turkey agreements hasalsoentered intobilateral with19 countriesto Marmara ResearchCentre, themunicipalityofAnkara andseveral universities. TÜBI Completed projects (FP6) ● ● ● ● ● ● ● ● MC-WAP Fuel CellsforWater (FP6)Molten-Carbonate BorneApplications. Energy intheFieldsofHydrogen Institute Technologies. HYPROSTORE: Improving theS&TResearchCapacity ofTÜBI Solar Collectors. TERMISOL: New Low Emissivityand Long-LastingPaintsforCost-Effective natural gas asacatalyst. system NATURAL-HY: Preparing forthe hydrogen economy by usingtheexisting Europe. EnergyHelp theLarge-ScaleofDistributed Resourcesin Implementation that Will ofaEuropean Energy Distributed Partnership EU-DEEP: TheBirth Combined SolarThermionic-Thermoelectric Unit System. (FP7)EnhancedEnergy ProductionEPHESTUS ofHeatandElectricityby a REsidues. Gasificatıon (FP7)HighAddedValue from Materıals WasteTYGRE TYre EXtraction strategies. component degradation andstack andlifetime and MCFC catalyst ofCONTaminantsMCFC-CONTEX (FP6)Effects inbiogenousfuelson . TAK inthe MarmaraResearchCentre’s Energyhasparticipated Institute . TAK isTurkey’s organisation contact fortheFPparticipation. official . TAK MRC . TAK

activities that support thegovernment’s energy policy.activities that support Given thelimited toidentify R&D budget andthenumberofprojects andmadeagoodeffort R&D activitiesaswellplanning R&Dpolicy. Ithasbeenincreasing the TÜBI improve analysis. collectionandcost-effectiveness R&Ddata to accordingtoresults.strategies Thegovernment shouldenhanceefforts evaluations oftheoutcomesenergy R&Dandby updatingenergy R&D The IEAurges Turkey by institutingregular thefundingefficiently toallocate reallocating fundingfrom programmes thatare not delivering ontheirgoals. and from regularlyfound benefits evaluating outputsof R&D efforts inenergy R&Dexpenditure. Several IEAmember countrieshave efficiency forimproved R&Devaluation providesRegular andsystematic anopportunity public spendingonenergy R&D. average. TheIEAencouragesTurkey increase tocontinuesignificantly ofGDP remains wellbelowspending onenergy R&Dasapercentage IEA sincethelastin-depthreview.budget significantly However, Turkey’s public It iscommendablethatthegovernment hasbeenincreasing theenergy R&D energy R&D. goals willbesuccessfulthrough adequate designof fundingandstrategic andrenewableensure thatitsenergy low-carbon efficiency, energy policy Inparticular, Turkey collaborationefforts. activities andinternational should for prioritisation,basedonTurkey’s resource mix,policygoals,previous R&D environmental policypriorities.Itshouldassessthebestenergy technologies development anddemonstration(RD&D)isalignedwithenergy and Science andTechnology Strategy toensure thatenergyresearch, technology thegovernmentIn thenearterm, shouldrevisit the2005-2010 National totheenergycontribute policychallenges. the government tohave acoherent energyorprogramme R&Dstrategy to energy R&D policy. 2023Programme theVision Inthiscontext, canhelp to explore allpossiblemeanstorespond tothem.Onesuchmeans iseffective including onenergy securityandemissionstoair, andthegovernment needs Turkey energy andenvironment significant isfacing policychallenges, ● ● ● Energy. CostAssessmentSustainable CASES: Power Technologies. with Energy intheFieldsofIntegratedBiomassGasification Institute NETBIOCOF: IntegratedEuropean Network forBiomassCo-Firing. BIGPOWER: Improving oftheS&TResearchCapacityTÜBI . TAK isaunique organisation inTurkey, conductingresearch andfinancing . TAK MRC 141

© IEA/OECD, 2010 142 activities into international programmes.activities into international to continueintegrate,as muchaspossible,thenationalenergy R&D 2023Programme, Vision andtheIEArecommends Turkeywith thecountry’s collaboration. Turkey’s initiatives inmultilateral isconsistent participation Turkish tosuit theparticular technologies through international circumstances needtopromote ofthebestavailable the acquisition andadaptation efforts Turkey fortheforeseeable future. R&D willcontinuetobeatechnology-taker as hasclearbenefits, Suchparticipation as thoseoftheEUandIEA. Turkey research ininternational programmes, isactively such participating consideration. public resources for energy R&D, effective co-ordinationbetween TÜBI public resources forenergy R&D,effective clean coal technologies andCO clean coaltechnologies among IEAmembercountries,R&Doncleanerfossil fuels,inparticular considering itsnaturalandsocialconditionsaswell thecurrent interest where Turkey hasacompetitive needs.Forexample, orspecific advantage It isessentialtocontinuefocuspublicspendingon energy R&D inareas potential pitfall. encourage R&Dinvestment by privatised andcorporative entitiestoavoid this and anearlyvictim.Thegovernment willneedtoactively facilitate are often rush tocompetitiveness andproductivity improvements, R&Dexpenditures components oftheelectricityandgas following privatisations. sectors Inthe inR&Dthevarious Evidence from other afall-off countriesclearlyindicates process from R&Dtocommercialisationisnecessary. provide approaches throughout andsolutionsforeachstep specific thewhole recently beencompleted. Hence,comprehensive modelswhich support whoseR&Dprocessmechanisms. Thisisalsocriticalfortechnologies has the economicalvalue creation process through appropriate commercialisation to shouldbetransmitted private-sector research anduniversities institutes issue. Inthisregard, the outcomesofjointR&Dprojects implemented by R&D projects isacritical Commercialisation oftheoutcomessupported new technology. the resources available forenergy R&D,butalsoforthecommercialisationof would helpincrease R&D outcomes.Expandingpublic-privatepartnerships incommercialising forR&Dactivitiesandassistance mechanisms andfinancing Goalsshouldincludegreaterand universities. sharingofinformation,policy withpublic-sectorresearch institutes inpartnership sector participation toencouragegreater private- shouldbeintensified However, theseefforts by government policies. inpart is becomingmore intensive, supported energy R&D.Itispositive thatco-operationbetween TÜBI Turkey from would improving alsobenefit theoverall levels ofprivate-sector needstobeensured. and energy policyplanningoffices 2 capture andstorage,shouldbe apriority . TAK andindustry . TAK

The government ofTurkey should: andelectricitynetwork-related IEAImplementingefficiency Agreements. Turkey toexpandnationalresearch capabilitiesintheseareas by joiningenergy andcontrol theIEAencourages forpower technologies systems, efficiency 2023ProgrammeGiven thatthegoalsofVision alsoincludeenergy ◗ ◗ ◗ ◗ ◗ ◗ Revisit itsmedium-termR&Dplaninthe Continue to integrate, asmuch aspossible,thenationalenergy R&Dactivities Focus onthedevelopment of energy technologies andtheirearly andcost- Consider developing comprehensive modelsthatcover thewhole support withtheprivatesector through increasedExpand partnerships useofpublic- Continue to significantly increase publicspendingonenergy R&Dto alignit collaborative efforts such astheIEAImplementing Agreements.collaborative efforts andelectricity capabilities inenergy efficiency into internationalprogrammes; nationalresearch expand inparticular, need, such ascleanerfossilfuel,cleancoalandCCS-related technologies. deploymenteffective inareas where there isaclearcompetitive advantage or innovation spectrumfrom R&Dto commercialisation. forenergy R&D. private partnerships and updateenergy R&Dstrategies according to results. by instituting regularefficiently evaluationsoftheoutcomesenergy R&D; more closely withthat of other IEAmembercountries;allocatethefunding collaboration efforts. resource mix,policygoals,previous R&Dactivitiesandinternational the best energy technologies forprioritisationonthebasisofTurkey’s (RD&D) isalignedwithenergy andenvironmental policypriorities;assess ensure thatenergy technology research, development anddemonstration context ofitslong-termpolicyto context network-related international 143

Finally, grateful toMr. isparticularly BoraS theteam Turkey throughout thereview totheOECDforhiskindassistance process. Norway ofPetroleum andEnergy,Ministry Mr. Erik Just Olsen United ofState, States Department leader) (team Mr. Stephen J.Gallogly were: oftheteam The members for thewholereview process. his professionalism helpfulnessdisplayed person andunfailing asthecontact team alsowishestothankMr.team ZaferAtes and Mr. CelalYesilyurt, for their helpinpreparing andguidingthevisit.The Ms.SinemÇaynak ofEnergy andNatural Resources,inparticular the Ministry of wishes tothankDeputyDirector-General NilgunAcikalin andother staff themoncurrent TurkishBudak Dilliinbriefing energy policyissues.Theteam during thevisit.They alsowishtoexpress theirgratitude toDirector-General YusufUnder-Secretary Yazar engagement fortheirpersonal andsupport SelahattinÇimenandDeputy to express theirgratitude toUnder-Secretary toasuccessfulandproductivecontributed review. wish members Theteam ofthemany peopletheyco-operation andhospitality met whogreatly other organisations. are grateful members fortheopenness, Theteam interest groups energy suppliers, andvariousmet with government officials, The in-depthreview Ankara visited from team 6to10 April2009.Theteam The reviews by conducted theIEA. June 1993 meeting heldinParis,provide theevaluationforin-depth criteria The of the IEA, which were adopted by the IEA ministers at their 4 attheir4 whichwere byShared adopted theIEAministers GoalsoftheIEA, Shared Goalsare set outinAnnexC. Trade, Spain ofIndustry, TourismMinistry and Gálvez Mr. Antonio Moreno-Torres Planning,France and Country TownDevelopment andSustainable forEcology, Ministry Sustainable Mr. Delannoy Max-André , from thePermanent Delegation of , ekip Güray ofMENRfor ANNEX 147 A © IEA/OECD, 2010 ORGANISATIONS VISITED 148 Competition Authority of preparation. stages Consoli provided MarilynFerrishelpedinthefinal editorialassistance. managedtheproduction process. Viviane Jane Barbière andMadeleineBarry Treanton MurielCustodio, onstatistics. andAlexBlackburnprovided support SadinpreparedMonica Petit, Karen thefigures. Georg BussmannandBertrand Nguyen, Jungwook ParkandSamanthaÖlz. ShinjiFujino,Ulrich Benterbusch, RichardBaron, RebeccaGaghen, Francois Brian Ricketts andAkihiro Tonai. Helpfulcommentswere by alsocontributed Buchner, Anne-SophieCorbeau,IanCronshaw, Tom Kerr, CarriePottinger, IEA colleagueshave contributions,includingBarbara provided important Taylorprepared by Martin from theOECDNuclear Energy Agency. Many other were prepared Gould,andthesectiononnuclearenergy, by Tim whichwas 5,which 7oncoalandthesectionoilpipelinesinChapter of Chapter Miika Tommila withtheexception thereport, managedthereview anddrafted EnergyInternational Agency Mr. TimGould EnergyInternational Agency Mr. IanCronshaw Industry, Japan ofEconomy,Ministry Trade and Mr. Masatoshi Shinagawa Trade, Spain ofIndustry, TourismMinistry and Mr. Antonio Moreno-Torres Gálvez ● ● ● ● ● ● ● Energy Market Regulatory Authority (EMRA, TurkishEnergy Authority(EMRA, Market Regulatory abbreviation: EPDK) Ministry ofEnvironment andForestry Ministry ofEnergy andNatural Resources(MENR,TurkishMinistry abbreviation: ETKB) Hydroelectricity Power Plant IndustriesandBusinessmenAssociation(HESIAD) General Directorate forMineralResearchandExploration (MTA) Electricity GenerationCorporation(EÜAS The ElectricalPower andDevelopment Administration(EI ResourcesSurvey International EnergyInternational Agency Mr. Miika Tommila EnergyInternational Agency Mr. ShinjiFujino European Commission Mr. OlivierSilla Industry, Japan ofEconomy,Ministry Trade and Mr. Masatoshi Shinagawa , ) . E) E)

● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Petroleum PlatformAssociation(PETFORM) Turkish (TTK) HardCoalEnterprises Turkish ElectricityTransmission Corporation(TEI Petroleum Industry Association(PETDER) Petroleum Industry Turkish ElectricityWholesaleandTrading Company (TETAS Ministry of Foreign Affairs (MFA) ofForeign Affairs Ministry World Energy Council-Turkish National (DEK-TMK) Committee World Bank Ankara Office Wind Power PlantIndustriesandBusinessmenAssociation (RESIAD) The Union andCommodityExchanges ofTurkey ofChambers (TOBB) Under-Secretariat ofTreasury Turkish Petroleum Corporation(TPAO) Turkish ElectricityDistribution Company (TEDAS Turkish (TKI) CoalEnterprises Turkish Atomic Energy Authority(TAEK) andTechnicalThe Scientific ResearchCouncilofTurkey (TÜBI Privatisation Administration Petroleum PipelineCorporation(BOTAS Natural GasDistributionCompanies Association(GAZBI ofTransport andCommunication Ministry State PlanningOrganisationState (DPT) , ) . , AS ) , ) . R) , ) . TAK) 149

© IEA/OECD, 2010 © IEA/OECD, 2010 oa –0.030.260.390.420.86 0.010.07 –0.000.030.72 – 1.99 0.222.663.403.082.86 9.42 1.15 1.011.054.81 0.050.430.68 .. – – 8.23 0.10 –1.04 0.21 –1.08 0.16 0.77 Electricity Trade Solar 0.04 0.51 Geothermal Wind 0.08 Hydro –0.83 1.400.07 –0.020.330.06 Nuclear 1.40 – –0.13 –0.10 22.13 0.1151.98 0.29 –0.03 12.05 2.6829.7830.60 ––0.06 – 151.76 70.57 TOTAL SUPPLY (TPES) 23.13 37.6230.54 9.6833.48 35.9860.23 Net 73.81 – TOTAL STOCK CHANGES 27.49 8.7129.54 20.9428.3325.9355.56 Imports Imports – 59.67 0.03 –0.030.260.390.420.86 1.88 0.84 1.290.015.410.07 –0.000.030.72 6.09 6.53 0.36 49.98 – Imports Electricity Exports – –0.13 0.67 27.77 Int'lMarineandAviation Bunkers Net 2.68 Net 8.72 Gas 1.99 1.15 0.222.663.403.082.869.42 1.011.054.81 0.01 0.050.430.68 Imports Imports 12.05 – Exports – Imports 4.21 22.13 8.23 Exports 9.31 Oil 0.01 Net 29.76 Imports 11.72 4.21 Coal 30.24 TOTAL NETIMPORTS Exports 9.3114.64 Imports Solar 51.31 Geothermal 11.7212.86 Wind Hydro 14.64 43.50 Nuclear 12.86 43.50 ENERGY BALANCESANDKEYSTATISTICAL DATA

Comb. Renewables &Waste Gas Oil Peat Coal TOTAL PRODUCTION Nuclear Comb. Renewables&Waste Gas Oil Peat Coal Shares (%) Comb. Renewables &Waste Gas Oil Peat Coal Forecasts are basedon the2006/07 submission. As ofMay 2010, Turkey planstorevise its forecasts inthenearfuture. 0 isnegligible. -isnil...not available Electricity Solar Geothermal Trade Wind Hydro SUPPLY 3

1 1 .5 7.216.51 6.455.365.064.883.93 7.216.51 6.45 5.365.064.883.93 24.36 52.76 76.35 84.38 100.01 98.55 217.75 55 58 58 39 27.2715.53 25.8225.8623.9329.0365.99 12.48 23.4030.40 28.7530.7029.5556.25 197319902007 2000200520082020 .936 .322 2.11 2.133.613.59 2.732.230.69 65 37 . 63 . 49 1.8 4.9 5.1 6.3 8.5 13.7 26.5 5.21 12.37 12.49 10.81 14.79 37.10 16.68 51.334.1 44.439.830.730.025.8 5.15 16.9122.91 22.7929.3929.4680.60 21.1 27.0 37.0 32.030.0 29.429.9 0.9 3.8 3.5 4.0 3.10.9 3.83.54.0 2.94.3 0.2 0.8 0.9 1.2 1.0 1.2 2.2 – 0.17– 0.53 0.74 0.74 0.84 0.23 541. 27.016.5 30.430.623.7 5.4 – 1.40 –0.13 –0.10 0.29–0.03 – –0.06 28 26 27 04 30.18 51.5412.63 2.86 22.79 30.42 – – – – 3.8 – – – 0.1– 0.30.5 0.4 – – 0.1 0.3 01 . 01–. – 0.6 – 0.4 –0.1 –0.1 – –0.1 –0.30 –0.92 –2.14–0.30 –0.92 –1.98 –1.96 –4.67 ANNEX Unit: Mtoe Unit: 151 B © IEA/OECD, 2010 152 TRANSPORT Heat Electricity Solar Geothermal Comb. Renewables & – Waste ob eeals&Wse 5. 4. 2. 1. 1. 1. 7.2 13.2 – 1.10.11.0 –0.70.90.8 16.1 19.5 27.727.4 21.329.3 17.3 16.8 16.42.1 0.42.73.42.92.88.3 28.3 – 11.3 17.5 8.89.08.9 42.0 18.5 14.4 – 0.170.61 –0.020.260.29 57.6 7.411.49Heat 0.294.225.786.92 17.44 Electricity 2.6 Solar 1.010.91 0.050.360.620.93 4.48 Geothermal Comb. Renewables&Waste Gas 0.3 Oil Peat Coal Shares (%) Heat Electricity Solar 8.7 Geothermal .. 1.031.02 –0.390.85 – 0.3 – 0.01 0.10 0.12 0.13 0.13 0.26 6.15 0.552.353.965.226.22 19.59 18.5 – Gas 0.1 Oil Peat Coal Shares (%) 13.6 Heat Electricity Solar Geothermal 21.1 .. 1.031.02 –0.390.85 – –0.030.260.390.420.86 TOTAL INDUSTRY Heat 1.010.91 0.050.360.620.934.48 24.7 22.3 Coal Shares (%) Heat Electricity 0.85 Solar Geothermal 20.6 32.1 3.87 32.1 26.7 8.25 11.06 20.5 13.14 13.71 37.37 TOTAL OTHERSECTORS Comb. Renewables &Waste Gas Oil 2.59 Peat Coal a 00 .5 3.119.97 0.056.759.59 0.04 11.12 3.11 5.026.25 5.206.228.92 5.84 – 7.81 1.272.47 3.002.022.756.66 Comb. Renewables &Waste Gas Oil Peat Coal Forecasts are basedonthe2006/07 submission.Asof May 2010, Turkey plans torevise itsforecasts inthenear future. 197319902007 200020052008 2020 Comb. Renewables &Waste Coal 2.93 TFC 19.86 Gas 0.04 Gas 0.04 Oil Peat Gas Oil Peat Electricity 4.3 Solar Geothermal Comb. Renewables&Waste FINAL CONSUMPTION BY SECTOR DEMAND 2

5 12 17.14 11.2027.3531.03 22.83 35.9354.30 1 1 1 .5 7.214.76 6.456.465.324.983.93 – 7.21 6.45 6.465.325.004.823.93 .8 .2 11.76 9.22 12.43 15.95 15.06 29.37 4.38 .8 13.714.28 23.2625.6529.5023.3879.59 .006 .6 3.191.760.670.00 3.923.46 13.65 48.0 50.845.239.936.536.830.7 044. 54 31.2 27.515.345.160.4 35.423.9 38.126.6 32.838.032.226.242.6 9.54 20.3726.13 26.10 27.95 27.39 50.10 25 80 12 . 65 . 2.4 6.5 6.5 8.1 11.2 18.0 32.5 14.7 18.8 18.7 16.417.2 18.3 25.6 12.9 17.2 17.0 20.3 20.8 26.6 24.6 1.148.27 4.508.83 11.23 6.12 33.93 . 18 8.515.417.8 18.4 15.2 1.8 0.2 0.2 0.9 1.10.2 0.9 1.4 1.2 1.4 2.7 –17333543 .. 1.7 – 3.33.54.3 – – 0.1– 0.40.50.3 – .. – 0.7 1.3 1.3 1.4 – – 0.1– 0.50.6 – – – – 40.07 0.72 7.52 6.18 4.9 9.6 57.85 10.85 8.23 4.91 14.3 7.6 65.43 10.05 10.74 8.01 16.9 12.5 76.48 14.05 13.98 13.3 7.05 17.2 74.38 12.78 13.23 6.44 6.44 18.4 14.8 Unit: Mtoe Unit: 163.26 24.79 41.73 12.17 22.9 17.2

© IEA/OECD, 2010 Nuclear Comb. Renewables&Waste Gas Oil Peat Other Transformation 1.50 3.17 1.50 1.781.74 1.75 1.72 2.83 Own UseandLosses Other Transformation Per Capita TPES Per Capita Energy Production/TPES Energy–related CO TFC10Per Capita CO TFC/GDP Please note: Rounding may cause totals to differ from thesumof the elements. Please note: Rounding may todiffer causetotals Forecasts are basedonthe2006/07 submission.AsofMay 2010, Turkey planstorevise itsforecasts inthenearfuture. Electricity andHeatGeneration of which: TOTAL Solar LOSSES Geothermal Wind Hydro Coal Output Shares (%) gross) (TWh OUTPUT (Mtoe) INPUT (Mtoe)

Coal TPES 197319902007 2000200520082020 GENERATION ELECTRICITY Statistical Differences Oil Supply/GDP Hydro 25.7 Nuclear Comb. Gas – Oil Renewables 3.1–1.0–1.8 –0.7–3.8–2.9–3.5 Peat & Waste Wind TPES/GDP Population (millions) GDP (billion2000USD) rwhi h PSGPRto 08 . 01 24 . –. 1.3 –2.2 2.9 –2.4 0.1 0.7 –0.8 Growth intheTFC/GDPRatio Growth intheTPES/GDPRatio GDP Net Energy Electricity Oil TFC Production Consumption Solar Imports Geothermal GROWTH RATESGROWTH (%peryear) ENERGY TRANSFORMATION ANDLOSSES DEMAND INDICATORS 2 Emissionsfrom Bunkers (MtCO 9

10 9 0.14 0.64 2 Emissions(MtCO 8

6 7 .0 5.8311.53 11.99 1.70 16.32 17.55 43.23 2 ) 0.4 ) 6.1 0.9 2.86.55.9 14.0 2 ) 11 5. 169 0. 264 6. 234 567.5 263.4 265.0 216.4 200.6 126.9 52.4 73–79 79–90 90–00 00–05 05–0707–0873–79 79–9090–0000–0508–20 24 5.4 2.2 6.6 9.6 9.2 483.24 198.42 191.56 161.96 124.92 57.54 12.43 197319902007 2000200520082020 .0 .204 .0–.1–.3 – 1.120.30 0.450.40 –0.11 –0.83 80 5.2 42 6.8 02 7.8 83.70 71.08 70.26 68.58 64.26 55.12 38.07 2.77 10.782.7726.77 22.6633.8335.63 84.79 20.9 40.2 24.7 24.4 18.7 16.8 22.7 .7 .5 07 1.3 64 1.6 41.56 17.06 16.47 13.93 10.74 4.95 1.07 1.004.74 2.57 4.81 5.74 5.57 8.43 79 159 265 330 326 359 714.77 375.96 372.61 333.03 266.56 185.95 87.98 613. 062. 27.926.135.129.1 30.626.7 33.2 .9 11.574.19 18.05 18.55 23.63 25.00 54.49 04 03 . –. 23 34 1.2 –3.4 2.3 –2.0 0.1 –0.3 –0.4 51.47.51.3 6.93.43.8 11.37.96.1 8.2 9.04.38.7 .4 .9 .4 .8 .7 .0 0.30 0.30 0.27 0.28 0.34 0.49 0.64 0.28 0.27 0.28 0.290.250.26 0.31 .2 .3 .0 .5 .9 .5 1.95 1.05 1.09 0.95 0.90 0.73 0.52 0.23 0.21 0.22 0.20 0.23 3.7 5.23.82.08.9 –1.5 6.8 3.8 19.7 4.78.02.09.7 12.7 3.0 4.22.7 –1.1 3.4 –3.7 5.5 4.5 3.74.6 5.8 0.95.5 5.0 5.5 3.15.0 5.5 –1.8 6.7 –6.9 6.0 . – . 01 . 01 – 0.1 0.1 0.1 0.2 – 1.6 1.9 3.6 0.0 7.1–1.5 6.86.4 4.13.1 9.0 –0.1 13.5 0.3 8.7 4.18.1 4.33.72.5 –2.8 6.8 17.7 37.034.5– 45.349.649.7 – 6.5 – – – 0.2 0.4 1.7 – 10.8 – 149.0 135.5 – 21.0 –2. . . –6.2 – 25.1 8.04.4 – – 0.1 0.1 0.1 0.1 0.1 0.1 0.96 0.13 7.6 – 16.0 0.11 1.19 2.9 12.5 0.09 1.23 5.1 15.5 –4.8 0.08 1.42 –0.8 0.08 –7.2 1.39 Unit: Mtoe Unit: 0.08 2.60 10.4 153 4.6

© IEA/OECD, 2010 AND KEYSTATISTICAL DATA FOOTNOTES TOENERGYBALANCES 154 11. “Energy-related CO Toe perperson. 10. Toe at2000pricesandexchange rates. perthousand USdollars 9. includelarge statistical on“losses”forforecast often years Data 8. Lossesarisingintheproduction ofelectricityandheatatmainactivity 7. Inputs toelectricitygenerationincludeinputs toelectricityandCHP 6. agriculture, includesresidential, commercial,publicservices, OtherSectors 5. includesnon-energy use. Industry 4. Total supplyofelectricityrepresents net trade.Anegative numberinthe 3. Excludes marinebunkers aviation international andinternational 2. Combustiblerenewables andwaste comprises solidbiomass,liquid 1. losses. ontransformationgainsand mostlydonot real reflect and expectations betweensupplyanddemand covering expected differences differences hydro andwind. approximately 33%fornuclear, 10% forgeothermal, and100% for of generation, theoretical lossesare shown basedonplantefficiencies producer Fornon-fossil-fuelelectricity utilitiesandautoproducers. onlytoelectricitygeneration. plants. Outputrefers sectors. forestry, andother non-specified fishing are greater thanimports. share thatexports ofTPESindicates bunkers. andmay not becomparablesurveys between countries. basedonpartial biomass, biogas are often andindustrialwaste. Data calculated using the IPCC/OECD emission factors and methodology. usingtheIPCC/OECD emissionfactors calculated coal emissionsare supplyprojections basedonproduct-specific andare toforecastuse for2008andapplying this factor energy supply. Future for oilandgas are derived by calculating theratioofemissionstoenergy aviation bunkers are not Projected emissions includedin nationaltotals. with theIPCCmethodology, emissionsfrom marineand international Sectoral Approach from the 2 emissions”have I usingtheIPCCTier beenestimated Revised 1996 IPCCGuidelines . Inaccordance

* Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland,France, Australia,Austria, Belgium, Canada,theCzechRepublic,Denmark, Germany, * United States. Poland, theSlovak Portugal, Republic,Spain,Sweden,Switzerland,Turkey, theUnited Kingdom,the Greece, Hungary, Ireland, Italy, Japan,Korea, Luxembourg, theNetherlands, New Zealand,Norway, emergencies. in responding jointlytooilsupply throughco–operate theAgency mechanisms andaction:IEAcountries some casesthisrequires collective emergencies. toenergy flexibly promptly and ability torespond shouldhave2. Energy systems countries asagroup. the energy ofIEA supplydiversity make contributionto asubstantial nuclearandhydro power,particularly as practicable.Non–fossil fuels, those fuelsshouldbeasdiverse andthesourcesof across sectors thefuelsusedwithin and security: energyconditions forlonger–term sectorare basic within theenergy 1. the following goals: member countriestherefore aimtocreate apolicyframework with consistent Inordertosecure theirobjectives, encourage dialoguewithallparticipants. energy operationofinternational marketsseek topromote theeffective and ofincreasing globalsignificance inenergy. interdependence They therefore emphasis bybe givengovernments. particular IEAcountriesrecognise the thoughenergy securityandenvironmental protectionof departure, needto offree andopenmarketspolicies, theestablishment point isafundamental the well-beingoftheirpeopleandenvironment. Informulatingenergy economicdevelopment andto the fullestpossiblecontributiontosustainable oftheireconomiescanmakecreate conditionsinwhichtheenergy sectors EnergyThe membercountries*oftheInternational Agency(IEA)seekto Diversity, efficiency and flexibility andflexibility Diversity, efficiency the In IEA member countries wish to retain IEA membercountrieswish to retain sources isalsoapriority. Anumberof development ofeconomicnon–fossil use offossilfuelsisessential.The and developed. Cleanandefficient needtobeencouraged sources energy 4. practicable. the Polluter Pays Principlewhere shouldrespectinterventions energy consequences. Government decisions shouldtake accountofthe activities, justasenvironmental environmental impacts ofenergy should seektominimisetheadverse shared goals.Decision–makers central totheachievement ofthese provision are anduseofenergy 3. More environmentally acceptable acceptable environmentally More The environmentally sustainable sustainable The environmentally ANNEX 155 C © IEA/OECD, 2010 156 countries, should be encouraged. countries, shouldbeencouraged. co–operation withnon–member and participation including industry dissemination ofenergy technologies, co–operation inthedevelopment and broader energy policies.International policiesshouldcomplement technology the objectives outlinedabove. Energy a criticalcontributiontoachieving improved technologiesmake energy and market deployment ofnew and 6. opportunities. are neededtorealiseusers these by governments andallenergy to consumption. Strong efforts the energy cycle from production of atallstages energy efficiency forgreater opportunities significant manner.a cost–effective There are protection andenergy securityin can promote both environmental 5. Improved efficiency energy to make. contribution increasingly important Renewable sources willalsohave an energy doesnot emitcarbondioxide. becausenuclear safety standards, the future, atthehighestavailable and improve thenuclearoptionfor Continued research, development Continued research,

8. inprices. reflected production anduseshouldbe the environmental costsofenergy andpracticable, necessary extent social orindustrialgoals.To the below thecostsofsupplytopromote prices shouldnot beheldartificially markets Energy towork efficiently. 7. meeting inParis.) attheir4June1993IEA Ministers (The Shared Goalswere by adopted environmental objectives. achieve global energy securityand to necessary trade andconfidence to helppromote theinvestment, markets worldwide. Theseare needed and energy systems and flexible environmentally acceptable efficient, encourages thedevelopment of and information andunderstanding, helpstoimprovemarket participants 9. avoided. trade andinvestment shouldbe energy security. toenergy Distortions energy markets andto efficient framework forinvestment contribute Undistorted energy prices energy Undistorted andasecureFree and open trade Co–operation among all energy amongallenergy Co–operation enable

U European Union company energy services EÜAS EU ESCO Energy Authority Market Regulatory European Network ofTransmission for Operators System ENTSO-E EMRA PlanningOrganisation State EIE DPT CO F-gases F-gases C carboncapture andstorage combined-cycle gas turbine CO CCS Supreme CouncilofScienceandTechnology Baku-Tbilisi-Ceyhan crudeoilpipeline CCGT BTYK BTC billioncubicmetres BOTAS barrels perday BOT build-operate-transfer BOO build-own-operate bcm b/d quick andcentralreference formany oftheabbreviations used. provides a mention,thisglossary generally have outonfirst beenwritten Energy usedwithintheInternational Agency.of terms Whiletheseterms abbreviations andacronymsIn thisreport, are foranumber substituted 2 2 e carbondioxide equivalent carbondioxide -eq , a state-owned electricitygenerationcompany astate-owned , Petroleum Pipeline Corporation Electricity Administration Electrical Power andDevelopment ResourcesSurvey HFCs (hydrofluorocarbons); PFCs (perfluorocarbons); SF HFCs (hydrofluorocarbons); PFCs(perfluorocarbons); (sulphur hexafluoride) ANNEX 157 6

D © IEA/OECD, 2010 158 tonne Turkish Atomic Energy Authority TEAS TAEK t Hs greenhouse gases (CO gross domesticproduct GHGs GDP SO ofcurrency therate conversionpurchasing power parity: PPP megawatt-hour =1megawatt ϫ1hour, or1watt megawatt ofelectricity, or1watt x10 OECD milliontonnesofoilequivalent; seetoe MWh MemorandumofUnderstanding MW anisation forEconomicCo-operationand Org Mtoe ofEnergy andNatural Resources Ministry millioncubicmetres Mt million MoU liquefied naturalgas MENR mcm LNG L kilovolt, or1volt x10 kilotonne ofoilequivalent (undertheKyoto jointimplementation Protocol) kWh kV ktoe Change IntergovernmentalPanelonClimate kilow JI IPCC W gigawatt, or1watt ϫ10 GW 2 sulphur dioxide , Turkish Electricity Generation-Transmission Corporation. between different countries between different currencies, that equalises thepurchasingpower ofdifferent Development ϫ 1hour10 litre ϫ N 2 10 O,nitrous oxide; seeF-gases) att-hour =1kilowatt ϫ 3 tonnes estimates the differences inpricelevels thedifferences i.e. estimates 6 2 3 , carbondioxide; CH 9 1hour, or1watt ϫ 6 4 , methane; 1 hour 1hour

W terawatt, or1watt ϫ10 Turkish Corporation Petroleum Refinery Turkish HardCoalEnterprises TW andTechnical TheScientific ResearchCouncilofTurkey TechnologyTÜPRAS Development FoundationofTurkey operator transmission system TÜBITAK TTK TTGV energy supply primary total TSO Turkish Petroleum Corporation access third-party TRL Turkish TPES transfer ofoperatingrights TPAO TPA lira TOOR NCC United Nations Framework Convention Change onClimate UNFCCC terawatt-hour =1terawatt ϫ1hour, or1watt ϫ1hour TWh tonneofoilequivalent, as10 defined Turkish CoalEnterprises toe TKI between consumption final thedifference ofenergy; total TFC TETAS TEIAS TEDAS , , Turkish ElectricityTransmission Corporation. , Turkish ElectricityWholesaleandTrading Company Turkish ElectricityDistributionCompany. ϫ 10 sector usesandlosses useandother energy of electricityandsynthetic gas, refinery TPES andTFCconsistsofnet energy lossesintheproduction (a state-owned electricitywholesalecompany)(a state-owned 12 12 7 kcal 159