TURKEY 2005 Review INTERNATIONAL ENERGY AGENCY
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INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries TURKEY 2005 Review INTERNATIONAL ENERGY AGENCY The International Energy Agency (IEA) is an autonomous body which was established in November 1974 within the framework of the Organisation for Economic Co-operation and Development (OECD) to implement an international energy programme. It carries out a comprehensive programme of energy co-operation among twenty-six of the OECD’s thirty member countries. The basic aims of the IEA are: • to maintain and improve systems for coping with oil supply disruptions; • to promote rational energy policies in a global context through co-operative relations with non-member countries, industry and international organisations; • to operate a permanent information system on the international oil market; • to improve the world’s energy supply and demand structure by developing alternative energy sources and increasing the efficiency of energy use; • to assist in the integration of environmental and energy policies. The IEA member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, the Republic of Korea, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom, the United States. The European Commission takes part in the work of the IEA. ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of thirty democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The European Commission takes part in the work of the OECD. © OECD/IEA, 2005 No reproduction, copy, transmission or translation of this publication may be made without written permission. Applications should be sent to: International Energy Agency (IEA), Head of Publications Service, 9 rue de la Fédération, 75739 Paris Cedex 15, France. TABLE OF CONTENTS 1 ORGANISATION OF THE REVIEW ........................... 7 2 SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS .... 11 3 GENERAL ENERGY POLICY ................................. 21 4 ENERGY AND THE ENVIRONMENT ......................... 37 5 ENERGY DEMAND AND END-USE EFFICIENCY ............... 51 6 OIL ...................................................... 67 7 COAL .................................................... 89 8 NATURAL GAS ............................................ 99 9 RENEWABLES ............................................. 117 10 ELECTRICITY, NUCLEAR POWER AND CO-GENERATION ....... 131 11 ENERGY RESEARCH AND DEVELOPMENT ................... 159 A ANNEX: ENERGY BALANCES AND KEY STATISTICAL DATA ....... 169 B ANNEX: INTERNATIONAL ENERGY AGENCY “SHARED GOALS” . 173 C ANNEX: GLOSSARY AND LIST OF ABBREVIATIONS ............. 175 3 Tables and Figures TABLES 1. Taxes on Oil Products and Natural Gas in Turkey, 30 April 2004 . 30 2. Winter Season Air Pollution Trends in Turkish Cities ............... 41 3. Turkish and WHO Air Quality Standards ........................... 43 4. Emissions Standards for Combustion Plants in Turkey ............. 44 5. Oil Reserves in Turkey, 1 January 2004 ............................ 70 6. Crude Oil Production in Turkey, 2003 .............................. 70 7. Oil Retailers and their Shares in the Turkish Market, 2003 ....... 73 8. Oil Product Import/Export Balance, 2003 ......................... 77 9. Production and Productivity in Hard Coal Mining ................. 90 10. The Workforce in Hard Coal Mining ................................. 90 11. Lignite Production and the Workforce of TKI ...................... 91 12. State Assistance to TTK ............................................. 93 13. TTK’s Hard Coal Sales .............................................. 95 14. Natural Gas Import Contracts ...................................... 101 15. Natural Gas Pipelines in Turkey .................................... 102 16. Renewable Energy Supply in Turkey, 1990 to 2003 ............... 117 17. Hydropower in Turkey, 2004 ....................................... 118 18. The GAP Project, 2004 ............................................. 120 19. Regional Solar Energy Potential of Turkey ......................... 122 20. Renewable Energy Projections in Turkey ........................... 125 21. Renewable Electricity Generation Licences ......................... 125 22. Long-term Sectoral Electricity Demand ............................. 133 23. Government’s Energy R&D Budget, 2002-2003 ................... 163 FIGURES 1. Map of Turkey ....................................................... 22 2. Total Primary Energy Supply, 1973 to 2020........................ 25 3. Energy Production by Source, 1973 to 2020 ....................... 25 4. CO2 Emissions by Fuel, 1973 to 2002 .............................. 37 5. CO2 Emissions by Sector, 1973 to 2002 ............................ 38 6. Energy-related CO2 Emissions per GDP in Turkey and in Other Selected IEA Countries, 1973 to 2010 ............................. 39 7. Energy Intensity in Turkey and in Other Selected IEA Countries, 1973 to 2010........................................................ 51 8. Total Final Consumption by Source, 1973 to 2020 ................ 53 9. Total Final Consumption by Sector, 1973 to 2020 ................. 53 10. Total Final Consumption by Sector and by Source, 1973 to 2020. 54 4 11. Petroleum Industry Structure ........................................ 68 12. Petroleum Reserves and Infrastructure in Turkey, 2003 ............ 69 13. Final Consumption of Oil by Sector, 1973 to 2020 ................ 74 14. OECD Unleaded Gasoline Prices and Taxes, Third Quarter 2004 . 80 15. OECD Automotive Diesel Prices and Taxes, Third Quarter 2004. 81 16. Fuel Prices, 2003 .................................................... 82 17. Coal Deposits in Turkey, 2004 ...................................... 92 18. Final Consumption of Coal by Sector, 1973 to 2020 .............. 95 19. Natural Gas Infrastructure........................................... 103 20. Final Consumption of Natural Gas by Sector, 1973 to 2020 ...... 106 21. Gas Prices in Turkey and in Other Selected IEA Countries, 1980 to 2003.............................................................. 108 22. Gas Prices in IEA Countries, 2003 .................................. 109 23. Hydropower Capacity and Electricity Production, 1990 to 2002 . 119 24. Final Consumption of Electricity by Sector, 1973 to 2020 ......... 133 25. Electricity Generation by Source, 1973 to 2020.................... 134 26. Electricity Prices in IEA Countries, 2003............................ 140 27. Electricity Prices in Turkey and in Other Selected IEA Countries, 1980 to 2003 ....................................................... 141 28. IEA Government Budgets on Energy R&D per GDP, 2003 ......... 164 5 ORGANISATION OF THE REVIEW 01 REVIEW TEAM The IEA 2005 in-depth review of the energy policies in Turkey was undertaken by a team of energy policy specialists drawn from IEA member countries. The IEA review team visited Turkey from 27 September to 1 October 2004 for discussions with the Energy Administration, energy industries and non- governmental organisations. The members of the team were: Mr Hartmut Schneider Mr Bob Pegler (Team Leader) Minister-Counsellor, Deputy Director-General, Industry, Tourism and Resources Directorate-General for Energy Australian Delegation to the OECD Federal Ministry of Economics and Labour Mr Jun Arima Germany Head, Country Studies Division International Energy Agency Mr Philippe Guillard Head, Department of Refining Mr Nicolas Lefèvre-Marton and Petroleum Logistic Administrator, Energy Efficiency Ministry of Economy, and Environment Division Finance and Industry International Energy Agency France Ms Lea Gynther (Desk Officer for Turkey) Ms Päivi Janka Administrator, Chief Councellor, Energy Department Country Studies Division Ministry of Trade and Industry International Energy Agency Finland Mr Kohei Miwa Officer, Economic Security Division Ministry of Foreign Affairs Japan Lea Gynther managed the review and drafted most of the report. Nicolas Lefèvre-Marton drafted the chapter on Energy and the Environment. Sandra Martin edited the text. Monica Petit and Bertrand Sadin prepared the figures. 7 ORGANISATIONS VISITED The team consulted with the following organisations: G Adgas (a private gas distribution company) G Association of Electricity Distributors and Retailers (ELDER) G Association of Oil Distribution Companies (ADER) . G Association of Electricity Industrialists and Businessmen (ELSIAD) G Autoproducers and Electricity Generation Association (EÜD) G CorumGas (a private gas distribution company) G Electricity Producers Association G Energy Market Regulatory Authority (EMRA)