This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 6/21/2019

Overview

Electric Power Sector

 

2016

2017

2018

2019 estimated

Total Local Production

1,480

1,490

1,240

1,200

Total Exports

285

290

310

320

Total Imports

4,040

4,380

4,260

4,300

Imports from the US

56

65

85

120

Total Market Size

5,235

5,580

5,190

5,180

Exchange Rates

2.90

3.50

4.80

6.00

(total market size = (total local production + imports) - exports)                                                                                                                                                                                                          Units: $ millions

Source: Ministry of Energy and Natural Resources, State Institute of Statistics.

Turkey is Europe’s 6th largest electricity market.  Electric energy generation capacity reached 88,550 MW at the end of 2018, generating 300 billion kWh of electricity.  Natural gas-fired power plants provided 30% of power generation, coal-fired power plants provided 37%, hydroelectric 20%, wind energy 6.8%, geothermal 2.4%, and other resources 3.8%.  The Ministry of Energy and Natural Resources (MENR) predicts that Turkey’s current electricity demand of 280 TWh will increase to 414 TWh by 2023.  84% of power generation comes from the private sector and 16% from state-owned EUAS.

Turkey has a semi-liberalized, but regulated, market.  EXIST (Energy Exchange Istanbul) is the electricity spot market of Turkey, which includes day-ahead and intraday markets, where 40% of electricity is traded with 854 market participants.  Electricity prices in real time can be followed on EXIST's website.

Turkey has plans to invest $110 billion in the energy sector by 2023 (the centennial of the Turkish Republic), distributed as $27 billion for nuclear power plants; $22 billion for wind power; $17 billion for hydroelectric; $15 billion for the grid network; $14 billion for coal mining development and coal-fired power plants; $7 billion for solar power; $3 billion for gas-fired power plants; and $5 billion for other types of plants.

Turkey spent approximately $3 billion over the last three years to upgrade the electric distribution system and expects another $1.5 billion in investments in 2019 and 2020.  Spending for both electric transmission and distribution network upgrades and expansion will be approximately $4.5 billion.  The total length of power lines is nearly 1 million miles.

Turkey is targeting an additional 10,000 MW increase in both wind and solar energy installed capacity within 10 years, with a total installed capacity of 34,000 MW in hydroelectric energy and 1,000 MW in biomass energy.  Having already reached 1,155 MW of installed capacity for geothermal energy, Turkey set the new target at 4,000 MW by 2030.  U.S. firms have supplied equipment in the renewable energy market.

The cost of energy commodity imports, such as oil, gas and coal, continues to exceed $40 billion annually, increasing Turkey’s current account deficit.  Turkey plans to decrease this amount by using domestic resources such as lignite coal, renewables and nuclear energy.  As a result, MENR has a new policy to increase exploration and production of indigenous energy resources with the target of 2/3 of electricity generation coming from domestic energy resources by 2020, up from the current 52%.

The Turkish Government plans to increase the domestic coal-based installed power capacity from 11,268 MW to 14,664 MW by 2023 and has tendered licenses for the development of new coal fields integrated with new coal-fired plants, estimated to be 18.5 GW.  The license winners will develop the coal mines with the proven reserves, build the power plants, and operate them for 30 years with special incentive prices guaranteed to be considerably higher than the spot market price.  These newly introduced incentives will increase local production of coal mines, which means development of new coal mines.  Therefore, mining equipment demand will increase during the next five years in Turkey.

Turkey imports coking coal and steam coal from the United States for use in several industries including steel and cement factories and for consumption by coal-fired power plants at the Mediterranean and Black Sea coasts.  U.S. coal suppliers compete with suppliers from Russia, Ukraine, South Africa, South American countries and Australia.

Renewable Energy
The Turkish Government plans by the end of 2023:

  • to increase the solar energy-based installed power capacity from 5,316 MW to 10,000 MW

  • to increase the wind energy-based installed power capacity from 7,078 MW to 11,883 MW

  • to increase the hydroelectric energy-based installed power capacity from 28,391 MW to 32,037 MW

  • to increase the geothermal and biomass based (biogas included) total installed power capacity from 1,962 MW to 2,884 MW

The government has issued a regulation and increased unlicensed renewable energy power plant installed capacity from 1 MW to 5 MW.  Unlicensed investments do not require a license from the Energy Regulatory Authority (EMRA) nor establishment of a special purpose company.  Roof-top solar energy producers can sell their excess electricity (up to 5 MW) to the grid if they are production plant owners; and 10 kW if they are homeowners.  Renewable energy establishments for agricultural irrigation, potable water and wastewater treatment facilities, and state-owned establishments are also included into this regulation.  Regional renewable energy investments will have the same opportunity for the next 10 years following commissioning.
As long as the generation and consumption locations are the same, solar or wind energy prosumers will be able to use net-metering with the grid.

MENR developed a new model, the YEKA Renewable Energy Zone, through which MENR awards contracts to investors that provide power purchase guarantees for large-scale solar or wind power generated on the condition that the investor builds manufacturing facilities for a certain percentage of the equipment in-country. 

Nuclear Energy Investments
Turkey’s target is to meet 10% of electricity demand from nuclear energy and it plans to have two fully operational nuclear power plants (NPP) by 2028.  For this reason, the Turkish Government signed two intergovernmental agreements (IGAs), one with Russia and one with Japan.  The Russian project in Akkuyu will have four 1,200 MW VVER units (4,800 MW) costing approximately $20 billion.  If it moves forward, the second NPP, to be built in the province of Sinop by a Japanese-French-Turkish consortium, will have a total capacity of 4,480 MW (4 units of ATMEA1) under a Public-Private-Partnership (PPP) at a total estimated cost of $22 billion.  A feasibility study for a third NPP is under consideration.

Both projects are moving slowly, with the Russia-led project just completing the concrete foundation for the power plant.  The project in Sinop, with only the environmental impact assessment completed, is on hold as the consortium, led by Mitsubishi Heavy Industries, has concerns regarding significant cost increases.

Electricity Distribution Network Renovation and Smart Grid
There are 21 regional electricity distribution companies (DisCos) in Turkey and all are fully privatized.  Technical and non-technical losses in electricity distribution varies from region to region and ranges between 6-350%.  The average loss in distribution grids is 12%.  To lower these losses and upgrade the grid, DisCos will invest over $5 billion for grid upgrades and smart grid systems. 

The DisCos’ goal is to renovate the entire grid by 2020 and then gradually convert to smart grids.  For this purpose, ELDER, the Association of Distribution System Operators, initiated the Smart Grid Roadmap 2023 project with the participation of all DisCos.

The Energy Market Regulatory Authority (EMRA) receives, evaluates and allows expenditures from DisCos for their potential investments in grid upgrades as reflected in consumers’ bills.  EMRA allows DisCos to invest1% of grid upgrade investments on implementation of smart grid systems.

MENR’s 5-year strategic plan looks to decrease distribution utility losses to 10% on average by 2020.

Electricity Transmission
The Turkish Electricity Transmission Company (TEIAS) is the only electric transmission company owned by the state while all 21 DisCos are private.  TEIAS owns and operates 66,453km (42,292 miles) of high voltage transmission lines, 729 sub-stations with 163,849 MVA power capacity covering all of Turkey.  The transmission lines are 30-40 years old; TEIAS has so far renovated 30% of the lines and plans to renovate the remaining 70% by 2020, with plans to spend approximately $3.3 billion to accomplish this.  TEIAS experienced blackouts in recent years due to some technical failures.  Therefore, air-surveillance, repair and maintenance have become a priority.  U.S. firms offering such services should contact TEIAS for potential opportunities.

Leading Sub-Sectors

  • Smart grid systems (SCADA, GIS, AMR, AMI, Automated Demand Side Management, PLC and other communication systems, Volt-VAR control systems, OT, CIS, Control Centers, etc.)

  • Grid modernization and voltage and frequency regulation systems

  • Solar energy power generation engineering and design services

  • Geothermal power plant equipment

  • Waste-to-energy systems

  • Wind turbines and generators

  • Energy storage systems

  • Smart LED Lighting Systems

  • Fuel cells

  • Hydroelectric turbines and coal gasification systems

  • Nuclear consultancy and nuclear power plant equipment and services

Opportunities

The U.S. Department of Commerce’s International Trade Administration identifies Turkey as a top destination for U.S. smart grid technology, renewable energy and civil nuclear exports; see Top Markets, a market assessment tool for U.S. exporters.  During the next five years, implementation of smart grid systems and projects will create major opportunities in Turkey.  The 21 DisCos will implement grid upgrades and smart grid systems to decrease the 12% average technical and non-technical losses to an average nationwide loss of 10% by 2020. 
Other opportunities exist in energy storage, live wire maintenance and repair, solar, wind, waste-to-energy, geothermal and hydroelectric energy projects.  Although cost is important, many Turkish firms seek high efficiency, quality American products with financing and operational experience. 

The U.S. Trade & Development Agency, U.S. ExIm Bank and the Overseas Private Investment Corporation would consider financing renewable energy projects in Turkey. U.S. ExIm Bank provides financing for renewable energy projects with a repayment period of 18 years after project commissioning.

Web Resources

For project financing, see:

For further information on the energy sector, contact:

Serdar Cetinkaya
Energy and Mining Leader
U.S. Commercial Service
U.S. Embassy, Ankara, Turkey
Serdar.Cetinkaya@trade.gov
www.export.gov/turkey

Prepared by the International Trade Administration. With its network of more than 100 offices across the United States and in more than 75 markets, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.