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Urbanization and industrialization resulting from the rapidly growing population in our country which is on its way to development cause an average increase of 6-9% per year in the demand for electricity. Therefore, the rise in living standards and conditions in Turkey gradually gives rise to growing demand for electricity.
"With rapid expansion in the area of use of electricity which is the basic input of all kinds of economic activities, in line with today’s constantly evolving technology, energy and consequently electrical energy has become an indispensable element of social life. Electricity consumption is one of the most important indicators of economic and social development. The electrical power consumption and/or generation per capita in a country is significant in terms of reflecting the living standard in that country."
The electricity sector in Turkey is going through a rapid growth and a liberalization process. In line with the rise in demand, the size of annual investments and funding needs amount to 3 billion dollars in the average. In order to enable investments by the private sector without creating any additional burden on public funding, the electrical power sector needs to be opened to competition, the public sector has to perform its supervision and control activities effectively by taking into account the reliability of supply and the investment environment ought to be improved with accelerated steps taken for the privatization of publicly owned facilities.
Development of the Turkish Electrical Market
The electricity sector which was under the control of the Turkish Electricity Authority (TEK) until 1993 was brought together under two roofs namely TEAS (Generation, Transmission) and TEDAS (Distribution) in line with liberalization and privatization targets.
With a view to forming a legal infrastructure close to the European Union “Electricity Directive” that would provide the principles for the establishment and operation of a liberal electricity market in Turkey, the companies were divided into the four separate entities of EUA? (Generation), TEIAS (Transmission), TETAS (Wholesale) and TEDAS (Distribution) in 2003 upon the taking effect of the Electricity Market Law number 4628. |
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With the taking effect of the Electricity Market Balancing and Settelement Regulations (DUY) upon publication of the Official Gazette dated 3 November 2004 and start of the actual implementation in August 2006, the first step was taken towards a competitive market structure that provisions the application of hourly rates in private and public electricity generating stations. The balancing and reconciliation system covers principles and procedures that relate to balancing the duties and responsibilities of the parties with supply and demand on a concurrent basis and the settlement of debts and receivables to result from the participation of license holding legal entities in the balancing and settlement market.
"Transmission and distribution activities were naturally accepted as a monopoly due to high investment costs, the non-economic nature of establishing and operating a secondary parallel network and common use by market participants." As of 2008, however, distribution companies within TEDAS started undergoing a privatization process. The target to establish a competitive market structure for distribution as well as generation shall create the investment environment for the private sector and thus accelerate the reform process in the electricity sector. |
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Energy Generation in Turkey as distributed among sources
A major part of our capacity is provided by thermal power stations. When energy generation in Turkey as distributed among sources is taken into account, it is seen that natural gas based generation occupies an approximate share of 45 percent. According to data provided by the Ministry of Energy and Natural Resources, the share of imported sources used for the generation of electricity in Turkey increased to about 58 percent in 2007. The share of thermal power stations within generation has increased to 80 percent. |
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| Installed capacity percentages according to resource types as of 2007 year end: |
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| Amount of electricity generated according to resources as of 2007 year end: |
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Electricity Supply-Demand
When an economic growth of 5,5% and population increase of 1,4% is assumed, according to the base scenario of TEIAS it is foreseen that electricity consumption shall reach 351 TWh by 2015 with an average increase of 8,4% per year and in case of low demand, it shall reach 301 TWh by 2015 with an average increase of 6,3%. According to the high demand scenario of TEIAS, Turkey will be facing electricity shortage in 2009 and according to the low demand scenario in 2011. However, in these scenarios it was assumed that existing and licensed projects and projects with on-going construction were commissioned. As a matter of fact, a part of licensed projects are cancelled due to lack of investments today. In line with this data, an annual average investment of 2,5-3 billion dollar has to be made in order not to face any energy shortage. |
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| Electrical Energy Consumption Realized in Turkey |
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| According to High Demand Scenario (Electricity Supply Demand Balance) |
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| According to Low Demand Scenario (Electricity Supply Demand Balance) |
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