Turkey's energy consumption
Turkey's energy consumption is experiencing rapid growth, with an anticipated annual increase of 6 to 7 percent, positioning it as one of the fastest-growing power markets globally. The country's journey in energy began in 1902 with a modest 2-kilowatt generator, and by 1923, installed capacity was only 33 megawatts. Significant developments occurred throughout the decades, including the establishment of the Turkish Electricity Authority in 1970 to regulate the growing sector, which faced challenges during the 1970s global energy crisis. Following market liberalization in the 1980s, private companies began participating in electricity production and distribution, culminating in the enactment of the Electricity Market Law in 2001 to harmonize with EU standards.
Turkey largely relies on imports for its natural gas, sourcing around 98 percent from countries like Russia and Iran. The nation also has limited crude oil reserves and is a significant oil importer, with a daily production rate that falls short of its consumption needs. To diversify its energy portfolio, Turkey is investing in nuclear power, with ongoing construction of reactors, alongside harnessing its rich potential for renewable energy, notably in hydroelectric, wind, and solar power. The country is also leveraging its geographical advantages to enhance its role as an energy bridge between Europe and Asia, facilitating international gas transportation. Overall, Turkey's energy landscape reflects a dynamic mix of challenges and opportunities as it seeks to modernize and diversify its energy sources.
Subject Terms
Turkey's energy consumption
Official Name: Republic of Türkiye.
Summary: Turkey’s annual consumption is expected to grow at a rate of 6 to 7 percent per year, making Turkey one of the fastest-growing power markets in the world.
Electricity was generated in Turkey for the first time with a 2-kilowatt generator connected to a water mill in 1902, during the Ottoman Empire. When the Republic of Turkey was founded in 1923 following the War of Independence, the installed capacity was only 33 megawatts, and electricity production was 45 gigawatt-hours. During the 1950s, in addition to the government, a limited number of private investors began to build and operate power plants through the concessions granted by the government.
Increases in production and consumption called for a more institutionalized regulatory structure. Therefore, the Turkish Electricity Authority (Türkiye Elektrik Kurumu, TEK) was established as a vertically integrated state monopoly in 1970. The global energy crisis of the 1970s inevitably affected Turkey as a fuel importer, and the country went through unavoidable power cuts. Nevertheless, the country reached an installed capacity of about 5,118 megawatts and electricity production of 23.3 terawatt-hours in 1980. Installed capacity grew to about 103,817 megawatts by 2022.
Market Liberalization
In line with the government’s liberalization approach, TEK’s monopoly on electricity was abolished by law in 1984, and private companies were allowed to engage in electricity production, distribution, and transmission activities. In 1993, TEK was added to the privatization program of the government and was restructured into two companies (TEAS and TEDAS). However, until the beginning of the 2000s, several privatization attempts by different governments were reversed by the courts on the grounds that a proper legal infrastructure was not in place.
Finally, in 2001, the Electricity Market Law was enacted with the goal of harmonizing with European Union (EU) legislation, and the Energy Markets Regulatory Authority (EMRA) was established as the independent regulator of electricity, oil, gas, and liquefied petroleum gas (LPG) markets. TEAS was also unbundled into three companies: TEIAS (transmission), TETAS (wholesale), and EUAS (production). The Electricity Market Law envisaged a transition period from January 1, 2005, to December 31, 2012, at the end of which the electricity market was expected to have a liberal and competitive structure. Production and distribution segments were included in the government’s privatization program, whereas transmission remained in state ownership.
Gas
Starting in the 1980s, the use of natural gas increased rapidly, mainly to meet the increase in demand, both for the household and for the industrial sector, as well as to avoid air pollution. Although located next to the richest gas reserves in the world, Turkey’s domestic reserves are very limited, and it imports approximately 98 percent of the gas it uses from Russia and Iran through pipelines, as well as from Azerbaijan and the United States. BOTAS, which is a state-owned company, controls natural gas activities in the country.
On the transportation side, Turkey benefits from its strategic location as an energy bridge between Europe and Asia, connecting gas producers and consumers. The country lies at the heart of international gas transportation, especially from Russia, Iran, and Turkmenistan, and this role is expected to expand in the future.
Oil
Turkey’s total crude oil reserves were estimated at 366 million barrels in 2021. A comparison of Turkey’s annual oil production, approximately 83,000 barrels per day (2023), with its annual refined petroleum consumption, approximately 1.077 million barrels per day (2023), revealed that Turkey was a significant oil importer.
As is the case with gas, Turkey hosts international pipelines. The Baku-Tblisi-Ceyhan pipeline, which transports Azeri oil through Georgia to Turkey, is particularly important for the region.
Nuclear Power and Renewables
Turkey wishes to diversify its energy resources and break away from its heavy dependence on gas imports through nuclear power plants. As the first step and a precursor to intended future projects, Turkey signed a cooperation agreement with Russia in 2010 for the construction and operation of a nuclear power plant in Akkuyu. A total of four nuclear reactors were under construction in 2023.
Turkey has a significant potential for renewable energy, given its location, its diversified climate, and its rich geographical features. With the global rise of the movement to develop renewable energy, Turkey has become a major investment field for domestic and international energy companies.
Turkey's leading renewable energy sources include hydroelectric, wind, and solar power. Hydroelectricity accounted for 21.7 percent of the country's total installed electricity generation capacity in 2022, with wind accounting for 11.3 percent and solar accounting for 4.9 percent. In 2021, 50.8 percent of the total energy generated from renewable sources came from solar energy, with 46.2 percent coming from wind and 3 percent coming from hydroelectricity.
Solar energy is widely used for water heating, although not power generation, given its high costs. Finally, the country’s rich geothermal resources put it first in Europe and seventh in the world. Geothermal generation accounted for 2.9 percent of Turkey's total installed capacity in 2022.
Turkish legislation provides several incentives, guarantees, and exemptions in order to attract major renewable energy investments.
Bibliography
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