This issue of MEE contains a very timely focus on Turkey and how it plans to cope with a sharply rising demand for electricity, driven by population growth and vibrant economic activity. Given its unique position, which includes geographical footholds in both southeastern Europe and western Asia as well as strong cultural, political and economic ties with the Middle East, the country is worthy of study in its own right. However, strong economic growth and rising consumerism in recent years, as well as the civil unrest on Turkey’s doorstep, raise the importance of understanding how the country is responding to its challenges.
Turkey’s many influences pull in a variety of directions, but the recent re-election of the Justice and Development (AKP) party under Prime Minister Recep Tayyip Erdogan may lead to a recalibration of its regional role and an increasingly pro-Western outlook. Recent foreign policy moves in response to the Arab Spring seem to be in line with US thinking and, as a powerful neighbour, Turkey retains considerable influence in the Middle East.
Erdogan’s victory was welcomed by the European Union (EU). In a joint statement, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso said the election results “further Turkey’s democratic institutions, as well as the continued modernization of the country, in line with European values and standards.” Yet the prime minister was also quick to reassert his Islamist credentials, claiming the success was a victory for Muslims in the wider region. Concerns over the extent of Islamist influence in this notionally secularist state have resulted in considerable opposition in Germany to Turkey’s ambitions to join the EU. The view of the EU’s biggest individual member is important. But Turkey’s application is also being vetoed currently by France, Greece and Cyprus.
This open issue does not seem to be holding Turkey back. The country has rebounded strongly from the global financial crisis, posting GDP growth of 8.9 per cent in 2010 while annual demand for electricity is growing at 8 per cent. And power consumption per person, while growing, is still low compared to European standards. The last quarter century has seen generation capacity rise four-fold to around 43 GW and the government is planning a further doubling of this with a target of 96 GW by 2020. It is pressing ahead with the privatization of the remaining state-owned power plants and looking at ways to attract foreign investment into the sector.
Turkey increasingly relies on natural gas for its power generation, with coal and hydropower accounting for the bulk of the remainder. The trend is to use gas wherever it is available. With limited domestic fossil fuel resources, it has to import gas and oil but the country is a transit corridor for both oil and gas because of its strategic location between key producing countries in the Middle East, Caspian Basin and Central Asia and big consumer markets in Europe. It is currently involved in three EU pipeline projects: the Italy-Turkey-Greece Interconnector, the Nabucco project and the Trans Adriatic project. This energy bridge role gives Turkey an important position in the European energy map. With gas likely to become even more strategically significant across Europe in the light of recent decisions over nuclear power in Germany and Italy, keeping the Turkish corridor open becomes ever more vital.
Within Turkey, announcements of new power projects are a regular occurrence with new-build activity right across the power generation spectrum. The Turkish government has been particularly keen to promote renewable energy projects in order to reduce fuel import dependence. Increasing involvement of private sector players along with a highly favourable incentive programme have accelerated wind installations in the country during the last few years. A recent report forecasts that the annual expansion in installed wind power capacity will average about 31.6 per cent during 2010″2014.
The extent of intermittent wind and other renewable generation has itself created fresh challenges with new, flexible power generating capacity needed to ensure grid stability. Markets like Turkey are providing the testing ground for new, more flexible power generation technologies. Equipment providers are looking at how they can achieve the ability to ramp up and down without losing efficiency or increasing fuel costs. Two recent examples are the Wärtsilä-built 270 MW gas engine combined-cycle power plant opened near Aliaga in Turkey last October and GE Energy’s deal to supply a new gas, wind and solar hybrid plant capable of 69 per cent efficiency, using its newly launched FlexEfficiency 50 technology. Both of these projects seek to integrate conventional and renewable generation but in contrasting ways.
The evidence is that Turkey is set on a path of economic expansion that is likely to last at least a decade. This will bring more opportunities for the power industry to help Turkey’s development. The country’s success is built on the determination of a proud and resourceful people who right now believe that, on balance, EU membership is desirable. As the country grows stronger, the point may come when Turkey realizes that it does not need the EU after all. With a powerful pivotal player then outside the club, Brussels may live to regret all its foot-dragging.