Turkey’s energy policies in a global perspective
Dr. Fatih Birol Executive Director, International Energy Agency Istanbul, 30 September 2016 © OECD/IEA 2016
Investment flows signal a reorientation of the global energy system Global Energy Investment, 2015: USD 1.8 trillion Thermal Energy Power Efficiency 7% 12% Renewables 17%
Electricity Networks 14%
Coal 4%
Biofuels and Solar Heat 1%
Oil & Gas 46%
An 8% reduction in 2015 global energy investment results from a $200 billion decline in fossil fuels, while the share of renewables, networks and efficiency expands © OECD/IEA 2016
Top five markets comprised over half of global energy supply investment Energy supply investment in 2015, selected markets USD (2015) billion 0
50
100
150
200
250
300
350
China
United States European Union Russia
India
Boosted by record power sector spending, China regains its position as top investment market, while the US declines due to sharply lower oil and gas investment © OECD/IEA 2016
Global LNG export capacity increases Liquefaction capacity additions 200 Others
160
U.S. 120 bcm
Qatar
80
Australia
40 0 2009-15
2015-21
LNG capacity additions will be led by the US & Australia over the next five years. Growing opportunities for Europe, including Turkey to benefit from competitive prices. © OECD/IEA 2016
There is no “second” China waiting to drive medium-term coal use Global coal demand by region, 2000-2020 Mtce 6 000
Rest of world 5 000 European Union United States Southeast Asia India
4 000 3 000 2 000
China 1 000
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Strong growth in coal use in India & Southeast Asia to offset declines in the EU & the US, but does not match the rise seen over last decade in China. © OECD/IEA 2016
The cost of clean energy continues to fall Indexed cost of onshore wind and utility scale PV 120% Indexed cost (2008=100%)
100% 80%
60% 40% 20% 0% 2008
2009
2010 Onshore wind
2011
2012
2013
2014
2015
Solar PV - utility scale
The falling cost of clean energies opens new opportunities but appropriate market design and regulatory frameworks remain critically important © OECD/IEA 2016
The global energy outlook China & developing Asia drive global demand: China’s transition to a more
diversified & less energy-intensive growth model impacts energy markets The natural gas landscape is changing: Ample low cost LNG supplies available
for gas consumer markets – opportunity for competition and diversification Low oil prices bring gains to consumers, but can also sow the seeds of future
risks to energy security and energy transition Paris Agreement: the energy transition is underway, but not on track and
governments need to ring-fence policies against market swings
© OECD/IEA 2016
Turning to Turkey
From a global energy context to Turkey’s energy policy
© OECD/IEA 2016
Ample opportunities for diversification Total energy supply, 1973-2015 140 120
Oil Coal Natural gas
80 60
Biofuels and waste Hydro
40
Geothermal
Mtoe
100
20
Solar*
Wind* 0 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
Energy demand is growing rapidly and is dominated by fossil fuels (88%), signaling significant scope to improve efficiency and boost renewables © OECD/IEA 2016
Turkey’s gas demand reaches record levels Gas demand (primary energy) per sector 50 Power generation
45 40
Industry
35 Transport
bcm
30 25
Residential
20 15
Commercial
10 Other
5 0 1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
Gas demand skyrocketed from 20 bcm in 2003 to 48 bcm in 2015. Import dependency has risen and network capacity lags behind peak demand. © OECD/IEA 2016
Turkey‘s electricity security Installed capacity and peak demand
GW
80
80%
70
70%
60
60%
50
50%
40
40%
30
30%
20
20%
10
10%
0
0% 2009
2010
2011
2012
2013
Installed capacity Peak demand Capacity margin (%)
2014
Improved capacity margins and integration with Europe (ENTSO-E) are positive developments; It is time for the domestic grid to be modernised. © OECD/IEA 2016
Huge opportunities for energy efficiency Total energy supply per GDP in selected IEA countries 160 Spain
140
Italy
toe/USD GDP (index 1973)
120
IEA Europe 100 Germany 80 Poland 60
Turkey
40 20 0 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
IEA Europe average energy intensity has decreased since 2005 (-16%). Turkey’s energy intensity has increased over the period (+7%). © OECD/IEA 2016
Turkey’s power sector can play a key role on the road from Paris COP21 CO2 emissions from fuel combustion by sector 350
Power generation
300
Industry
MtCO₂
250 Transport
200 150
Residential
100
Commercial**
50 0 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Turkey has an ambitious coal development plan; Cleaner coal technologies and refurbishments will be critical © OECD/IEA 2016
Renewables deployment is taking off Share of renewables in electricity generation, 2015 100% Turkey Turkey
80% 60% 40% 20% 0%
Biofuels and waste
Solar
Geothermal
Wind
Hydro
Renewables make up 32% of the power mix, with wind & solar growing fast. Focus now needed on long-term targets, one-stop-shop permits & system & grid integration. © OECD/IEA 2016
IEA’s key recommendations to Turkey Energy market reform: Promote competitive wholesale markets for
gas and electricity with independent system operators and regulators
Energy security: Ensure investment in resilient gas and electricity
infrastructure and nuclear safety/security. Diversification is key!
Energy efficiency: Implement a government-led EE plan focusing on
buildings, industry, transport, cleaner coal, and air quality
Renewables: Adopt longer term targets, one-stop-shop permitting,
promote network investment & grid integration rules
Long-term energy agenda: Building on Vision 2023, set out an energy
strategy for 2030, consistent with climate and energy security goals
© OECD/IEA 2016
