Looking Back 2022: An increase in the use of renewable energy
Looking Forward 2023: Looking Forward (Predictive) 2023 Presidential Election
2022 has been a difficult year for Turkey in many aspects. The local currency, Turkish Lira, has lost significant value against all the hard currencies and inflation has exceeded 100% per year. In addition to the economic burdens, several major natural disasters also happened within the year with substantial economic effects and casualties. Regional political turbulences such as the ongoing civil war in Syria and the war between Ukraine and Russia have a huge adverse impact on the Turkish economy. Despite this gloomy picture of the economy and regional politics, the government’s supportive policy and the ongoing momentum of the private sector’s appetite for renewable energy investments resulted in the following impressive numbers.
The percentage of energy production using coal has decreased from 31% to 21% whereas the overall percentage of renewable sources surged from 33% to 53%. The main reason is surely the increasing number of renewable energy production facilities (i.e., solar and wind), but the record level of rain and snowfall has played a major role in the increase of hydro-based energy production which has increased almost twofold. The sharp decrease in natural gas-based power production can be attributed to a large increase in international natural gas prices. Whatever the reason could be, the striking increase in the utilization of renewable energy sources is a very positive and important event to be noted in 2022.
|PERCENTAGE IN TOTAL ENERGY PRODUCTION (%)
The most important event to take place in Turkey in 2023 is the upcoming general elections for both parliament and the president. Almost all the policies are designed to increase the ruling party’s popularity. The risk is the populist policies that are imposed by the government. The consequence of these policies will inevitably further increase inflation and the devaluation of the Turkish Lira against hard currencies. Should this happen, the investment environment for the private sector will be adversely affected by a slowdown in renewable energy investments at least for a while until the dust settles after the elections. Furthermore, should the government provide subsidies for local coal for domestic heating (as it was done in the past prior to the elections as a part of the populist policies), fossil fuel emissions, particularly in the urban areas, will increase during the cold winter period.
Another positive event this past year was the discovery of a big natural gas reserve under the Black Sea with an estimated volume of 700 billion m3. The reserve will be developed in the coming years starting from 2023 to reduce the dependence of the country on imported natural gas.
This Post was submitted by Climate Scorecard Turkey Country Manager Dr. Semih Ergur