Energy supply security is one of our prime concerns. Our installed capacity has reached 90 GWe, whereas peak demand was at 50 GWe in August 2018. Electricity generation has reached to 300 billion KWhours in 2018. Our local lignite production was about 50+ million metric tons in 2018. Hard coal production was 2 million metric tons. Imported hard coal was 30 million metric tons. Natural gas consumption is expected to be 53 billion cubic meter (bcm) in 2018.

Economies and businesses are always shaped by expectations, just as market expectations are important in economic forecasts themselves. Within our professional capacity, we have tried to outline a draft forecast for the upcoming days. While it may not necessarily foresee the future in all its detail, it is better to have one, rather than none. Here are our short-term new year predictions:

Our local energy markets are in need of restructuring about 50+b US Dollar current debt. Power plant ownership changes may occur.

The import tax as imposed on imported coal was a deterrent figure for future investments for imported coal firing thermal power plants. Anyhow, the latest thermal power plants are exclusively built by Chinese companies due to their ultra-low lump sum turnkey prices, covered by cheap PBoC project financing. However, these plants have poor design, they are low in spares, and carry a short life span. If you desperately need electricity generation, then price is not very important. The tax will be collected by our Treasury, and end price is also taxed, so our Treasury will get money from both ends, all other parties are intermediaries in the long run.
On the other hand, 5-6 $Cents per kwh electricity purchase guarantee by public enterprises for local coal firing energy generation is a good booster for new investors. However, it is not so pleasing to place power plant construction orders with Chinese contractors just because of their ultra-cheap turnkey prices for new local coal firing thermal power plant investments.

These plants do not meet national standards, norms, rules, regulations, laws. They have poor design which are not applicable for local coal, they have limited or almost no spares and high breakdown, low availability and low life span during operation.

New tenders for local coal firing thermal power plants are in Cayirhan-2, Eskişehir Alpu, Konya Karaman, Trakya Saray. Soma Deniş, Soma- Eynez and Çan thermal power plant investment projects are ongoing. Local populations are not comfortable with these new local coal investments. There will be growing public reactions expected to halt these investments.

Also read:  The Impacts of the US Iran Embargo on Turkey #Energy

There are still imported coal firing investment projects in Çanakkale, Aliağa, Amasra, Iskenderun Bay, although imported coal with current floating prices between 90-100 USD per ton of 6000 kcal/kg LHV are too expensive and hence they are not encouraged any more.

There will be growing public reactions expected to halt these investments.
There are still imported coal firing investment projects in Çanakkale, Aliağa, Amasra, Iskenderun Bay, although imported coal with current floating prices between 90-100 USD per ton of 6000 kcal/kg LHV are too expensive and hence they are not encouraged any more.

COP24 Poland 2018 meetings also advised the international investors not to invest on coal firing thermal power plants.

We also noted that recent CFB based thermal power plants are not fit to fire high moisture local content. Local coal with high moisture content cannot be fired in CFB boilers since it is frozen in winter and it is in sludge (mud) form in summer time. Indirect firing pulverized coal based thermal power plant design is best for local coal with more than 30 years of proven operation.

On the other hand, two wind and solar tenders with1000 MWe each were completed. We expect to have more of these investments in future.
Solar power investments are reduced to 700-800 US$ per kw, whereas fossil fired thermal power plants are at 1500-2000 US$ per kw. Solar power needs no fuel, whereas thermal power plants needs fossil fuel which makes environment polluted. Solar power plants are available only on daytime which makes 2000 hours at least per year, whereas thermal power plants can work 6000- 7000 hours per year.

Solar power can generate electricity at 3-4 US cents per kw-hour, whereas thermal power plants sell electricity at 5-6 Us cents per kw-hour. Based on these new market figures, renewable energies are getting more competitive and feasible in the long run.

We wil see more East Med offshore explorations on the diplomatic agenda in the near future. Offshore fields around Cyprus will be the focus for fair sharing of natural resources.

On negotiation table behind closed doors in Moscow and Ankara (and Sochi), there were negotiations for new prices on natural gas sales, more concessions on the 63 bcm capacity Turkish Stream underwater pipeline construction project and better terms for the 4800 MWe nuclear contract etc. Nuclear power is too expensive in terms of unit kw-hour compared to prevailing average electricity prices in the local market and waste disposal problem is still not solved. There is limited activity in Akkuyu NPP, whereas Sinop NPP is on hold, its feasibility in evaluation. We should note that in the long-term, Mersin Akkuyu nuclear project may also serve as a new Russian military seaport on Mediterranean coast to reinforce Russian presence on warmer seas.

Also read:  Turkish Electricity Market Report #Energy

Arab and especially rich Gulf countries are completely ignorant of the events which took place in our environment since they have worse incidents, they face every day. We have fair deals with Iran due to our favorable gas purchase agreements. However due to their increased internal gas demand, they stopped sending gas to our system as of December. We have gas supply and energy generation drop in our energy markets. US Embargo on Iran will have its impact.

National Security is to be reinforced since South East insurgency may get worse. As seen everywhere in the world, such as in Ireland, Scotland, Bask in Spain, if minorities are not fairly represented in the national parliament, then they may look for their alternative solutions.

Bankruptcy postponement epidemic in the local markets spreads to low capital- small companies. That will have a high impact on our economy despite unrealistic pictures as painted by public officials. People have lost confidence to such public declarations. Foreign exchange rates may dive once again in time.

European Union has frozen accession talks completely since all remedy requests are responded with futile responses. Luxemburg, Germany, Austria, Sweden, Denmark have already voiced necessary applicable counter measures. Death penalty, unavoidable bribery and public corruption, sexual abuse are unacceptable and non-negotiable for Europeans.

There is a wide range of consensus for low profile public appearance. People deactivate their accounts in social media. They are not interested in any public expression. Newspaper columns are repetition of earlier articles. People are indifferent to events since so many nasty things have happened in the near past with no reasoning and no meaning we can name.

Immigration applications for Western universities among academics and young professionals are on the rise. Similarly, capital moves from local to international markets are increasing.

We believe that these are a few candid warning indicators, which you will seldom read from a local source. We would be pleased to receive your comments and feedback over the course of the upcoming year.