Turkey Power Report Q4 2009

The new Turkey Power Report from BMI forecasts that the country will account for 7.97% of Central and Eastern European (CEE) regional power generation by 2013, and retain a theoretical surplus that is consumed largely by system losses and inefficiency. CEE power generation in 2008 was 2,610 terawatt hours (TWh), representing an increase of 1.35% over the previous year. We are forecasting a rise in regional generation to 2,884TWh by 2013, representing an increase of 10.51%. Thermal power generation in 2008 was around 1,342TWh, accounting for 51.42% of the total electricity supplied in the region. Our forecast for 2013 is 1,384TWh, implying 3.11% growth that reduces only slightly the market share of thermal generation to 47.99% – in spite of environmental concerns promoting renewables, hydro-electricity and nuclear generation. Turkish thermal generation in 2008 was 164TWh, 12.24% of the regional total. In 2013, it will account for 13.16% of thermal generation. For Turkey, gas was in 2008 the dominant fuel, accounting for 31.6% of primary energy demand (PED), followed by oil at 31.5%, coal at 29.6%, with hydro having a 7.3% share of PED. Regional energy demand is forecast to reach 1,518mn tonnes of oil equivalent (toe) by 2013, representing 11.84% growth over the period. Turkey’s 2008 market share of 7.56% is set to rise to 7.89% by 2013. Turkey plans long-term nuclear power construction, but currently makes no contribution to regional nuclear consumption. Turkey now shares first place with Poland in BMI’s updated Power Business Environment Rating, and is just two points ahead of Kazakhstan. It is hard to see Turkey being able to keep the Caspian state at bay over the medium to long term, and it may be unable to keep up with Poland for long. The current score reflects the substantial size of the country’s electricity market and infrastructure, a high proportion of (mostly hydro) renewables in the energy mix, average growth in PED and the region’s most rapid rate of population growth. Country risk factors to some extent offset the industry scores. BMI forecasts that Turkish real GDP growth will average 2.02% a year between 2009 and 2013, but a decline of 6.20% is expected in 2009. Total population is expected to rise from 71.5mn in 2008 to 75.8mn by 2013, and GDP per capita and electricity consumption per capita are forecast to increase 48% and 5%, respectively. Power consumption is expected to increase from an estimated 150TWh in 2008 to 167TWh in 2013, while the theoretical power generation surplus could potentially rise from an estimated 49TWh in 2008 to a forecast 63TWh in 2013, assuming 3.30% annual growth in electricity generation. Between 2008 and 2018, we forecast an increase in Turkish electricity generation of 37.1%, which is above average for the CEE region. This equates to 18.7% in the 2013-2018 period, up from 15.5% in 2008-2013. PED growth is set to fall from 16.8% in 2008-2013 to 14.8% during 2013-2018, representing 34.0% for the entire forecast period. An increase of 99.4% in hydro-power use during 2008-2018 is a key element of generation growth. Thermal power generation is forecast to rise by 16.1% between 2008 and 2018. Details of BMI’s long-term forecasts can be found at the end of this report.