Turkey Energy Sector
Along with the impressive economic growth that the country has enjoyed over the past 10 years, Turkey has become one of the fastest growing energy markets in the world. New opportunities for growth were created through the deployment of a highly competitive structure central to the privatization program implemented during the aforementioned decade of economic growth. Thanks to this effort, power distribution in Turkey is completely under the control of the private sector and privatization of power generation assets is well underway.
The main drivers of the energy demand, estimated to increase around 7 percent per annum until 2023, are economic expansion, rising per capita income, positive demographic trends, and the rapid pace of urbanization.
In its final stage of planning, the establishment of an energy stock exchange is one of the latest steps the Turkish government has taken towards a more competitive energy sector. The energy stock exchange will not only further liberalize the market but will also ensure transparency and help maintain a healthy balance between supply and demand once it has become operational in 2014.
Strategically located between major energy consumers and suppliers, Turkey serves as a regional energy hub. With existing and planned oil/gas pipelines, critical Turkish straits and promising finds of hydrocarbon reserves in the country increase Turkey’s leverage over energy prices and reinforce its gateway status.
Renewable forms of energy are abundant in Turkey. And encouraging policies backed by favorable feed-in tariffs are expected to increase the share of hydro, wind, solar, and geothermal in the national grid in the coming years.
Turkey’s energy sector has been profoundly shaped by the sum of these factors, transforming it into one of the most attractive investment destinations in the world. Along with the implementation of investor-friendly regulations and the high increase in demand, this ever more vibrant and competitive energy sector is attracting the attention of increasing numbers of investors for each component of the value chain in all the energy sub-sectors.
It is estimated that to meet the energy demand in Turkey by 2023, the total amount of investments will have to be USD 120 billion—in other words, more than double what they were in the last decade.
Turkey’s ambitious vision for 2023, the centennial foundation of the Republic, envisages grandiose targets for the energy sector in Turkey.
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