The planet must be managed in a much more co-ordinated and joint way than today. Clean energy will be the focus.
Many people say that Turkey, the host of this year’s G20 meeting, is running a dangerous energy security risk. Its only native fossil fuel resource is low-quality lignite, and its rapidly expanding economy requires an equally steep hike in energy use.
Over the last 50 years, primary energy consumption in France doubled; in Germany, it grew by only 20%; but in Turkey, it increased by more than a factor of 13! And many expect that trend to continue. Understandably, this is cause for concern because a large share of Turkey’s electricity is generated with imported gas, two-thirds of which comes from Russia. Meanwhile, Turkey is surrounded by approximately 70% of the known global oil and gas reserves. Its geographic position appears to be its best energy policy advantage.
But there is another way to view the situation. Economies and energy systems are changing. The direct link between energy consumption and economic growth has clearly been broken. Growth is more dependent on skills, innovation and the efficient use of resources than on burning more oil or gas. And Turkey’s energy consumption is approaching that of some of the world’s most advanced economies.
At present, Turkey consumes half the energy per capita compared to advanced industrialized countries such as Italy, Switzerland, Denmark, Japan and Germany. Yet these countries expect to reduce their energy consumption. If Turkey’s ambition is to develop an efficient, modern economy, it would seem logical to use these countries as a benchmark. With this in mind, Turkey should expect much slower growth and, in the not-too-distant future, a plateau and even decline in its energy consumption.
The energy mix is also changing. Growth in renewables and energy efficiency is shifting the balance towards clean energy. EU countries have ambitious renewable energy goals for 2020, and some countries have already met them. The clean energy boom, however, is no longer primarily an EU phenomenon.
China and the US are engaged in fierce competition over wind, solar and energy storage technologies. Most of the G20 countries have ambitious renewable energy plans as well. Brazil generates 73% of its electricity from renewable sources; India is planning to install a 100GW capacity solar PV system and a similar capacity wind power system by 2022; and even Saudi Arabia, a leading oil and gas exporter, aims to become a global leader in solar energy.
Turkey is already taking some strong steps into the new energy world. In 2009, it set a goal of generating 30% of its power from renewables by 2023. To achieve this, the government is planning to expand its hydropower generation and to install 20GW of wind capacity. This commitment is a cautious but important sign of Turkey’s full indigenous clean energy potential. The country could harness significantly more wind energy and can certainly expand its plan to install only 3GW of solar capacity.
The cautious approach to solar energy production is understandable for a plan that was developed in 2009 when the cost of photovoltaics was still high. But since then, the cost of PV panels has fallen by about 80%, while electricity prices in Turkey have increased by 45.2%.
Countries such as the UK, which installed the largest solar capacity in the EU in 2014, and Germany, the European PV champion, currently subsidize their industrial-size solar power plants at a rate of €0.06 to €0.09 per KWh. This is approximately half the residential price of electricity in sunny Turkey.
The UK government is currently receiving strong criticism for its intention to reduce solar subsidies by 87%. This reduction is widely seen as drastic and threatens the existence of the solar industry in the country. Whether or not the measure passes, it is an indication of the approaching end of governmental financial support for mature renewable technologies. At the same time, with solar irradiance approximately 50% higher than in Germany and the UK and with electricity prices close to or below the prices in the UK, France and the Netherlands, solar power represents a radically different economic proposition for Turkey.
And there is another significant potential energy resource – improvements in Turkey’s relatively low energy efficiency. Its national energy intensity is nearly twice the EU average. While it scores well against countries in the Middle East, Eastern Europe and even the global average, Turkey can still make significant progress and achieve a level of energy efficiency comparable to EU member states.
What role would coal and nuclear energy have in this alternate energy scenario? Their fates will probably be decided by economic factors. Nuclear energy is becoming too expensive and is no longer competitive against renewables and energy efficiency. Coal (or lignite, in Turkey’s case) is potentially also an expensive option if power plants are built with the best available technology and if the climate, environmental and health externalities are properly factored into the energy price.
Of course, a new energy future for Turkey should not exclude capitalising on its strategic geography. The lifting of sanctions on Iran and the discovery of gas reserves in the eastern Mediterranean Sea add even more value to the country’s position. Yet with gas demand in Europe falling and the generation of renewable energies increasing, Turkey should also consider both gas pipelines and power cables as transborder infrastructure options. The competition between gas and renewable energy is heating up, and Turkey could play a key role in long-distance electricity transfer.
Given all this, the evolving energy options for Turkey should influence its posture in the G20 discussions. Turkey is well positioned to become one of the leaders in a new global energy wave for at least three reasons: first, it has an abundant and wide variety of economically viable clean energy resources; second, a sustainable, longterm energy solution strengthens both its economy and national security; and third, Turkey has both the technical capacity and the access to capital needed to develop a modern energy sector.
The G20 meeting gives Turkey an excellent opportunity to lead a global discussion on energy. It remains to be seen whether the country will seize the moment.
The planet must be managed in a much more co-ordinated and joint way than today. Clean energy will be the focus.
