What is the Current Status of Renewable Energy Investments in Turkey?
Globally, dependence on fossil fuels is a major factor triggering environmental issues and climate change. However, the shift towards renewable energy sources is rapidly increasing for a sustainable future. Renewable energy investments hold significant importance in this context in Turkey. The emphasis on renewable energy in Turkey’s energy policies offers great potential for environmental and economic sustainability.
Global Energy Demand and Renewable Energy Use
According to the “Global Electricity Review 2022” report by Ember, 2021 saw the highest energy demand in the last decade worldwide. 10% of this demand was met by renewable energy, marking a 5.4% increase in renewable energy usage. Additionally, 29% of the increase in energy demand was met by wind and solar energy. Turkey plays a significant role in this global trend and aims to increase energy independence by accelerating renewable energy investments.
Renewable Energy Usage Rates in Turkey
In 2022, Turkey’s electricity consumption decreased by 0.5% compared to the previous year, while electricity production decreased by 1.9%. According to the Ministry of Energy and Natural Resources, the expected levels of electricity consumption in Turkey according to the Turkey National Energy Plan are as follows:
- 380.2 TWh in 2025
- 455.3 TWh in 2030
- 510.5 TWh in 2035
You can see the ministry data on the resources used in electricity generation in the table below:
| Source of Production | 2022 (%) | 2023 (%) | Number of Production Plants |
|---|---|---|---|
| Coal | 34.6 | 20.6 | 68 |
| Natural Gas | 22.9 | 23.9 | 344 |
| Hydroelectric | 20.3 | 29.8 | 754 |
| Wind | 10.6 | 11 | 363 |
| Solar | 5.1 | 10.5 | 10,784 |
| Geothermal | 3.4 | 1.6 | 63 |
| Other Sources | 3 | 2.6 | 492 |
Source: Republic of Turkey Ministry of Energy and Natural Resources Reports
Renewable Energy Investments in Turkey
Turkey has a geographical advantage that allows it to invest in many renewable energy sources. The notable renewable energy sources in the country include hydroelectric, wind energy, solar energy, geothermal energy, and biomass. Particularly in the last decade, Turkey has tripled its electricity production from renewable energy sources, showing significant growth. This development is a result of Turkey’s energy policies being shaped around renewable energy. Until June 2023, the percentiles of Turkey’s energy investments are as follows:
| Type of Facility | Installed Capacity (MWe) | Investment (%) |
|---|---|---|
| Thermal | 35,550 | 10.71 |
| Hydroelectric Plants (HES) | 20,916 | 6.30 |
| Wind Energy (RES) | 159,375 | 48.00 |
| Biomass, Geothermal | 116,171 | 34.99 |
| Total | 332,012 | 100 |
Source: Republic of Turkey Ministry of Energy and Natural Resources Reports
Reasons for Renewable Energy Investments
The main motivations for the shift to renewable energy sources include social balance, environmental protection, and economic growth. The link between fossil fuel use and climate change directs countries and individuals to reduce their carbon footprint. The decrease in the costs of renewable energy technologies and the depletion of traditional energy sources increase interest in this field. Additionally, in line with sustainable development goals, renewable energy projects provide social and economic benefits.
Technological Developments in Renewable Energy Projects in Turkey
- Hydroelectric: Hydroelectric energy, which accounts for up to 30% of Turkey’s total renewable energy capacity, contributes significantly with large dams like Atatürk and Keban, as well as small plants. Turkey’s hydroelectric capacity has great potential due to geographical advantages and effective use of water resources.
- Wind Energy: With an installed capacity of over 11 GW, Turkey holds global significance in wind energy projects. The ideal conditions for wind energy along the Aegean and Mediterranean coasts reveal Turkey’s growth potential in wind energy. The wind energy sector in Turkey is supported by technology and infrastructure investments.
- Solar Energy: With a capacity of over 8 GW, Turkey ranks 11th globally. Both rooftop and grid-scale solar energy systems enhance Turkey’s solar energy potential. Solar energy installations are considered one of the most important renewable energy initiatives in the country.
- Geothermal Energy: With an installed capacity of over 1.7 GW, geothermal energy provides clean and reliable electricity in regions like Denizli and Afyonkarahisar. Turkey is increasing its capacity in geothermal energy through effective use and technological advancements.
- Biomass: Biomass energy plants utilizing agricultural waste and wood pellets contribute to renewable energy, especially around Çanakkale. Biomass energy combines waste management and energy production, providing environmental benefits.
Opportunities for Renewable Energy Investments in Turkey
Renewable energy investments offer advantages such as high return potential, green policies, rich resources, commitment to technological innovations, and increasing domestic demand. These investment opportunities make Turkey a significant attraction for renewable energy projects. Especially wind and solar energy installations offer great opportunities for investors.
- High Return Potential: With recent developments in the renewable energy sector, Turkey has the highest installation rate in Europe in 2023. The increase in wind and solar energy installations demonstrates the confidence of investors. The exponential growth seen in statistics means potentially lucrative returns for early market entrants.
- Green Policies: Turkey’s strong policies on renewable energy provide a stable and supportive environment for investors. These policies promote the sustainability and growth of renewable energy projects.
- Rich Resources: The wind conditions in the Aegean and Mediterranean, Konya’s floating solar energy plant, and Denizli’s geothermal energy complex showcase Turkey’s renewable energy potential. This diversity allows for risk reduction and portfolio diversification.
- Commitment to Technological Innovations: Turkey’s renewable energy projects adopt the latest technology. Innovative initiatives such as the tidal energy project developed in the Aegean also attract significant investment interest. Technological advancements increase the efficiency and sustainability of renewable energy projects.
- Increasing Domestic Demand: With rising energy costs and environmental awareness, Turkish citizens are increasingly turning to renewable energy. The increase in rooftop solar energy installations is one of the most important indicators of this trend. This tendency, which guarantees a market for renewable energy projects, makes it possible to make profitable investments in the long term.
- ESG Alignment: Renewable energy projects in Turkey are aligned with Environmental, Social, and Corporate Governance (ESG) standards. In addition to producing clean energy, these projects create employment and reduce dependence on fossil fuels, contributing to the country’s climate goals. These projects are ideal for investors seeking environmentally and socially responsible investments.
Challenges and Solution Strategies in the Renewable Energy Sector
Renewable energy sources face challenges such as variability, high upfront costs, integration difficulties with existing grids, and public perception. Various strategies can be developed to overcome these challenges:
- Variability and Grid Stability: The variable nature of solar and wind energy can create stability issues in energy production. Investing in solutions such as hydroelectric, batteries, and thermal storage is essential to address this issue. Additionally, smart grid technologies that can predict weather and integrate demand response can increase grid flexibility.
- High Upfront Costs: The initial costs of renewable energy projects are high. To reduce these costs, financial incentives such as government subsidies, guaranteed tariffs, and low-interest loans should be provided. Public-private partnerships can also share investment risks.
- Integration with Existing Grids: Integrating renewable energy sources into existing grids can pose challenges. Innovative grid solutions and advanced infrastructure investments are necessary to overcome these challenges. Regulatory frameworks should also be developed to facilitate the integration of renewable energy sources.
- Public Perception: Public awareness and acceptance of renewable energy projects should be increased. Educational and awareness campaigns can be organized in this regard. Communication strategies highlighting the environmental and economic benefits of renewable energy projects can garner public support.
- Financial Incentives and Credit Guarantees: Various financial incentives and credit guarantees can be offered to facilitate the financing of renewable energy projects. These incentives increase investors’ confidence in the projects and encourage renewable energy investments.
Future Prospects of Renewable Energy in Turkey
According to the “Overview of the Turkish Electricity Market 2023” report published by PricewaterhouseCoopers International, Turkey’s renewable energy capacity has significantly increased over the last decade. It is noted that the share of renewable energy in installed power reached 53% in 2023 and is expected to rise to 65% by 2035.
Turkey’s renewable energy projects will reduce both individual carbon footprints and contribute to the country’s energy independence. These projects represent significant steps towards a clean and green future. Additionally, renewable energy projects will reduce Turkey’s energy imports and increase the use of domestic energy sources.
Recommendations for Turkey’s Renewable Energy Future
- Policies and Regulations: It is important to continue policies and regulations that encourage renewable energy investments. Especially long-term energy policies will increase investors’ confidence.
- Technological Innovation: Innovation and R&D in renewable energy technologies should be supported. New technologies will increase energy efficiency and reduce costs.
- Public-Private Partnerships: Cooperation between the public and private sectors should be encouraged. These partnerships will facilitate the financing and implementation of large-scale renewable energy projects.
- Education and Awareness: The public should be educated and made aware of renewable energy. This awareness will increase the acceptance and support of renewable energy projects.
- International Cooperation: International cooperation and knowledge sharing will accelerate Turkey’s progress in renewable energy. International funds and projects can provide support for Turkey’s renewable energy projects.
