Winds of change
November 1, 2011
Turkey’s economy is booming. New buildings and factories are springing up with companies everywhere from Istanbul to the traditionally agricultural region of central Anatolia investing and exporting as if there were no tomorrow.
According to the "Invest in Turkey" agency, the country is among the fastest expanding economies in Europe. Growth reached some nine percent in 2010 - double that of other European countries – and secured Turkey 17th place in the World Bank's table of leading global economies.
Higher standards of living and a stronger domestic market have earned the country the title "Anatolian Tiger."
But that is not the whole picture, because economic growth leads to greater energy needs, and Turkey's have become so great - eight percent annually in recent years – that power cuts have become the order of the day.
Turkey's electricity prices are already the highest in Europe and are unaffordable for much of the population. Many Turks are therefore left with no choice but to park their tractors and saddle their donkeys.
In 2008, the Anatolian work animals became luxury goods in themselves, with the "Zaman" daily paper claiming they had gone up in price from 26 to 180 euros.
Vicious circle
Longer term, the high energy costs don't only stand to drive up the price of mules, but could also slow down the economic growth Turkey has worked so hard to achieve. According to an International Energy Agency (IEA) study, the country with one foot in Europe and one foot in Asia, currently has to import almost all the energy it consumes.
In order to cut its reliance on large energy-rich nations such as Russia and Iran, Turkey is working towards greater fuel generation autonomy by investing not just in coal and nuclear power production, but also in renewables.
Although the long-term benefits of cleaner sources of energy are self-evident, the shift towards them is costly. The Turkish government estimates that it will need to investment around 85 billion euros by 2020 in the energy sector. It’s therefore focusing on further privatizing and liberalizing the energy market.
Legal incentives
At the beginning of 201, the Turkish government passed a law on renewable energy to facilitate new investment in the country and make it more profitable. It fixes electricity prices until 2015, guaranteeing water and wind power companies 5.5 cents per kilowatt- hour.
Ralf Peters, spokesman for wind turbine manufacturer Nordex, which has been exporting to Turkey for several years and consider itself market leader there, says it is an incentive.
“It creates a sense of security for investors,” Peters told Deutsche Welle.
What's more, companies that use Turkish-made components for their facilities receive additional subsidies, because Ankara is keen to advance economic development through the construction of new factories and creation of new jobs.
A sector in its infancy
Turkey is second only to Mexico in terms of growth in the wind power. By the end of 2009, growth had reached 130 percent. Just one year later, facilities across the country were generating some 1,9 gigawatts of power.
Yet for all the progress, Turkey still has a long way to go to catch up with other states that have been using the clean technology for longer.
Statistics from the World Wind Energy Association (WWEA) say that Germany, for example, produced more than 27 gigawatts in the same time period.
Perfect conditions
Fortunately for Turkey, it has a lot of coastal regions where windy conditions could be harnessed and put to good use. Ralf Peters says Turkey has everything it needs to make a success of the sustainable energy source.
“The average annual capacity is around 23 percent, but in Turkey it could be as high as 40 percent,” he said, adding that such a prognosis makes the country attractive for investors.
One such place is the wind park on the Gallipoli peninsula, which is supported by the Myclimate NGO, and which supplies energy to the national grid.
With such projects around the country, Turkey's renewable energy market could grow at a formidable pace, and it might not be long before the trusty Anatolian mule can finally sit back and put its hooves up.
Author: Michaela Führer (tkw)
Editor: Sonia Phalnikar