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Energy Prices, Consumption, and Policies (EN)
- 1. PRICES, CONSUMPTION, andPOLICIES BARıŞ SANLı DEPUTY DIRECTOR GENERAL FOR ENERGY AFFAIRS MINISTRY OF ENERGY AND NATURAL RESOURCES September 9, 2014 MENA Knowledge Sharing and How-‐To in Subsidy Reform: Regional Workshop
- 2. Year 1980 :The prime suspect for electricity cuts is… TV broadcasJng Jme will be limited to 2.5 or 3 hours According to a research, the Turkish films during the week days are the prime reason for excessive power. Therefore, during the week days , Turkish films 2 will not be shown.
- 3. A Brief History * 2013 yılı sonu değerleri 2014 Resource Installed Capacity (MW) Share (%) Genera?on (TWh) Coal Hydro Share in Genera?on (%) NaturalGas 25,538 38 104,8 44 Hydro 23,299 34 59,2 25 Lignite 8,566 13 30.0 13 Imported Coal 4,862 7 31.4 13 Renewable 3,819 6 8.8 4 Other 1,354 2 5,1 2 Total 67,431 100 239,3 100 2002 Resource Installed Capacity (MW) Share (%) Genera?on (TWh) Share in Genera?on (%) NaturalGas 9.702 31 52,5 41 Hydro 12.241 38 33,7 26 Lignite 6.959 22 28,0 22 Imported Coal 480 1 4,1 3 Renewable 33.9 0 0,2 0 Other 2.761 8 10,9 8 Total 31.846 100 129,4 100 3 Natural Gas 2001: Electricity State Periods Market Law
- 4. Turkish policy makerstried several models • TEK (Turkish version of EDF) • Chronic financial problems, long construcJon Jmes, inefficient operaJon • BO/BOT (Özal model Built-‐Own/Built-‐Own-‐Transfer) • High tariffs (accelerated returns) • ToOR for exisJng plants • Electricity Market Model in 2001 • Eliminate cross subsidies • Transparent price formaJon • But you have lots of contracts in hand with purchasing guarantees?
- 5. How to understand«Market» * • Market is not something to believe in • An insJtuJon seperaJng poliJcs and economics increasing visibility for long term investments (like electricity investments) • Turkish electricity market law (4628 and now 6446 by 2013) • Clearly defines procedures to enter market (No Ministry) • Procedures are Jme limited and need technical reasons to reject • An independent Commission -‐> EMRA/EPDK • Govt promised not make any new generaJon investments and leave it to private sector * My interpretaJon
- 6. When you havelots of hydro, prepare for drought • In 2007, there was a drought, hydro levels were not good • The thej raJos were high • Need to save electricity for the summer • Should Govt make investment???? A interesEng idea to distribute (free of charge) Energy Efficient Light Bulb to high theM regions. They were given to school kids accompanying a brief educaEon for benefits for environment
- 7. And…….. • They broke it (may be not much) • Reason: Conspiracy Theory «There is a bugging device in the bulb» Needs careful study of a policy design
- 8. Back to drawingboard –Demand Dynamics Electricity consumpJon • (with Istanbul) • (without Istanbul)
- 9. Turkish Demand Dynamics • When it is hot (+8000 MW) • When it is cold (+4000 MW)
- 10. Demand = LifeAc?vity 38,000 36,000 34,000 32,000 30,000 28,000 26,000 24,000 30,000 27,000 24,000 21,000 18,000 15,000 Friday Prayers 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 MW 30 Mart 2014 Pazar 23 Mart 2014 Pazar 38,000 36,000 34,000 32,000 30,000 28,000 26,000 24,000 22,000 35,000 30,000 25,000 20,000 15,000 10,000 Ramadan 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 MW 15 Ekim 2013 Salı 8 Ekim 2013 Salı 2600 MW 15500 MW 11000 MW 8000 MW Election Days Eids 22,000 1 3 5 7 9 11 13 15 17 19 21 23 MW 11 Temmuz 2013 Perşembe 12 Temmuz 2013 Cuma 20,000 1 3 5 7 9 11 13 15 17 19 21 23 MW 08 Temmuz 2013 Pazartesi 09 Temmuz 2013 Salı 10
- 11. And Natural GasDemand In 15 days, large ciJes’ demand increased to 3 folds. 250 200 150 100 50 0 Milyon m3 Elektrik Konut Sanayi Industry House Electricity As households increase consumpJon there is less gas available for Electricity & Industry In summer very liole household consumpJon 11 70 60 50 40 30 20 10 0 mcm İstanbul Ankara Bursa
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- 13. Finding the differencebetween • «can’t pay» and «won’t pay» Registered Employment Thej RaJo
- 14. Social Aids andThe^ Thej in City’s consumpJon and PopulaJon benefiJng from Social aids Thej % Social aid %
- 15. Demand Side –Targe?ng Audiences • EducaJon programs for Kids and Woman • www.enerjihanim.com and City tours (for Ladies) • www.enerjicocuk.org for kids and cartoons • For Industry • hop://www.enerjiverimlisanayi.com/ • Govt targets for efficiency gains • Missing: no eff. For agriculture?
- 16. Prices • Price levels are important • No subsidies for building isolaJon but… • Finance resources – Bank credits • Run by NGO • Switch from Gasoline to Diesel and smaller car • High taxes for >1600cc • High taxes for fuels (2.32$/liter gasoline, 2.06$/liter diesel) • You can forget educaJon programs but you can not forget prices!
- 17. Supply Side –Market Mechanism & Renewables • Day Ahead Market based on CompeJJon • It started as a spot market – A window of opportunity for private investors to sell their electricity in a market dominated by State • If you can not beat the market price, you reJre your inefficient plant • Market first opJmized : • Shortest Jme for cash flow generaJon=> Nat Gas Plants • As compeJJon intensified: • Most efficient => Nat Gas Plant • Cheaper resources => Imported Coal • DomesJc resources => Wind, hydro
- 18. Turkish Power Prices101 18 BO/BOT/ToOR Renewables (wind at 25% cap) Merit Order Most Probably new NG plants
- 19. The Increase ofWind Power 19
- 20. Prices deflated ?No wind / Wind (3000 MW) 20 Price : 200 TL/MWh (69 €) Price : 186 TL/MWh (64 €) SJll the price is formed by natural gas plant but what is the efficiency?
- 21. Conclusion • Electricity Market • Power • Capacity • CompeJJon brings efficiency • But sezng targets is important • PoliJcs-‐free insJtuJons are important • When asked: Everyone is poor, but who is at the booom? (StaJsJcal Analysis)
- 22. Thank you Barış Sanlı www.barissanli.com