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Turkey's Post-CoVid-19 Sustainable Growth of Its Economy With Energy Transition - Dr. Değer Saygın

The global economy is facing a new era of turmoil with the impacts of the CoVid-19 pandemic continuing. Countries are implementing new measures to recover their economies and create motives for growth. As for the rest of the world, the design of new strategies that are in line with its national priorities is becoming important for Turkey to continue to grow its economy. A national recovery strategy that takes energy transition and green investments at its core could provide new opportunities for Turkey to limit the potential adverse economic and trade impacts of emerging green deals that favor industrial competitiveness and climate change mitigation and to strengthen its negotiation capacity at international climate discussions.

Transformation of the power system is crucial as it accounts for nearly 40 percent of Turkey’s total greenhouse gas emissions. The uptake of low-carbon technologies such as renewable power and energy efficiency has gained momentum in recent years highlighting Turkey’s progress in the global headlines. Accelerated deployment of these investments and expanding transition towards electrification could help alleviate the impacts of CoVid-19, thereby ensuring the long-term competitiveness of Turkey’s economy.

Studies undertaken by the SHURA Energy Transition Center over the past three years show a viable transformation pathway for Turkey’s power system. By 2030, Turkey could supply more than half of its electricity demand from renewables, with a notable 30 percent share from wind and solar energy. The growth in Turkey’s electricity demand could be limited to on average 3 percent per year in the coming decade by investing in the energy efficiency of the entire power system value chain from supply to end uses as a continuation of Turkey’s ambitious National Energy Efficiency Action Plan. There is a significant electrification potential for heating and transport sectors integrated with renewable power. For instance, at least 2.5 million electric passenger vehicles and 1 million charging points can be deployed by 2030 with negligible impacts on the costs and operation of the distribution grids. Turkey’s potential of around 15-gigawatt distributed renewable energy resources could play a crucial role in supplying the needed electricity. Digitalization, smart grids, and flexibility will ensure smooth management of a more renewable, distributed, and efficient power system. Innovation will need to expand towards new market design, market-based policy mechanisms, and innovative financing tools and business models. Enabling this by 2030 would create an investment opportunity of around US$12 billion per year on average in the coming decade.

The CoVid-19 period offers a historical opportunity to integrate such a transformative investment pathway to Turkey’s economic recovery strategies. The benefits that can be gained from energy transition, such as reducing the current account deficit, increasing value-added, creation of new employment areas, and reducing the adverse environmental effects of fossil fuel use, are in line with Turkey’s overall objectives, which are addressed by relief, recovery, and reform packages. In the design of these strategies, it will be important to set short-term measures that comply with and can enable the pathway towards a long-term transformation of Turkey’s energy system.

Transition to a low-carbon pathway can increase economic activity and create new employment whilst reduce greenhouse gas emissions towards Turkey’s efforts to contribute to global climate change mitigation. At the same time, the energy transition will reduce the economic impacts of energy imports that have a share of around 70% in total primary supply for nearly two decades. In particular, as a local resource, improving energy efficiency could have a transformative impact that can provide immediate benefits on new employment and creation of technology value-added. Indeed, it takes time to realize the economic and environmental impacts of the energy transition, but, in the short and medium-term, it will give the urgently needed market signals to investors and financiers for a predictable environment to accelerate investments in low-carbon technologies. Such a pathway will also provide benefits to update Turkey’s existing climate plans that build on the country’s success of renewable energy and energy efficiency in recent years, and that consider the rapid changes in the costs of low-carbon technologies.

The abundant availability of local renewable energy and energy efficiency resources, the manufacturing and business development capacity, the young workforce, and flexible business practices of Turkey provide the needed advantages to make this transformation possible and reap its benefits to sustainably grow the country’s economy in the post-CoVid-19 period.


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