January 25, 2014 ,Last year we consumed total of 245 billion kW-hours of electricity in Turkey. Turkish electricity generation grew around 6% compared to the previous year. Dependence on imported fossil fuels was around 71-72%. Our total expenditure on fossil fuels imported in the current account deficit was around $60 billion in 2013. By the end of 2013, our installed capacity had reached 64.044 MWe. Peak (maximum) demand was 39,000 MWe in last August. This peak (maximum) demand was our prime concern when it came to satisfying the local market without interruption. Increasing the installed capacity is not enough. Because we have different availability hours and
different capacity factors on each power generation plants depending on sources of water, wind, solar, and fuel supply. In 2013 a total of 157 new private sector power plants were put into operation, a total of 4,329 MW of additional capacity was added. Of the total installed power output, 66% is generated by the private sector. Our rate of 50% dependence on natural gas in 2012 fell to 44% last year. Renewable energy sources include channel or river-type hydro power plants, wind farms, solar plants, and biomass power plants. Hydro power plants with man-made lakes larger than 15 km2 are not termed “renewable”. This year we are experiencing a severe drought. Snow-rain precipitation has not been received yet. We consume clean reservoir waters very wastefully. Agricultural lands have unnecessary irrigation practices. Wetlands have shrunk. We operate fossil fuel-firing thermal power plants that cover almost 85% of our total electricity generation capacity, and whose CO2 stack gas emissions are constantly increasing. Due to our rapidly-growing energy needs for our industries as well as household consumption, we have difficulties in enacting restrictions to reduce fossil fuel
usage. We have to consume our local lignite at a reasonable rate to reduce our dependence on imported fossil fuel. On the other hand, our total CO2 emissions as well as dust dissipations are increased by fossil fuel firing in our existing thermal power plants. That is also due to old technologies employed without CO2 reductions and the low capacities of dust-collecting precipitators. Due to our continuous and rapidly growing need for more energy, we have difficulties in putting restrictions on thermal power plant operations. We can not stop operating thermal power plants. We can not stop investing in them. We can only try to reduce the rate of growth in our fossil fuel dependence. All in all, we must give more importance to our renewable energy resources. We have running spring water in our rivers for hydro power plants, we have more powerful sunshine than our European rivals so we
can generate more electricity in our solar panels, we have strong winds on three sides of our seashores to generate electricity from wind farms—all of it free of charge, for the price of installation and negligible operating and maintenance expenses. For each 1-Mwe electricity generation from fossil fuel-firing thermal power plants, we have CO2 stack emissions which take almost 120,000 trees to be converted into O2. This year we have an ongoing drought with less and less rain. The water in our reservoirs can only generate 30% of the installed capacity at our hydro power plants. Reservoirs are not the answer to our immediate water requirements. Storage is not a cheap solution. Reservoirs are costly to build, and not so efficient in electricity
generation. Our interconnected power line network is not powerful enough for the electricity generated. New, better, more powerful interconnecting power lines are needed. Peak electricity generation is different in different power plants. Renewable energies are scattered. The cost is high. Your author is opposed to investment incentives since they always lead to abuse in practice all around the world. Enhancing the incentives is an unnecessary cost added to the electricity price and passed on to the end user. When incentives are requested they are secured most of the time, though they are always misused. Bureaucratic procedures for investment incentives are tiresome, complicated, long, and insufficient. They require lots of unnecessary paperwork. When you submit the necessary paperwork, you get the incentive in time. There is no screening. The rejection rate is very low. Our public administrators were prepared to have some delay in realizing renewable energy investments. They expected the first installment costs to lower price levels in the market. Prices were high due to R&D costs. The costs would go to the R&D expenses of foreign suppliers. Now we feel that prevailing market prices are down to reasonable levels in international markets. Local production is also possible. We still need more investments in interconnecting high-voltage transmission lines in order to make them available to scattered power plants in remote regions. Now, the first installment costs at renewable power plant have been dropped. The unit prices of renewable energy from wind and solar are coming close to the electricity prices generated from conventional fossil fuel-firing thermal power plants. Domestic manufacturing facilities for wind and solar are increasing in number. Wind turbine towers and propellers are being manufactured locally. Domestically-manufactured PV panels for solar energy can be produced in 17 plants. Previously, there was no funding, almost no incentive for renewable energy investment. Since public administrators felt that the prices were too high it was not good timing to initiate renewable energy investments. Now, we foresee that we are ready to manufacture hydraulic equipment to cover all our hydraulic potential in 5-10 years with a high share of domestic production. The share of electricity costs per kWe-hour which go to the government
are too high. That is also an extra cost to the end user. That figure is fixed via competitive tendering, but prices that high make the projects not so feasible in the long term. The rate of return on the investments and repayments are difficult. The public has a general feeling that the “private sector makes the best calculations in investments. They have the right thinking at all times when it comes to making new investments.” That is not always true. Private sector investors also make mistakes in their calculations. They make random spending decisions under a herd instinct, in line with others, as in the latest fashion trends. Projects may not pay for themselves within reasonable time periods. Tough competition can make final projects unreasonably costly or not feasible, all due to miscalculations. For wind energy investments, public authorities require two years of field measurements. That is reasonable. The same is required for solar energy investments, which is totally unreasonable, as for solar energy you can calculate the expected energy generation with the latitude-longitude coordinates of the location. Two years of field measurements for solar energy are unnecessary. That is an unnecessary burden on solar energy investments. We presume that public administrations require serious investors to pay a certain, serious lump-sum of money upfront. Serious companies pay that cost; the others are eliminated. All the required documents and paperwork are also unnecessary. Who will read them? We have also another application of cheap local production, license-free, inefficient, hot water-collecting solar panels. With some more investment, we can produce better quality PV panels to generate electricity. Hot water generators are also good for local household needs for hot water, in order to reduce fossil fuel expenditures. Earlier renewable investments were expensive, their electricity generation unit prices were high. Most of them were installed in remote regions—on mountains, far from the main high-voltage transmission lines. These have been updated. Prices have been reduced to affordable levels, local production facilities have been created. Instead of direct incentives for first installments, public authorities now put a reasonable investment in electricity generation. There is now a guaranteed purchase price of $.055 per kWh renewable electricity which could be raised to $0.22 per kWh if local content is high. Renewable energy investments have hurdles to overcome in site selection, predetermined energy resources if it is wind or solar, legal rules and regulations, and guaranteed sales prices—all of which should always be taken into consideration prior to investment
decisions. In the business environment, we focus on solving problems, not creating new ones. We need to reduce our current account deficit. We need to reduce the intake of imported fossil fuels. We should make more long-term investments in renewable energy and we need to increase domestic manufacturing.By Haluk Direskeneli – Eurasia Review
