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Energy
Policies of Turkey During the Period 1923–2003
A. Osman Yılmaz and Tuncay Uslu
aDepartment of Mining Engineering,
Karadeniz Technical University, 61080 Trabzon,
Turkey
Abstract
Turkey has been developing since the foundation of
the Republic of Turkey in 1923. Turkish Government
played a leading role in energy production and in
energy use, as well as in other fields, and
implemented several policies to increase electricity
production. By 1950s, thermal power plants were used
commonly in electricity production. In the following
years, hydroelectric power plants were put into
operation in order to use the considerable amount of
water resources of the country. Coal-fired power
plants using national resources accounted for 70–80%
of the thermal electricity production. After 1960s,
oil, an imported resource, was replaced with
national resources due to two petroleum crises.
Therefore, the proportion of use of lignite in the
energy field increased. By 1980s, energy production
lead by the government went on. Afterwards,
applications of liberal economy policies resulted in
implementation of different energy production
methods, and the country had a increasing tendency
to meet energy demand by imports as a result of
improvement in international economic relations.
Natural gas became prevalent in the country as well
as all over the world and accounted for 45% of the
electricity production in 2003. In this paper,
implemented policies in the energy field during
different periods since the foundation of the
Republic of Turkey in 1923 was investigated.
Keywords:
Energy; Energy policies of Turkey; Energy outlook of
Turkey
Energy policies
Turkey's energy policies since 1923, can be
discussed under five periods with respect to
differences in the policies: Post-independency
(1923–1930), first wave of industrialization
(1930–1950), post-war mixed economy (1950–1960),
planned mixed economy (1960–1980) and privatization
and modernization (1980–2003). Implemented policies
and their effects on energy production and
consumption were investigated below.
The period 1923–1930
Fundamentals of the policies implemented during this
period was determined in İzmir Economy Congress, in
1923. Liberal economy system was tried to be set up
by making decisions in the congress. Only the
government was authorized for petroleum exploration
and production by the laws made in 1926. “Privileged
companies policy” about electricity, inherited from
Ottoman Time, was not changed and went on by 1930
The power plant with the capacity of 2 kW, located
in Tarsus, became the first meeting of Turkey with
electricity production. During the period 1923–1930,
of all power plants, the number of hard coal-fired
power plant, diesel-fired power plant, natural
gas-fired power plant, steam-engined power plant,
and hydroelectric power plant was, 3, 27, 4, 3 and
11, respectively. In 1923, total installed capacity
and electricity production was 33 MW and 45 GWh,
respectively. In 1930, installed capacity,
electricity production, per capita electricity
production and per capita electricity consumption
were 74.8 MW, 106.3 GWh, 7.36 kWh and 6.2 kWh,
respectively. The average installed capacity for the
period 1923–1930 was 52 MW, 98% of which was
constituted by thermal power plants While national
product increased at a rate of 9.7%, growth rate of
electricity production and growth rate of installed
capacity was 14.2% and 14.1%, respectively. Per
capita installed capacity was 14.8 W/person.
Economic crisis in Turkey, started in 1926 and
intensified in 1929 in parallel with the world
economic crisis, increased the inflation and
electricity prices significantly
The period 1930–1950
In the first and second industrialization plans
prepared for the years 1933–1942 in order to
increase the electricity production, to decrease the
import dependency of production and to save money,
it was reported that the industrialization could be
possible by obtaining low-priced energy, and
hydraulic and fossil energy resources should be
explorated. In the second industrialization plan,
the issues such as mining operations, petroleum
exploration and production, coal-based synthetic
fuel production and electricity power plants were
included. The death of Atatürk who is the founder of
the Republic of Turkey, and the start of World War
II impeded the implementation of the plan. During
this period, coal producer foreign companies were
nationalized, and public enterprises such as
Directorate of mineral research exploration (MTA),
Etibank, Petrol Ofisi, and Electricity Surveys
Administration (EIEI) were established. In 1940, the
first petroleum productive well was drilled
in the Raman Oil Field by MTA
After World War II, a new development plan was
prepared in 1945, and energy projects of Etibank
were started to be carried out. In 1950s, coal-fired
power plants constructed and operated by Etibank,
hyraulic power plants constructed and operated by
İller Bankası, diesel-fired power plants constructed
and operated by several industry establishments and
municipalities, were used for electricity
production. The installed capacity reached 407.8 MW,
electricity production reached 789.5 GWh, per capita
electricity production reached 38 kWh, and per
capita electricity consumption reached 32 kWh.
However, the proportion of the population able to
use electricity was 23%. Average installed capacity
for the period 1930–1950 was 212 MW, 97% of which
was constituted by thermal power plants. In this
period, growth rate of national product decreased by
2.9%, growth rate of electricity production and
growth rate of installed capacity was realized 10.7%
and 9%, respectively. Per capita installed capacity
reached 11.7 W/person increasing by 143%
The period 1950–1960
Economic policy of the period 1950–1960 was based on
mixed economy and encouragement of private sector
and foreign investors. However, the policy could not
be implemented successfully. Public sector developed
rather than private one. The most important issues
in the period were World Energy Conference held in
1949 and First Energy Congress held by Turkish
National Committee in 1953. In the First Energy
Congress, the following decisions were made
1. Large and regional coal-fired power plants and
hydroelectric power plants would be constructed
rather than small and domestic diesel-fired power
plants.
2. All country would be able to use electricity by
regional power plants to be constructed and
connected to the electricity network extending into
all regions.
3. Electricity production and distribution works
would be monopolized and run by Turkey Electricity
Authority (TEK).
During the period 1950–1960, electricity production
and consumption in Turkey increased in parallel with
economic development and industrialization.
Tuncbilek and Soma coal-fired power plants were
constructed and started operation in 1956 and 1957,
respectively. Turkish Coal Enterprises (TKİ),
established in 1957, took over the coal mining
operations from Etibank. In 1960, hard coal and
lignite production reached 3.6×106 and
4.1×106 tons, respectively. The share of
the private sector in lignite production increased
from 17% in 1950 to 40% in 1960. In 1954, state
monopoly in petroleum exploration and production was
abandoned. In 1960, national petroleum production
was 363×103 tons, 97% of which belonged
to National Oil and Gas Company of Turkey (TPAO).
The important property of this period is the
constitution of private sector corporations
excluding foreign capital in
electricity operations. Besides thermal power
plants, hydroelectric power plants were concentrated
on in electricity production. In 1953, General
Directory of State Hydraulic Works (DSI) was
established in order to construct large dams.
Thermal installed capacity, 389.9 MW in 1950,
reached 860.5 MW in 1960 increasing by 120%,
hydraulic installed capacity, 17.9 MW in 1950,
reached 411.9 MW in 1960. Total installed capacity
reached 1272.4 MW, the share of thermal power plants
in installed capacity reduced to 82% In 1960,
electricity production and per capita annual
consumption reached 2815.1 GWh and 86 kWh,
respectively. The proportion of the population able
to use electricity reached 31.6%. Economic growth,
growth rate of electricity production and growth
rate of installed capacity realized 6.4%, 13.6% and
12.6%, respectively. Per capita installed capacity
reached 31.2 W/person increasing 2.6-fold when
compared with the previous period
The period 1960–1980
In accordance with the Turkish Constitution, the
period 1960–1980 became a period in which mixed
economy policy dominated by the state was
implemented, planned development was started and
improved. In 1963, Turkey underwent the planned
development period. In the first planned period
(1963–1967) and second planned period (1968–1972) it
was aimed that efficient use of the power plants
would be increased and hydraulic energy resources
would be evaluated. In the third planning period
(1973–1977), state-control energy policy was
adopted. Seyitomer and Hopa thermal power plants
started operation in 1973. Keban hydroelectric power
plant and Aliağa thermal power plant started
operation in 1974 and in 1975, respectively.
However, energy demand could not be met sufficiently
in the third planning period. Primary energy
resources such as coal and water could not be
evaluated as much as required and, petroleum
production could not be increased. Therefore, the
country faced difficult situations in the energy
field. In the fourth planned period, it was aimed
that 53% of total energy consumption would be met by
primary energy resources. However, during the
planned periods, growth rate of energy production
decreased despite the increase in energy
consumption. At the end of 1977, import dependency
in energy was 50%
Energy investments which require high capital and
profits in the long term, were realized by the
state. Accordingly, the share of the private sector
remained limited. Since energy investments,
important income for manufacturing industry, could
not catch up with the manufacturing industry
investments, the country had difficulties in meeting
the energy demand
Economic growth, growth rate of primary energy
production and growth rate of primary energy
consumption during planned periods in the years
1963–2005 are given in As seen from, the growth in
primary energy consumption has been greater than the
growth in primary energy production leading to a
widening energy shortage. In addition, especially in
the second and in the third planned periods, delayed
energy investments made the energy shortage larger
despite rapid growth in the manufacturing industry
investments
The period 1980–2003
The period after 1980 can be seen as the time in
which state-controlled economy was
replaced with liberal economy Compatible with a
liberal policies followed by the governments, public
investments, including electricity investments, have
been gradually cut down to decrease the public share
in the economy. In addition, the government
initiated some legal arrangements to attract the
private investors to the economy. Electricity
production and distribution works, defined as
strategic and fundamental public services by Turkish
Constitution Court, were included in the scope of
privatization. While present public enterprises and
plants were tried to be transferred to private
sector by using different methods such as “Transfer
of Operation Rights” and “Sale of Property”, new
investments were aimed to be realized by private
sector under the models “build–operate” and
“build–operate–transfer” Although, the fledgling
private sector eventually developed muscle,
state-owned enterprises still accounted for a
substantial portion of assets in Turkey, in the
electric power sector. In common with many other
countries, however, these enterprises—referred to
collectively below as the public domain or the
public sector—were prone to mismanagement and
eventually ceased to be economically viable. Efforts
at privatization have so far proved insufficient.
The enormous investments demanded by the electricity
sector leave the state little choice but to continue
financing power system expansions, creating a
vicious circle that cannot be broken, since the
whole point of privatization was to move away from
state funding and/or participation in the economy.
Therefore, the solution has been to bring in foreign
investments through the “build–operate” and
“build–operate–transfer” models
After the second half of the 1980s, it was observed
that the country had an increasing tendency to meet
energy demand from imported resources. After 1987,
the policy of realization of thermal power plants
projects by private sector began to be implemented.
Therefore, public sector investments decreased, new
projects of lignite-fired power plants were
cancelled, the share of imported resources in
meeting energy demand increased The running of hard
coal production works was taken away from TEK. In
1983, new “Petroleum Law” was made in order to
encourage the petroleum exploration. In 1984, the
monopoly of Turkish Electricity Authority came to an
end by a law. In 1993 Turkish Electricity Authority
was divided into two public companies named Turkish
Electricity Generation and Transmission Company
(TEDAS) and Turkish Electricity Distribution Company
(TEAS) by decision of Coincil of Ministers
During the period 1980–2003, electricity production
reached 73,665 GWh and installed capacity reached
18 246 MW. Average increase in gross national
product, in electricity production and in installed
capacity was 4%, 8.2%, and 9%, respectively. Per
capita installed capacity reached 300 W/person.
While thermal power plants had a primary share of
57% in total installed capacity, hydroelectric and
other power plants had a share of 43%. After 1998,
the share of thermal power plants increased
significantly
The share of lignite-fired power plants in
electricity production, 42% in 1985, decreased to
16.8% in 2003. In the same period, the share of
natural gas-fired power plants constructed by
private sector under “build–operate” model,
increased from 17% to 45.2%. The share of
electricity produced by hydroelectric power plants
reduced from 35% to 25.1%. Turkey became a country
60% of whose electricity was produced by using
natural gas Since 1987 natural gas started to
acquire a share in the energy resources Natural gas
consumption has been the fastest growing primary
energy source in the country. Turkey's natural gas
consumption has started with 0.5 bcm (billion cubic
meters) in 1987 and rapidly reached 16 bcm, by
increasing 31.24 times in 2001. It is expected for
this quantity to reach 43 bcm in 2005, 55 bcm in
2010 and 82 bcm in 2020. Turkey has several projects
about natural gas usage in Turkey, and its transport
to Europe
In 2003, almost whole country has been connected to
electricity. Nevertheless, the demand could not be
met completely. Total primary energy production and
energy consumption were 23.8 and 83.8 mtoe,
respectively. The ratio of production to consumption
reduced to 28%. Turkey has become a country which
heavily depends on other countries in the energy
field Total installed capacity was 35,587 MW, the
share of resources was 35% by hydraulic, 55% by
thermal and 9% by others. Total electricity
production was 140 TWh, per capita net electricity
consumption was 1581 KWh that is equivalent to 67%
of the world average.
Conclusion
Energy policies of Turkey as of 1923–2003 changed
continuously and showed contradictions from time to
time. At first, hard coal as a national resource had
a major role in energy production, then petroleum,
an imported resource, came to the fore. Petroleum
crises experienced between 1973 and 1979 brought
about the perception of the importance of national
energy sources. Therefore, lignite having large
reserves in Turkey became primary resource. After
1990s, the country turned to imported resources
again, natural gas took place with increasing
proportion in energy production.
Recently, Turkey has not taken notice of the
importance of energy based on national resources.
Undervaluing of energy supply reliability threats
the fundamentals of sustainable development of the
country seriously. It is obvious that Turkey will
face problems in meeting energy demand in the
future. In order to meet the demand reliably,
significant increases will be needed both in energy
production and in supply in coming years. It is
necessary for Turkey to meet energy demand with
national resources. Exploration of new coal and
petroleum deposits in the country should be
increased, new technologies should be used for
efficient energy production, special importance
should be given for utilization of renewable energy
resources and construction plans of nuclear power
plants should be realized as soon as possible
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