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Energy and
Renewable Energy Sources

Energy and Renewable Energy Sources

Turkey has become one of the fastest growing energy markets in the last 15 years due to its economic growth. Thanks to the success of a privatization program launched since 2002, the power supply has now been wholly owned by private companies, while the privatization of power generation plants is expected to be completed in the coming years. This has given the country's energy sector a highly competitive structure and opened up new growth prospects.

Economic growth, a rise in per capita income, positive demographic trends and the fast pace of urbanization were the main driving forces behind energy demand, which is projected to increase to about 6% per year by 2023. To meet the country's growing demand, the current installed capacity of 80 GW, through further investment by the private sector, is expected to reach 120 GW by 2023. As part of its efforts to provide consumers with sustainable and reliable energy, Turkey offers investors attractive incentives such as feed-in tariffs, purchase guarantees, connection priorities, exemption licenses, etc., depending on the type and capacity of the power generation plant.

Over the past 15 years, the Turkish government has made major energy-related reforms. Turkey has promoted the involvement of private companies, thereby creating a more competitive energy market. The privatization of energy generation facilities, coupled with a strategy to pave the way for more private investment, has led to an increase in the share of private companies in the power generation sector from 32 percent in 2002 to 75 percent in 2017. Another step taken by the Turkish government towards a more competitive energy sector is the creation of the energy capital company EXIST, which manages and operates energy markets, including electricity and gas supplies.

In addition to its vast domestic market, Turkey is strategically located between a number of major energy consumers and producers, serving as a regional energy hub. Existing and planned oil and gas pipelines, critical Turkish straits and promising hydrocarbon reservoirs in the country give Turkey more leeway over energy prices and support its role as a regional hub.

Possibilities for renewable forms of energy production - water, wind, solar and geothermal energy - are abundant in Turkey and it is anticipated that supportive legislation, along with favorable feed-in tariffs, will increase their share of the national electricity grid in the coming years. The Turkish government has made it a priority to increase the share of renewable energy sources in the total installed capacity of the country to an impressive 30 percent by 2023. At the same time, the government has committed to energy efficiency. Legislation on energy saving measures at private and corporate level is being passed and incentives for energy-efficient investments offered. For example, in 2016, the Turkish government introduced the new YEKA (Renewable Energy Resource Zone) model to commission large-scale renewable energy projects through the use of locally produced components in renewable energy power plants. As part of this model, the largest solar energy auction in the country's history took place on March 20, 2017, and a similar tender for 1 GW wind power plants with local manufacturing and R & D requirements took place in August 2017.

Just as important as renewable energy in the Turkish energy strategy in the coming years, technologies in such areas as waste recycling and greenhouse gas reduction are often collectively identified as crucial additional important practices with this new form of energy generation. Preserving the environment through the use of renewable energy will be accompanied by a series of measures and arrangements that have either entered into force or will soon enter into force. Some of these regulations relate to lowering carbon emissions, increasing power generation and transmission efficiency, and promoting the use of waste recycling technologies.

The sum of these factors has transformed Turkey's energy sector and made it one of the most attractive investment locations in the world. Due to the implementation of investor-friendly laws and the large increase in demand, the Turkish energy industry is becoming more dynamic and competitive, attracting the attention of an increasing number of investors to each component of value .

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