Opinion

The Time Is Now: U.S. Investment In Turkey’s Renewable Industry

Few industries can liberate or control entire economies and whole regions as strongly as the energy sector. Turkey is the key link between the European Union and Asia, and its increased investment in renewable energy is critical for the region’s energy stability and to its continued partnership with the United States.

According to Bloomberg New Energy Finance, Turkey imports more than 60 percent of its natural gas via pipelines from Russia, Iran and Azerbaijan. By 2018, the new Trans-Anatolian Pipeline will add significantly to this capacity. Turkey needs this new energy capacity urgently – the country’s electricity demand is expected to almost double in the next 10 years. Instead of meeting this need with increased reliance on expensive foreign oil, the United States should work with Turkey to significantly expand investments in Turkey’s renewable industry. This will help subdue Turkey’s ties to Russia and Iran, and bolster the U.S. relationship with our most critical ally in the Middle East.

In February, the Turkish government took an initial step toward a more reliable energy policy with its National Renewable Energy Action Plan. In partnership with the European Bank for Reconstruction and Development (ERBD), Turkey has set a goal to develop 30 percent of its total installed capacity from renewable sources by 2023. Turkey’s plan includes adding 34 GW of hydropower, 20 GW of wind energy, 5 GW of solar energy, 1 GW of geothermal and 1 GW of biomass to its national energy infrastructure. In addition, Turkey aims to have 10 percent of its transport sector needs met by renewable energy by the 2023 target. This plan to increase the country’s renewable energy resources opens the door for the U.S. and Turkey to work together more frequently, and on larger projects.

The U.S. Department of Energy has already partnered with Turkey on the Near Zero Zone project in Izmir, Turkey. With the support of GE Ecoimagination, Shaw Group and Johnson Controls, this pilot program uses energy efficiency technology to identify areas for Turkish companies to optimize energy use. Also, just a few years ago, GE began a 530MW project with Turkish MetCap Energy Investments in Karaman, Turkey. This project includes 22MW of wind and 50 MW of eSolar “power tower” using GE’s FlexEfficiency turbine technology. At the time, GE called this Turkish power plant the first “integrated renewables combined cycle” system. Both of these projects represent the kind of U.S.-Turkey business partnerships that grow the country’s renewable industry and meet soaring energy needs, which the Turkish government has already estimated to require investments worth approximately $120 billion.

Since 2009, the ERBD has invested nearly $5.6 billion in a variety of Turkish infrastructure projects – including direct co-financing of two of the largest wind farms in Turkey. But this is not enough to meet the need. Still, Turkey will require more financing, commitments from friendly governments and partnerships with other companies.

U.S. companies should take advantage of these opportunities now, while costs are so low. A recent International Renewable Energy Agency (IRENA) report discovered that solar PV module costs fell 75 percent since the end of 2009 and the cost of electricity from utility-scale solar PV dropped 50 percent since 2010. A new report from Deutsche Bank echoed these findings and predicted that the cost to generate power through solar will drop by another 40 percent over the next three to four years.

It’s clear that Turkish renewable resources are an attractive, long-term investment for U.S companies. With an aggressive renewable energy policy and more U.S. partnerships, Turkey can secure financing for new projects, increase its energy independence, and build a sustainable energy economy for years to come. The National Renewable Energy Action Plan is a fine start, but it cannot be the only move toward a stronger, greener, energy economy. The time to start planning for energy stability in the Middle East is now, and it starts with investment in Turkey.

 

 

Metehan Oguz is on the Turkish Heritage Organization Board of Trustees and is President and CEO of Oguz Consulting

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