Forum for Foresight and Future Analysis in the Areas of International Politics and Global Issues
On Friday, September 19, 2014 an Expert Roundtable on ‘Turkish Energy Leadership, Europe and the Future of the Global Energy Order’ was held at Istanbul Policy Center, Downtown Office, Sabanci University, in Istanbul. The roundtable was organized in the context of the project Turkish Energy Leadership Foresight and convened by Mercator-IPC Fellow Jörn Richert.
The roundtable brought together leading figures from Turkish energy business, civil society, and academia. After a welcoming talk by Prof. Ahmet Evin from Sabanci University, the roundtable featured two sessions that focused on the Turkish position regarding fossil fuels and sustainable energy policies respectively. Participants discussed the performance of and opportunities for Turkish energy leadership. The roundtable concluded with a third session, in which participants drafted a list of energy policy priorities that Turkey should pursue.
The first speaker, Simone Tagliapietra from Fondazione Eni Enrico Mattei (FEEM), discussed if Turkey is or could become an energy transit country or an energy hub. Considering the location of Turkey at the intercept between energy producing and consuming countries, Mr. Tagliapietra claimed that Turkey already was a key part of oil transport from Russia, the Caspian Region and the Middle East to Europe and the world markets. With the upcoming construction of the Trans Anatolian Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP), furthermore, Turkey is developing into a key player in the transport of gas as well.
Mr. Tagliapietra added that, if the gas volumes transported through these pipelines could be expanded with gas from Israel or the Kurdish areas of Iraq, Turkey would develop into a major player in the gas sector. Hence, he concluded, Turkey can be called a key transit country in oil, and will soon be a major transit country in gas.
The question of an energy hub, however, remained disputed. As Mr. Tagliapietra pointed out, the Turkish debate is lacking a consensual definition of what being an energy hub implies. Two schools of thought offer differing opinions. The liberal school of thought identifies an energy hub as a country with a liberalized energy market and energy platforms. The realist school, in contrast, defines a hub simply with regards to the strategic position of being situated in the centre of energy transport. Mr. Tagliapietra concluded that without a common definition of an energy hub, it would remain impossible to determine if Turkey does or does not present one.
The next speaker, Erkan Erdoğdu, holding a Ph.D. degree from the University of Cambridge, currently serves as a Senior Energy Market Specialist at Energy Market Regulatory Authority of Turkey (EMRA). The views he presented, however, were those of his own as an academic and did not represent in any way the views of any institution he is affiliated with. Dr. Erdoğdu claimed that Turkey’s possibilities of energy leadership depend on three components: demand, supply and negotiable excess capacity. Dr. Erdoğdu argued that there is a high and increasing natural gas demand in Turkey and Europe. Supply options for gas, however, are diminishing. Because of political reasons and an already existing high dependency, Russia is not the first supply option for Europe and Turkey. The Middle East is becoming increasingly unpopular due to political and security issues. Only the Central Asian countries, especially Azerbaijan, remain reliable suppliers. Considering this situation, Dr. Erdoğdu argued that there are no excess natural gas capacities for the time being.
Dr. Erdoğdu identified five issues determining Turkey’s present and future leadership. First, he named possible conflict between receiving countries and Turkey, which wants to tax the gas in transit and buy at least 15% thereof at a ‘reasonable price’. Moreover, the fact that Turkey is using its strategic position against the EU with regards to the accession process or the opening of certain chapters might lead to further disagreements between the two parties. Third, so Dr. Erdoğdu claimed, the EU is trying to limit Turkey’s independent policies by imposing certain rules on the country in the form of directives and regulations. Fourth, Turkey’s recent plans to build nuclear power plants may render it less dependent on natural gas in the future and, therefore, Turkey may be less interested in taking a share of the gas transported through its territory and see natural gas trade more as a commercial activity. Finally, the close cooperation between Azerbaijan and Turkey limits the EU’s political power.
While Turkey has demonstrated independent policies in these areas, it lacks excess capacity, reliable institutions, infrastructure and transparent rules. Dr. Erdoğdu thus concluded that today Turkey might be more than a transit country, but it is less than an energy hub, through which independent gas transactions are fulfilled.
The third speaker of the day, Hasan Özkoç from the Delegation of the European Union to Turkey, spoke about the importance of the EU –Turkey energy cooperation. Before going into the details of Turkish/European relations, Mr. Özkoç outlined Europe’s energy strategies for 2020–2030 and 2050. While Europe’s demand for oil is projected to decrease, its demand for gas will remain nearly at current levels with only a slight increase. Hence, the Southern Gas Corridor, serving to transport energy from the Caspian region, Central Asia, the Middle East and the Eastern Mediterranean region through Turkey to Europe, will remain of great importance during the next decades.
For the European Union, so Mr. Özkoç argued, reducing transit risks, creating reliable energy flows, and improving the security situation in the region are the main objectives in this regard. The main challenges, so he claimed, are the same for Turkey and the EU. Both seek independence and security, which can only be obtained through a transparent legal framework in line with EU energy Directives. He furthermore claimed that the cooperation between Turkey and the EU could have many advantages for both sides. It could enhance the energy security on both sides and help Turkey develop its transit position. It could create investment opportunities and help create a regulatory energy framework in Turkey. Further, cooperation could enhance trade between the two parties and could foster technological innovation on both sides. Hence, cooperation would create multiple win-win situations.
The first speaker of the second session, Levent Kurnaz from Bosphorus University, analyzed Turkey’s sustainable energy potential and its interaction with future climate change. Prof. Kurnaz showed that the Turkish national climate change reports are not up-to-date. He criticized the Turkish government’s insufficient interest to research and tackle climate change. Furthermore, he argued that wind and solar energy have a lot of potential in Turkey.
Prof. Kurnaz furthermore highlighted that renewable energy potentials will be affected by future climate change. Particularly the solar energy potential will be increasing due to climate change, as Turkey is on average becoming warmer and sunnier. Similarly, the potential of wind energy will be increasing throughout the next years, albeit at a much smaller scale. Prof. Kurnaz identified a more critical situation in the case of hydropower that might suffer from changing precipitation patters. Prof. Kurnaz concluded that in all energy projects, no matter if they concern renewable or fossil energy, climate change needs to be considered in order to assess their feasibility and profitability in the future.
Jörn Richert, a Mercator-IPC Fellow, thereafter examined Turkey’s potential to translate sustainable energy policies into energy leadership. He argued that the discussion about Turkish energy leadership often sufferd from missing definitions of key terms. Building on the work of Joseph Nye, Dr. Richert defined leadership as a situation in which a leader helps a group of followers to achieve a common objective by the use of smart power.
He gave a short overview over leadership in the Southern Corridor and scrutinized Turkey’s future leadership options in relation to fossil fuels. In the latter regard, Dr. Richert argued that Turkey might aspire to become a transit power or an energy hub in the future. Both options, however, would not result in energy leadership. If Turkey developed into a transit power, it would generate mistrust on the side of Europe and lack the followers necessary for leadership. If Turkey acted as an energy hub, it would collect significant economic benefits. It would, however, have to remove politics and thus power from energy governance. Again, this would make leadership unlikely.
Dr. Richert then argued that Turkish leadership would be possible, if the country committed itself to sustainable energy policies. By making serious moves towards transforming its energy system, Turkey could combine the hard power of renewable energy potential with soft power and attractiveness of progressive policies. The European Union, China, as well as other emerging economies could support and follow Turkey as a sustainable energy leader among emerging economies. Dr. Richert stressed that such a strategy would be compatible and even reinforce Turkey’s strive to become an energy hub. He argued that reducing fossil fuel subsidies, creating efficient energy markets, reconsidering long-term energy planning and boosting Turkey’s renewable energy sector are ways to promote Turkey’s sustainable energy leadership in the future.
The last speaker of the day, Sibel Çetinkaya from Deloitte Turkey, elaborated on the business perspective of sustainable energy in Turkey. Ms. Çetinkaya argued that although the interest in renewables is high, only very few projects have actually been realized due to missing targets and a lack of feasibility. However, Ms. Çetinkaya hoped, new legislation would render the realization of sustainable energy projects more feasible.
Although Turkey has great potential, the share of renewables in its energy production has been very low. Despite great interest and business opportunities in solar energy, only two solar projects have been realized until today. Ms. Çetinkaya ascribed this mismatch to a couple of factors. Firstly, she claimed, most projects lack feasibility in terms of financing and technology. Furthermore, no viable energy efficiency or sustainability targets exist. Although Turkey has ratified the Kyoto Protocol, for instance, it has refrained from committing to targets and dates. Moreover, Ms. Çetinkaya argued, it was difficult to bring buyer and provider side together, rendering a successful exchange and project planning difficult.
In both sessions, presentations were followed by intense discussion among the participants. Based on these discussions, participants were asked to specify their top energy policy priorities for Turkey at the end of the event. The following list summarizes their suggestions.
Enhance short- and long-term strategic planning:
Create a transparent and stable investment environment:
Focus on domestic sustainable energy potentials:
Raise public awareness:
Re-invigorate partnership with the EU:
For more information on the project Turkish Energy Leadership Foresight see here. Authors: Mona Sachter Mona holds a BA degree in European Studies from Maastricht University and is currently working as an intern at Istanbul Policy Center, one of the leading political think tanks in Turkey. and Jörn Richert Pictures: Istanbul Policy Center.