Özgür Gürbüz-Perspectives/July 2013
For an ecologist, Turkey’s growth
strategy shows some very alarming numbers. Producers looking for markets will
be pleased with an economic mobility fed by consumption and Turkey’s domestic
demand, but those who see the growth in Turkey in a positive light are ignoring
the fact that in Turkey, audits and legal processes go unmanaged, sustainable
development is given lip service but never acted upon, individuals’ ideas and
suggestions fall on deaf ears, and social costs go unheeded. There are fresh
offerings to the god of growth every day: rivers, forests, clean air, and human
beings. Workers are killed at construction sites, rivers are blocked by dams,
shorelines and forests are distorted by construction. Ecologists and supporters
of market-focus growth might not be of the same mind most of the time, but both
groups converge on one crucial point: Are there enough sources of energy to
support Turkey’s economic growth? Or, as posed by an environmentalist:
Will the effects of this growth impact natural assets at an acceptable level or
not? In order to answer this question, it is important first to look at
Turkey’s current energy situation, and then to look at the estimated demands in
growth and energy
Dependence on external energy
sources
Turkey imports over 70% of its
energy.*1 One of the economic targets of the Justice and Development Party
(Adalet ve Kalkınma Partisi, or AKP) when they came into power was a major
increase in growth. But the AKP also wants to lessen Turkey’s dependency on
external sources for its domestic energy needs. The AKP’s desired increase in
economic growth has only been partially successful. In 2002 when they came to
power, Turkey depended on foreign sources for 69% of domestic energy needs; by
2010, this rate had increased to 73%. Turkey is dependent on foreign sources
for 98% of its natural gas and 92% of its petrol. New domestic explorations are
underway to make Turkey less dependent on foreign petrol sources, but there
hasn’t been any noteworthy activity to manage domestic demand. On the contrary,
policies supporting the construction of new highways, bridges, and private
vehicle ownership only promote petrol consumption. Turkey is decreasing its use
of natural gas in generating power and promoting the use of imported coal and
nuclear energy over imported natural gas. But the use of natural gas in private
households is widespread, and inadequate insulation in newly constructed
housing only serves to fuel the demand. In 2012, Turkey imported a record high
of 43 billion m³ of natural gas, up from 17 billion m³ in 2002. Even Deloitte’s
modest estimate indicated that by 2017 Turkey will import 50 to 60 billion m³
of natural gas per year.*2
Reducing dependence on imported
resources besides natural gas is essential, especially reducing the state’s
reliance on imported coal. In Turkey, 44% of domestic lignite pits are already
being used to generate power.*3 The Ministry is planning to harness the entire
potential of domestic coal to power the economy by 2023.*4 The ironic fact of
the matter, however, is that according to the Electricity Energy Market and
Supply Security Strategy Paper published in 2009, many natural resources –not just coal– will be entirely
consumed by the year 2023. Nevertheless, the Paper outlines the following
targets:
• Full use of hydroelectric
potential, technically and economically, for generating electricity by 2023.
• Increase of wind power installed
capacity to 20,000 megawatts by 2023.
• Maximized use of Turkey’s
600-megawatt geothermal electricity generation potential.
• All of which will result in the
reduction of the ratio of natural gas used in the total generation of power to
30%. (As of April 2012, natural gas comprised 47.1% of total power
generation.*5)
This strategic paper does not
mention any specific targets for solar energy or energy efficiency - both of
which would have been important in decreasing dependence on imported energy-
and coal, another imported resource, is given the green light. The same
government that plans to counteract its dependency on imported energy by
constructing a hydroelectric plant on every river in the country also approves
of imported coal; this ‘‘strategic’’ paper might not be so strategic after all.
The paper is also unable to answer the pressing question of how Turkey will be
able to shift to fully imported energy after the year 2023 when all of its
domestic resources have been consumed. If over the next decade the increasing
demand for energy does not slow, and if Turkey has indeed consumed all its
domestic resources by utilizing the full potential of its domestic coal and
hydroelectric energy sources by 2023 as planned, then it seems likely that
Turkey is headed for an energy gap. As it is, the government is adamant that
the demand for energy and growth will not slow.
The Target: To consume all domestic
resources in the next ten years
Turkey’s primary energy demand is
predicted to increase by 90% and reach 218 billion TOE (tons of oil equivalent)
by 2023, up from around 115 million TOE in 2011. In 2011, plans had the share
of natural gas in primary energy being reduced from 32% to 23%; coal, at a 31%
share of primary energy, is set to increase to 37%. According to the Ministry,
in 2023 the percentage of nuclear energy will rise to a 4% share of primary
energy, up from zero. Interestingly, hydroelectric (currently 4%) and other
renewable energy resources (currently 6%) are not set to change at all, as is
the case with petrol (2011: 27%; 2023, projected: 26%.) Even if this
paper’s targets are met and all the hydroelectric potential is tapped, it will
not effect a proportional change because overall demand will have doubled.
Obviously, the ‘‘strategic plan’’ is not interested in any radical moves
towards sustainability in Turkey. By 2023, a full 90% of Turkey’s primary
energy demands will be generated by non-renewable resources: coal, oil, and
nuclear. This figure includes the Ministry of Energy’s planned use of half of
the nation’s wind energy potential (48,000 megawatts*6) and the energy generated
by the hydroelectric plants constructed on almost every river in Turkey. The
government’s own data suggests that Turkey’s economic growth cannot be
sustained by domestic resources alone; almost all the ‘‘domestic resources
approved by the government’’ will be consumed within ten years.
Leaving aside environmental problems
that will be caused by the combustion of coal, oil, and nuclear energy for the
moment, the strategic plan doesn’t even provide any notable progress in making
Turkey less dependent on foreign energy sources. Almost all of the nuclear
energy, oil, and natural gas that will form 53% of 2023’s primary energy
generation will have to be imported. It is also important to note that the
nuclear fuel providers and operators of the planned nuclear plants will be
foreign companies. In addition, not all of the coal used in coal’s 37% share of
total generation will be domestic. In 2011, 10% of electric energy generated by
coal-burning power plants was generated with imported coal. New, planned
coal-burning power plants will add to the power generated by existing power
plants to generate even more electricity from coal in 2023. Today, power plants
running on imported coal with a total capacity of 6,000 megawatts are in the
process of review and evaluation from the Energy Market Regulatory Board in
anticipation of receiving their licenses. Taking into account the imported coal
and natural gas power plants that have applied for licensing, we can calculate
that Turkey’s foreign energy dependency is currently around 70% and that it
will not change much by 2023, despite the fact that the entire potential of
domestic coal and hydroelectrics will be generating energy.
The constantly increasing energy
demand
We have briefly summarized the
energy aspect of the government’s strategic targets and have discovered that
the results of such a strategy would not create a solid energy future for
Turkey. There is a close relationship between energy and growth. In an economy,
the measure of growth is defined as the increase in the production of goods and
services. The production of more goods and the providing of more services go hand
in hand with increased energy consumption. It is important to remember that the
consumption of energy itself supports growth. But, at the same time, there are
consequences and damage caused by the energy that is considered the fuel for
growth. Mines and energy power plants cause irreversible damage to the
environment and increase Turkey’s contribution to global climate change. Since
1990, greenhouse gases emitted by Turkey have increased 124%; Turkey’s
emissions rate of 5.7 tons per capita is above global average.*7 Even ignoring
environmental issues, we are still faced with questions: Can Turkey’s energy
resources support Turkey’s anticipated growth? How much, and in what ways does
Turkey want to grow? The answer to this question is also the answer to
the first; how much Turkey wants to grow determines if Turkey’s energy
resources will be sufficient or not.
Turkey’s 8.8% economic growth in
2011 is used as an example to other nations struggling with economic crises,
but it is still a country where the quality and sustainability of growth is in
dispute. Here the word sustainability has two meanings. The first includes an
evaluation on an environmental basis, which is often neglected in Turkey. The
second describes the consciousness of growth. Let’s look at the second definition
of sustainability first. Turkey has been growing for 13 successive quarters.*8
Growth rates year-to-year have varied, but overall there is definite growth.
The global economic crisis did not cause a serious financial bottleneck in the economy
of Turkey, but it has caused zigzags on growth charts. After the economic
crisis of 2001, the economy of Turkey slowed to a growth rate of 5.7%, and only
crawled up to 6.2% in 2002. Record growth over this 12-year period was in 2004
with 9.4% growth. In 2008, after a dip, there was hardly any progress with a
recorded 0.06% growth, followed by recession at -4.8% in 2009. After that
year’s recession there were two years of booming growth, which again slowed in
2012 to 2.2% growth. Every 7 or 8 years, the economy of Turkey seems to suffer
a financial bottleneck due to internal and external factors. Although its
growth is often compared to China’s, growth in Turkey is not growing
exponentially like it is in China. Turkey’s growth is marked by fits and starts,
but shows an overall increasing trend.
At first glance, it seems that
demand for energy grows in parallel with an increase in growth. In 2000-2011,
economic growth increased 4.36% overall, and the demand for electrical power
increased 5.6%. In 2004, 2005, and 2010, we saw the opposite trend: As growth
registered, respectively, 9.3%, 8.4%, and 9.2%, the rise in the consumption of
electricity remained 6.2%, 7.1%, and 7.8%, respectively. In 2007, when growth
was 4.7%, demand for electric power increased by 8.8%. The following year,
Turkey’s economic growth was not substantial (0.7%) but the demand for electricity
rose by 4.2%. Instead of insisting on a correlation, it seems wiser to talk
about a “lack of control.” Not only does this observation reject the idea
that there is a general increase in the demand for electricity, but it also
highlights the fact that it is difficult to use and illusionary to expect
domestic growth rates to estimate energy or electricity demand. An examination
of electrical power demand shows us how these estimates are misleading.
In 2005, the Turkish Electricity
Transmission Company (Türkiye Elektrik İletim Anonim Şirketi, abbreviated as
TEİAŞ) estimated that energy demand in 2001 would be 262 billion kilowatts per
hour. However, in 2011, Turkey’s electrical demand remained steady at 230
billion kilowatts per hour. TEİAŞ’s 2005 estimate was off the mark by 12%. Some
might say that with such a vibrant electric market, it is difficult to predict
even six years into the future, and that 12% is an acceptable rate of error.
But there is another example: According to its high-demand scenario, TEİAŞ’s
October 2010 capacity report estimated that that year’s electrical demands
would stay just below 220 billion kilowatts per hour, a forecasted annual
increase of 5%. However, the actual annual increase was 9%. Obviously, the
issue is not only the accurate estimate of electrical demand for the future,
but for the present. If demand is not managed in Turkey, then we will be forced
to continue attempting to solve the energy problem based on policies of supply.
Without access to unlimited energy resources, this will inevitably cause
difficulties in the financial and political arenas.
The Ministry of Energy and Natural
Resources’ estimates point to a continuous increase in already high rates of
energy demands. Both TEİAŞ scenarios insist on continuing with the same
operational scheme despite the miscalculations from the previous years. In the
scenario where the demand for electricity is low, the annual average increase
is expected to be 6.5%; in the high-demand scenario, the average expected
increase rises to 7.5%. This means that in 2020, the gross demand will be
between 400 and 433 billion kilowatts per hour. Considering that consumption in
2012 was around 240 kilowatts per hour, those figures would indicate a
significant increase in demand over the next eight years. The Ministry may not
give such things as solar energy or energy performance much consideration, but
not everyone is of the same mind. Necdet Pamir, Chairman of the Energy
Commission of the opposition Republican People’s Party (Cumhuriyet Halk
Partisi, or CHP) believes that Turkey has the potential to generate enough
power even for the high-demand scenario: "Last year Turkey consumed 241
billion kilowatts per hour of electricity. The fact is, our resources are at a
level capable of meeting an average of 7% growth. We have a potential 100
billion kilowatts per hour from hydroelectric power plants, 12 billion
kilowatts per hour from wind energy, 16 billion kilowatts per hour from
geothermal energy and 380 billion kilowatts per hour from solar power. There
are also 116 billion kilowatts per hour from lignite and 35 billion m³ from
biogas. So in total there are resources adding up to over 700 billion kilowatts
per hour. This is surely far over our consumption of 241 billion kilowatts per hour".*9
But the picture Pamir paints doesn’t
make environmentalists happy, either. For many environmentalists in Turkey, the
use of coal and hydroelectric power plants crosses a red line. The important
issue is how to solve the energy problem without depleting all potential energy
sources. This can only be achieved through questioning energy performance and
demand. The so-called necessity for growth that pushes Turkey to consume more
energy itself needs to be discussed. There should be specifications for which
energy-intensive industries should be active and which should not be allowed to
operate or be
capped.
The Ministry of Energy and Natural
Resources estimates point to an ever-increasing high demand for energy. This is
not a position that is particular to the government; often, it misguides those
–like investors– who don’t know Turkey in great detail. These estimates are the
expression of a desire; they do not actually reflect the indication that energy
demand will increase. Supporters of classical financial theories for Turkey’s
sustained growth are dreaming of great increases in the per capita GDP.
Executives in the energy sector who believe in the probability of increased
demand have prepared their own scenarios based on continuous demand. Perhaps
both sides have the wrong idea; neither has considered using energy more
efficiently and more sustainably through a low-rate increase or even decreasing
energy demand. Neither has considered an economy composed of using less energy
to attain the same per capita GDP goals instead of relying solely on the idea of
an economy composed of energy-intense sectors manufacturing products with
higher added value. Turkey’s demand estimates have not –at least no yet–
reflected this idea. Germany, for example, produced 100 units of per capita GDP
by consuming 100 units of energy in 1990; in 2010, it produced 131 units of per
capita GDP by consuming 94 units of energy. The efficient use of energy has a
great role in this achievement.*10
Turkey has a lot of work to do in
energy efficiency. In order to achieve an increase of €1000 per capita GDP,
Turkey must consume an equivalent of 233 kilograms of petrol. The same economic
growth is achieved with the equivalent of 147 kilograms in Greece, 80 in
Switzerland, 141 in Germany, 123 in Italy, and 92 in Ireland.*11 Put in
different terms, Turkey consumes 2 to 3 times more energy than many countries
in Europe to produce the same product or to provide the same service. Even more
disheartening, while the rest of the world is trying to find new ways to use
energy more efficiently, Turkey has shown no development in this regard since
1990. In that year, Turkey consumed 242 kilograms of petrol to add €1000 to the
per capita GDP. In European countries whose economies are similar to Turkey’s,
there has been a marked change towards using energy in a more intelligent
manner; Turkey has not followed suit.
The secret to producing more with
less energy lies in the choices made in transportation, production, housing,
and industry. When more efficient machinery is used, when buildings are
insulated and public transportation is developed, the demand for energy
decreases, thus allowing for demand management. If we can manage the demand and
use of energy in an efficient way, there may be no need to construct the many
power plants that are currently underway, and economic growth could be realized
while consuming less energy.
Consumption as the source of growth in Turkey
We know that domestic demand
contributes greatly to growth in Turkey, so it is not surprising that the
present government would be encouraging a population boom.*12 If individual
consumption decreases, growth comes to a halt. An increase in population contributes
to growth through the corresponding increase in demand for consumer goods and
services. Despite its current population of 75 million, the government of the
Republic of Turkey is preparing a stimulus package for families with multiple
children. There is more reason for the government to act now because of the
anticipated decrease in population after 2050.
According to 2013 statistics, the
average number of children per woman in Turkey is two. If the downward trend
continues, Turkey’s population is expected to reach 84.24 million in 2023. The
population will peak at 93 million in 2050 before it begins to dip. In 2023,
the elderly (65 years and older) population is expected to reach 8.3 million,
or 10% of the total population. In 2075, the elderly population will constitute
an estimated 27% of the total.*13 Perhaps Prime Minister Erdoğan’s assertion
that families should have at least three children has as its foundation in the
fact that the elderly population will not be able to sustain domestic demand. Erdoğan
should not be concerned about the 2075 proportion of the elderly to the total
population, whose percentages are comparable to current rates in Europe. On the
contrary, he should be worried that the Turkish economy - without any
structural change - will be dependent on domestic demand for growth even 60
years from today. In many European countries - Sweden, Portugal, the United
Kingdom, Austria, and Finland, for example - the elderly already constitutes
27% of the total population.*14 Turkey’s booming construction industry, and its
activated commerce and transport sectors might well be the reasons behind the
government’s support of families with many children, but ecologically it is not
sustainable as a comparison between Turkey’s biological capacity and its
ecological footprint will tell us. In Turkey, the ecological footprint of per
person consumption is 2.7 global hectares; that is over 50% of the global
biological capacity. In other words, if everyone in the world consumed as much
as a citizen of Turkey, we would need 1.5 planets. The most striking data from
“Turkey’s Ecological Footprint,” a report compiled by the WWF and the Global
Footprint Network, is as follows: Despite the stability of the
Ecological Footprint per capita in Turkey, the footprint of consumption has
increased 150% in total. The main reason for this increase is the great
population increase that occurred from 1961 to 2007.*15
Considering that the individual
consumption rate hasn’t changed over the long term and that consumption increased
with the population increase (although those born in the 2000s tend to consume
more than those born in the 1960s) it is understandable why families in Turkey
–a country where consumption means growth– need to have more children to
sustain it. But understanding alone will surely not help Turkey reduce
ecological damage.
Other data presented in the report
is even more important. In the 1990s, Turkey was able to keep its ecological
footprint and its biological capacity in line, but since 2002 its ecological
footprint has been growing rapidly and since 2006 its biological capacity has
been decreasing.*16 We must evaluate the realization of the AKP’s growth
policies since their rise to power in 2002 with the subsequent increase in
Turkey’s ecological footprint as well as the decrease in its biological
capacity; Turkey’s growth policies aren’t only increasing energy consumption;
they are laying the foundations for ecological problems.
The very idea that this growth
policy and the excessive energy consumption that goes with it can be supported
by domestic resources alone must be called into question. Although it is
possible to have a balanced economy with only imported energy, like South
Korea, it wouldn’t be possible without exporting a large quantity of higher
added value products. There is another way for Turkey and for other countries.
Rather than trying to meet limitless consumption with limited resources, Turkey
could limit its consumption and allow the manufacture of primary products or
put caps on the arms industry.
One might find this too radical as a
suggestion. However, global temperatures could go up 1.5-2.5 degrees Celsius,
causing the extinction of various species of plants and animals. Now let’s ask
ourselves again: Is it really radical to suggest that we control the use of
resources expended on the production of luxury automobiles and combat
aircrafts?
Footnotes
*1.
In the 2010-2014 Strategic Plan of the Ministry of Energy and Natural Resources
of the Republic of Turkey this rate is announced as 73%, p: 22.
*2.
Turkey’s Natural Gas Market: Expectations and Developments 2012, Deloitte, p:
18.
*3.
Strategic Plan of the Ministry of Energy and Natural Resources of the Republic
of Turkey, 2010-2014: p: 24.
*4.
Ministry of Energy and Natural Resources of the Republic of Turkey Annual
Budget Presentation for 2013, p: 70.
*5.
Ministry of Energy and Natural Resources of the Republic of Turkey, An Outlook
on Energy in Turkey and in the World Presentation, transparency 19.
*6.
This data was last viewed on May 12, 2013 at
http://www.enerji.gov.tr/index.php?dil=tr&sf=webpages&b=ruzgar&bn=231&hn=&nm=384
&id=40696. 48,000 mw indicates the installed capacity of units constructed
in regions with winds of over 7 m/s.
*7.
TÜİK, Inventory of the Emission of Greenhouse Gases, 1990-2011.
*8.
This data was last viewed on May 12, 2013 at
http://www.bloomberght.com/haberler/haber/1329715-turkiye-2012de--2-2-buyudu.
*9.
“We have the energy potential to meet seven per cent growth,” Dünya Newspaper.
This data was last viewed on May 12, 2013 at
http://www.dunya.com/yuzde-7-buyumeyi-karsilayacak-enerji-potansiyeline-sahibiz-187752h-p2.htm
.
*10.
Climate Protection and Growth, Federal Ministry for the Environment, Nature
Conservation and Nuclear Safety, p: 13.
*11.
Eurostat data for 2010, May 21, 2013.
*12.
Growth and Structural Problems in the Economy of Turkey, BETAM Research Notes,
edited by Prof. Dr. Seyfettin Gürsel.
*13.
TÜİK, Population Projections 2013-2075, February 14, 2013.
*14.
Eurostat, Projected Old-Age Dependency Ratio.
*15.
Turkey’s Ecological Footprint, WWF Turkey and the Global Footprint Network, p:
7.
*16. Turkey’s Ecological
Footprint, WWF Turkey and the Global Footprint Network, diagram 9.
