World Energy Council Turkey brought together representatives of the energy and financial sectors on the event called “Turkey’s Energy Market Financing” in Istanbul. The half-day event, which featured a diverse set of international experts and energy sector leaders, was focused on two panels covering the subjects of Turkey’s “Financial Sustainability” and “Investment Opportunities in Energy Markets”.

The event was opened by Alparslan Bayraktar, Deputy Minister of Energy and Natural Resources (MENR) and Chair of World Energy Council Turkey. Bayraktar highlighted this success story is possible thanks to political stability, increasing demand and access to finance recalling Turkey is undertaking a major transformation in energy sector for the last 15 years. He noted that “Current levels of asset prices offers the opportunity to gain new entry into the market.”

World Energy Council Turkey Vice Chairman Kıvanç Zaimler managed the first panel “Financial Sustainability.” The panelists, Garanti Bank Deputy General Manager Ebru Edin, IFC Country Manager Arnaud Dupoizat, Akbank Deputy General Manager Levent Çelebioğlu and CEO of Bereket Energy Group İdris Küpeli shared their views with participants on cooperation opportunities in the finance and energy sectors.

The second panel of the day focused on “Investment Opportunities in Energy Markets” with the participation of distinguished guests from TSKB Project Finance Manager Tolga Kıral, EBRD Director for Turkey Arvid Tuerkner, Turkey Wealth Fund Deputy General Manager Çağatay Abraş and CEO of Kolin Energy Cantekin Dinçerler under the moderation of World Energy Council Turkey Secretary General  Mehmet Ertürk.

Download

On December 19th, the Atlantic Council IN TURKEY and the World Energy Council Turkey convened a high-level event on the outlook for renewable energy investment in Turkey.

The half-day event, which featured a diverse set of international experts and energy sector leaders, was focused on taking stock of Turkey’s experience to-date in deploying renewable energy, the efficacy and future evolution of policy frameworks, as well as new technologies and energy sector paradigms that are emerging around the world and how Turkey can best harness them to accelerate its energy transition.

The event was opened by Defne Arslan, Atlantic Council Turkey Representative, who highlighted Turkey’s strategic and economic imperative for developing renewable resources. Arslan’s remarks were followed by keynote remarks from Alparslan Bayraktar, Deputy Minister of Energy and Natural Resources (MENR) and Chair of World Energy Council Turkey. Bayraktar highlighted a series of mega-trends reshaping the energy sector, and outlined steps that Turkey is taking to ensure a successful energy transition. He noted that Turkey had initially responded to the changing global energy landscape by initiating an “energy transition 1.0” beginning in 2002, which was primarily focused on opening up the Turkish energy market, increasing competition, and driving new investment to meet burgeoning demand. This is now being followed, he said, by a new phase – “energy transition 2.0” – starting in 2017 with the National Energy and Mining Policy (NEMP), which builds on earlier efforts but places energy regulations and goals within a broader macroeconomic framework by incorporating elements such as security of supply, localization of value creation, and policy stability and predictability with a focus on renewable energy resources, energy efficiency and storage technologies.

The first panel, comprised of leading investors, project developers, and financial institution leaders working in the Turkish renewable energy sector, took stock of Turkey’s successes and challenges to date in attracting renewable energy investment, and identified priorities for future work by the public and private sector in the years ahead. Turkey has indeed been successful in jump-starting an impressive rate of renewable energy deployment from virtually nothing in only a few years, including via annual tenders for large-scale solar and wind projects (1 gigawatt each) under the so-called renewable energy resource zone (“YEKA”) system. However, a number of panelists highlighted that further work was needed to drive investment in small-scale, “unlicensed” renewable projects, to better balance ambitious local content requirements with a need to ensure international interest and competition in Turkey’s energy sector, and to drive innovation in financing mechanisms so that project finance does not bear the entire burden of supporting renewable investment in Turkey.

The second panel, comprised of international energy technology and policy experts, highlighted global energy trends, technologies, and perspectives that can help inform Turkey’s “energy transition 2.0”. These included lessons from Iceland in catalyzing broader economic development around geothermal resources parks, insights into the global financial community’s increasing attention to climate change in investment decisions, the latest developments in various energy storage technologies, and a discussion of how to manage the growth of electric vehicles in a way that creates synergies with the energy sector. All panelists agreed that Turkey’s prolific and diverse resource base puts it in a unique position to exercise leadership in the global energy transition, but that sustained political will, shrewd policymaking, and engagement with international best practices and experiences will be critical in realizing this potential.

Source: “AC Press Release”

Download

In the year 2040, more than half of the world’s energy will come from petrol and natural gas

“BP Energy Outlook 2018” report and future energy trends were discussed in the 3^rd WEC Talks organized jointly by the World Energy Council and BP at Ankara Sheraton Hotel. Participants shared astonishing information about the global energy consumption by 2040.

At September 18, 3^rd WEC (World Energy Council) Talks took place at Sheraton Hotel in Ankara with the participation of Alparslan BAYRAKTAR, Deputy Minister of Energy and Natural Resources and President of World Energy Council Turkey, Abdullah TANCAN, Deputy Minister of Energy and Natural Resources, Mustafa YILMAZ, EPDK (Energy Market Regulatory Authority) President, Mick STUMP, President of BP Turkey and William ZIMMERN, BP Group Head Economist. Participants discussed the increase and diversity of the energy demand, the energy types that will dominate the market by 2040, and the BP Energy Outlook 2018 report on the forces which will shape the global energy outlook until 2040 and the uncertainty surrounding this transformation.

Even the fast growth of electric automobiles doesn’t eliminate the demand for petrol

According to the BP Energy Outlook 2018 report presented by William ZIMMERN, BP Group Head Economist, electricity constitutes 70% of the energy demand increase.  The report measures the penetration of electricity into the transportation sector by taking into consideration both the number of electric vehicles and the utilization rate of each vehicle. As claimed by the Evolving Transition Scenario*, EV’s share in the global automobile market will reach 15% by 2040. This means nearly more than 300 million automobiles in a pool of 2 billion. But the mileage share of EV’s reaches 30% when the utilization rate of electrical private cars is factored in.

Renewable energy, which is expected to grow over 400% and to amount to more than 50% of the total energy production increase, is another conspicuous subject in the scenario. The idea that the fast growth of electric automobiles will cause the collapse of petrol demand is not supported by the basic numbers. Even though electricity is one of the energy types that will show a substantial increase, the experts expect that petrol and natural gas will continue to constitute more than half of the world energy. Even in a scenario where internal combustion engines are prohibited, and high levels of productivity are observed, the demand for petrol in 2040 will remain above today’s levels.

According to the transformation scenario in progress, carbon emission levels will show a 10% increase until 2040 due to the increased demand and consumption of energy. BP Energy Outlook 2018 report also investigates another scenario of “Faster Transformation” where the carbon emission levels decrease 50% by the year 2040.

Mick STUMP, President of BP Turkey; “The demand will continue to grow, and until 2040 the global energy demand will increase by one-third.”

Mick STUMP, President of BP Turkey, emphasized that the BP Energy Outlook 2018 report addresses a number of scenarios. He said “Global energy demand continues to grow. By 2040, one-fourth of the world’s energy demand will be supplied by the renewable sources, and petrol and natural gas will continue to constitute more than half of the world energy. We, both as BP and as the sector, prepare ourselves for the transformations in the energy industry by releasing reports every year. We are aware of Turkey’s strategic importance with regard to the transformations in energy. Turkey, as one of the fastest growing 20 economies of the world, is at the focal point of the world’s attention with its natural gas projects, one of the most important energy sources of the future. Today, Turkey remains an energy country, with its Fuel Oil, Mineral Oil and Aviation operations on a global scale and big energy projects such as TANAP (Trans Anatolian Natural Gas Pipeline) and BTC (Baku-Tbilisi-Ceyhan Pipeline). BP will continue to participate in such projects, and with new investments, we will carry forward our over-one-hundred-year-old presence in the Turkish market.”

Alparslan BAYRAKTAR, President of WEC Turkey; “An integrated and comprehensive approach is essential in the energy sector.”

Alparslan BAYRAKTAR emphasized the importance of medium- and long-term planning, as well as of an integrated and comprehensive approach in the energy sector. He said, “Essential elements of success in energy policies are continuity, definitiveness, and predictability in political aims. I would like to state that the vision we have created under the National Energy and Mineral Policy of the last term will continue as powerfully in the new term. We will prioritize, security of supply, naturalization, and market-oriented policies, in harmony with each other and with the changing market conditions. Fifteen years ago, Turkey took a critical decision to liberalize its energy markets and successfully completed the transformation. The new term presents challenges, but also opportunities. While planning and an integrated approach are paramount for our private sector stakeholders, the government must provide the flexibility required by the changes needed by the market.”

* Evolving Transition Scenario: A combination of projections assuming the necessities concerning the energy needs will rapidly increase in the near future just as it did in the near past, in view of the state policies, technology, and social preferences.

Source: “BP Press Release”

Details

Download

In the second of the WEC Talks, held in cooperation with Shell, Nebahat ALBAYRAK, Vice President of External Relations Integrated Gas and New Energies of Shell, was our speaker.

The event set off with opening addresses from WEC – TNC Chair Alparslan ALBAYRAK, Shell Turkey Country Chairman Ahmet ERDEM and Undersecretary to the Ministry of Energy and Natural Resoruces Fatih DÖNMEZ respectively.

Following BAYRAKTAR’s speech on our committee’s activities, ERDEM took the stage to talk about the transition period that the energy market is going through. He pointed out the advantages that cooperation could bring and remarked the importance of the platform that WEC Talks offers. Mentioning Shell’s “New Energies”, operating in 70 countries for more than a century, with a production of 3.7 million barrels a day, ERDEM also pointed out the role that falls to natural gas in elevating dependency on foreign import, which was set as one of the targets in National Energy and Mining Policy strategy.

DÖNMEZ, on the other hand, talked about Turkey’s energy market, highlighting LNG as one of the commodities that best reflect the developing technology in energy. Stressing supply security’s role in the National Energy and Mining Policy put forward by the Ministry, DÖNMEZ mentioned how the introduction of new floating storage and regasification units (FSRUs) has increased Turkey’s capacity and has made it possible for the demand to be met fully. With the possible increase in the number of terminals next year, an increase in capacity is possible for LNG, which delivers around 20% of the total gas demand, including increasing demand for CNG from public transportation in the cities. Lauded as a central tool for source diversification, LNG also has numerous researches being conducted to introduce it to shipping and railroad transportation and is likely to aid a green and a fiscally sound transition.

Some notes from ALBAYRAK’s presentation on Shell LNG Outlook 2018 are as follows:

• Hydrocarbons will hoard majority of its share in global energy. Rapid growth in demand will help hydrocarbons preserve their sizeable share.
• Currently, 1.1 billion people have no access to energy, with 1 billion more whose access is not reliable. The global energy demand is expected to double by 2070.
• Energy efficiency is central to our efforts to meet the growing energy demand with more generation but less emissions.
• Shale gas and new technologies rise as opportunities for the future.
• Shell has set a target to cut its emissions by half by 2050. It is critical to be in cooperation with all shareholders within this framework. New energies are not sufficient for achieving a decarbonised future, and that takes gas one step forward.
• Shell’s investments to oil and gas will continue, but the company has also reserved 2 billion $ for new energies. Examples of carbon capture and storage projects also exist in Australia.
• We believe on a source base, natural gas will lead the global energy demand growth with a 46% increase. From a sectoral point of view, 45% of the increase in demand for gas comes from electricity. Regionally, 38% of growth in natural gas demand comes from Asia, followed by North America at 33%.
• OECD countries lead both in energy demand and transition to natural gas and renewable energy. This increase in gas is reflected negatively in coal. While the opposite currently stands true in non-OECD countries, the trend is expected to reverse with China taking the initiative.
• Shell anticipates a boom in LNG demand and foresees the bulk of it coming from Asia. The demand in this region will double by 2035.
• While the uncertainty remains in the market, LNG possesses enough strength to withstand it.
• An unprecedented growth in capacity was achieved in 2017 – 45% of which has already been realized. This increase in capacity was foremost from Australia and America, other countries have also imported above estimates. Northern Asia leads in imports.
• LNG import has increased 29 million tonnes in 2017, with China as the leading importer. 15% increase in natural gas demand in the country was reflected in LNG as 50%. With more than 70.000 vehicles operating with LNG, the investments are made to all available fields and bears rapid fruits.
• South Korea follows China in LNG imports, with Turkey remaining third.
• FSRU offers a competitive setting with suitable units and contributes to supply demand.
• The demand for LNG will also increase in the transportation sector. Heavy vehicles will outdo in the short run.
• The lagging investment for the supply side threatens the future growth of LNG markets. Shell, therefore, expects the market to shrink towards the end of the 2020s. While no big impact is expected on pricing, investments are required to meet long term increases in demand.
• Transportation is the fastest growing field for LNG usage.
• Shell has purchased a start-up with around 40.000 – 45.000 charge stations.
• Smart charging is critical for its ability to balance the load in the energy system. There is technology available that cuts the charging period to just 5 – 6 minutes. Substantial advancements are being achieved through the ongoing dialogue with Toyota.
• Digital products and services are also available in the meantime. “Wonder Bill” collects all household bills and offers support in choosing the right supplier.

Download

Download Presentation

BİROL shared some of the striking findings from the World Energy Outlook 2017, the International Energy Agency’s annual output, and the world’s best-selling energy book, with the audience. Four major structural changes have been identified in the World Energy Outlook 2017 report:

The US has taken very important steps to become an unrivalled leader in oil and gas production. The country is becoming an important exporter with shale gas and shale oil revolution.

Solar energy costs have fallen dramatically. The cost of solar has halved between 2014-2017, and a similar decline is expected to take place by 2020. Solar energy continues to become an increasingly profitable source of energy for countries.

It has been observed that China, the world’s largest energy consumer, is making a major shift in its economic and energy policies. With the slogan of “Making the sky blue again”, China has moved from bearing the brunt of the manual labour of the world and now stands as a country with a clean energy leadership.

Electrification is the future of energy. Electricity demand growth increased by 60%, as opposed to 30% of total energy demand growth.

These changes underscore the need for countries to readdress their canned approach when it comes to energy security, energy costs, and environmental. Shifts can also be observed in the roles assumed by global actors. While the Middle Eastern countries remain the world’s most important producers, they have also set out to become important consumers. On the other hand, while the United States is the world’s most important importer, it is also becoming an important energy exporter.

When it comes to energy sources, the acceleration of the growth of coal and oil is expected to continue to decelerate in the coming years. Observations point to the fact that the growth rate for natural gas will continue to be maintained, but that this growth will largely be sustained by the industry and heating rather than electricity generation. The biggest growth among resources is expected to take place in renewable energy and nuclear.

China had a central place in the World Energy Outlook 2017 report. Over the past decade, the entire growth in coal has stemmed from China, and the subsequent air pollution has pushed for restrictive regulations. China has become a remarkable destabiliser in natural gas markets, singlehandedly increasing LNG imports 40% in 2017. The country has also become the world’s number one solar, wind, nuclear energy and electric car country, and now produces 6 of the world’s 10 solar panels as the country that has made the most profit in the big race among the countries on energy technologies.

It is expected that in the next 20 years, China will grow to add a USA to its current capacity, and that similarly, India is expected to invest as much as Europe in the same period. Therefore, the decisions that are to be made in Beijing and New Delhi carries a vital importance for the rest of the world. Whichever technology or source these countries will prefer to invest, will shift the system’s course accordingly.

Electric cars were among the hottest topics. There are 2 million electric cars in the world. Out of the total 1 billion vehicles, a total of 1 million is in China. The International Energy Agency expects the number of electric cars to increase rapidly and expects to the total number to reach 300 million by 2040. As a result of electric cars and increasing efficiency in conventional vehicles, oil demand is expected to fall. Consequently, the widespread use of electric cars makes it risky for many countries’ economies to be based on a single product. However, oil demand of trucks, planes and petrochemical plants is expected to continue to increase. In 2017, 35% of the oil demand growth came just from trucks in Asia.

It is estimated in oil and natural gas the US production continue to increase rapidly and will pass Saudi Arabia in oil and Russia in natural gas. Over the next 6 years, the gap between US and Russian production is expected to rise to over 30%. Despite its decision to withdraw from the Paris Climate Treaty, the biggest emission reduction in the world in 2017 occurred in the United States. It is expected that this trend will continue with the increasing wind and solar energy and shale gas.

60% of the natural gas is transported through pipelines and 40% by LNG. The share of LNG is predicted to be increasing significantly. The majority of this growth is expected to come from USA, Australia, Canada and East Africa. New gas exporters, like America, Canada and Australia, will emerge and gas importers like Turkey will have more options in the import source. Even if these countries are not planning to import LNG, retaining this option will be an important trump to achieve better prices in their existing contracts. While the number of importer countries in 2000 was 5, it is expected that this number will reach 50 in 2020.

The Earth’s temperature will increase by 3 degrees, even if all of the Paris commitments are fulfilled despite not being obligatory. Paris’ target was to keep this increase in temperature at most at 2 degrees. The solution lies in (1) energy efficiency, (2) natural gas, (3) solar energy and (4) electric vehicles. These targets can be reached by increasing the normal investments by 15%.

Whichever country manages to out step others in energy storage will have gained a significant advantage.

Nuclear is anticipated to play an important role. The International Energy Agency evaluates Japan’s Prime Minister Abe’s decision to return to nuclear as an extremely positive development. IEA believes nuclear to be a very important factor for countries like Turkey whose electricity demand is growing and will continue to grow.

To summarize, the World Energy Outlook 2017 report has the following results:

1. Developments in oil and natural gas in the US will affect everything and everything, including foreign policy.
2. Because natural gas is a flexible fuel, it will be an important tool for the environment.
3. China shook all energy markets in the past. It will shake it again with new energy technologies.
4. Sustainable development requires an international cooperation on energy access and air pollution along with climate change.
5. Electricity is expected to play a more important role. For the first time last year, electricity investments have surpassed oil and natural gas investments. Electricity should be considered interwoven with digitalization, and significant changes must be made in regulations, cyber security and similar fields.