11

* Agata Hinc is Managing Director at

demosEUROPA – Centre for European

Strategy. The author would like to thank

Maria Wilczek and Ksenia Szelachowska for

their assistance in preparing this paper.

Agata Hinc*

The growing potential Why should Poland strengthen its cooperation with Turkey in the field of energy?

Warsaw, November 2013

In recent years, energy security and with it energy policy have become,

among other, top priorities of Poland. In the need to diversify both its inter-

nal energy mix as well as the routs of energy supplies Poland has to cooper-

ate with its partners within the European Union and the United States, and

it also has to look for new potential partners for cooperation in the field of

energy. Turkey is definitely one of the countries Poland should seek more

cooperation with. Poland and Turkey share few challenges in the field of

energy security. Both rely on external supplies when it comes to natural gas

and crude oil (they are net importers of these resources). In the case of both

countries coal plays a dominant role in energy mix. What is more, Poland

and Turkey need to upgrade and diversify their energy capacity, base load

and power sector assets. These similarities along with Turkey’s geostrategic

importance, significance of its economy and growing role of the country both

in the region and globally, are more than enough reasons why Poland should

seek more cooperation with Turkey in the field of energy.

2

Turkey – a growing power

The impressive economic potential of Turkey is an attribute of its natural

and demographic resources. According to the 2013 world factbook, Turkey’s

population has reached 80 million (17th largest in the world) and the country

shares a 8000 km coastline with the Black, Mediterranean and Aegean seas,

as well as strategic access to the Turkish straits (Bosporus, Sea of Marmara,

Dardanelles).1 Turkey’s is positioned on key regional transit and trade routes

with access to markets worth $25 trillion of GDP and 1.5 billion customers in

Europe, Eurasia, the Middle East and North Africa.2

With a GDP/ PPP of $1.142 trillion in 2012, Turkey’s economy ranks 17th in

the world, and the 6th in Europe. Since 2002 economic growth averaged 5%,

with a slump in 2009 and a rebound in 2010. Per capita income tripled to

more than $10,000. However, it should be noted that the foundations of such

growth are fragile. As credit-fuelled domestic consumption rose at an unsus-

tainable pace, the overheating of the economy is now taking its toll in the rising

current account deficit to a record $78.4 billion, or 10% of GDP. This deficit is

largely sustained by volatile, short-term investment – hot money. Such invest-

ment has been threatened by the regional political instability and the heavy-

handed response to the Gezi protest. They remain vulnerable due to lingering

rigidities of the labour market, a large informal sector and monetary instability.

The benchmark Istanbul stock index has fallen to a third of its peak value in

May this year.3 Institutional weaknesses include an inefficient judicial system

that is too often subject to political interference and high corruption.4

However, the notable strengths of its economy lie in Prime Minister Recep

Tayyip Erdoğan’s pro-market approach and reforms for business and financial

competitiveness. According to Heritage Foundation’s 2013 “Index of Economic

Freedom”, Turkey’s economy is labelled as “moderately free” in the four main

aspects of: rule of law (property rights, freedom from corruption), limited

government (fiscal freedom, government spending), regulatory efficiency (busi-

ness freedom, labour freedom, monetary freedom) and open markets (trade

freedom, investment freedom, financial freedom). Ranking 69th in world,

Turkey is ranks much lower than most EU member states, yet substantially

higher than most of its closest neighbours, such as Greece (117th) and Russia

(139th).5 Thus, if the Turkish economy is to benefit from the impressive GDP

growth of the last decade, it will have to regain investor confidence by address-

ing the excessive bureaucracy and frequent changes in the legal and regula-

tory environment to increase its share of FDI in the GDP. The stock value of FDI

stood at $117 billion at year-end 2012, with 70% coming from the EU and over

$5 billion from the US. Investment into Turkey’s promising manufacturing and

energy sectors may pick up speed again with a US-EU economic recovery.6

On the international arena, Ankara holds a seat at the Organization for

Security and Cooperation in Europe, WTO, OECD, the Council of Europe and

the Organisation of Islamic Conferences. Turkey joined the UN in 1945, NATO

1 „Middle East: Turkey.” The World Factbook. CIA,

23 Sept. 2013. Web. 5 Sept. 2013.

2 „Invest in Turkey.” Investment Support and

Promotion Agency. The Republic of Turkey

Prime Ministry, n.d. Web. 16 Sept. 2013.

3 Parkinson, Joe, and Emre Peker. „Turkey’s

Economy Suffers Blows from Inside and Out.”

The Wall Street Journal. The Wall Street Journal,

6 Sept. 2013. Web. 9 Sept. 2013.

4 Dixon, Hugo. „Turkey’s economy is vulner-

able.” Reuters Blog. Reuters, 17 June 2013.

Web. 4 Sept. 2013.

5 „Turkey Economy: Population, GDP, Inflation,

Business, Trade, FDI, Corruption.” Conservative

Policy Research and Analysis. Heritage Founda-

tion, n.d. Web. 5 Sept. 2013.

6 „Turkey Economy: Population, GDP, Inflation,

Business, Trade, FDI, Corruption.” Conservative

Policy Research and Analysis. Heritage Founda-

tion, n.d. Web. 5 Sept. 2013.

3

in 1952 and became an associate member of the European Community in

1964.7 Moreover, as a member of the G20, it is for years outspoken in the ar-

eas of macroeconomic stability mechanisms, trade liberalisation and regional

development where Turkey’s official development assistance has already sur-

passed $2.5 billion. Turkey now looks forward to its G20 presidency in 2015.8

Turkey has the potential to act as a stabilising force in the politics of the region.

Turkey borders a troubled Syria, a growingly assertive Iran, divided neighbours

concerning the Israel-Palestine conflict, the strained Azerbaijan-Armenia

relationship and the conflicts springing up in North Africa. The United States

is becoming less of a predictably stable force in the destabilised region. Thus,

in a divisive neighbourhood, Turkey’s strategy has been a successful balancing

act. On the one hand, Turkey has avoided radicalization, which would lose its

pioneering image as a Muslim democracy. On the other hand, Turkey has also

managed to keep a strategic partnership with the US without getting its hands

dirty. Denying the US army transit for the invasion of Iraq, yet still facilitat-

ing flow of US supplies to Iraq and Afghanistan through the Incirlik airbase

serves as an example. Turkey’s strategy has been stressing its assertiveness

and independence in minor situations, balanced with passive subordination

to stronger partners in others. Thus Turkey remains perhaps the most stable

pied-a-terre for the West in an unstable region. Not to forget, Turkey has the

most powerful army in the region, and the second largest force in NATO. All

in all, as the situation in the Middle East, Caucuses and North Africa becomes

less certain, the strategic importance of Turkey will rise.9

In the last decade Turkey’s foreign policy has also concentrated on develop-

ing a growing presence in its closest neighbourhood through soft power of

diplomacy and business. Turkey’s exports to the MENA region have increased

seven-fold to $31bn in the period between 2001 and 2008. Noteworthy

amounts of Turkish exports go to Iraq (7.1%), Iran (6.5%) and UAE (5.4%)10. As

for imports, Turkey is a leading energy importer from the region, with annual

imports of over $60bn of oil and gas. Turkish infrastructural construction

projects (roads, bridges, buildings, airports) ranking second in the world by

volume, have reached a net value of $80 billion in the MENA region.11

Foreign Affairs minister Ahmet Davutoğlu suggests moving away from being

a Cold War barrier between the East and West, towards an active multidi-

rectional foreign policy - “strategic depth”.12 Recep Tayyip Erdoğan’s mildly

Islamist Justice and Development Party (AKP) government has seen an

unprecedented rise in popularity amongst Arab nations. Ankara’s show of

Muslim solidarity in the post-Arab Spring environment has been manifest in

areas of financial assistance to Egypt, Tunisia and Libya, as well as judiciary

and police force training projects. In the Syrian conflict, over 500,000 Syrians

have found refuge in Turkey’s humanitarian camps.13

Turkey shares many internal issues common in the region, such as gender ine-

quality in a patriarchal society, limited rights of national (Kurdish) and religious

(Alevi, Christians) minorities and the divide between religious fundamentalism

7 Balcer, Adam. Heading for the strategic Partner-

ship EU-Turkey in the foreign Policy. Warsaw:

demos EUROPA, 2010. Print.

8 Erdogan, Recep Tayyip. „Introduction and Lead-

ers’ Perspectives.” G20 Russia September 2013.

N.p., n.d. Web. 16 Sept. 2013.

9 Friedman, George. „Turkey’s Strategy.” Stratfor |

Geopolitical intelligence, economic, political, and

military strategic forecasting. N.p., 17 Apr. 2012.

Web. 7 Sept. 2013.

10 „Middle East: Turkey.” The World Factbook. CIA,

23 Sept. 2013. Web. 5 Sept. 2013.

11 „Turkey’s eastern trading bet pays off.”

Financial Times Online. Financial Times, 29 Aug.

2012. Web. 16 Sept. 2013.

12 Balcer, Adam. Heading for the strategic Partner-

ship EU-Turkey in the foreign Policy. Warsaw:

demos EUROPA, 2010. Print.

13 „Number of Syrian refugees in Turkey passes

500,000 mark: Foreign Ministry.” Hurriyet Daily

News. N.p., 4 Sept. 2013. Web. 8 Sept. 2013.

4

and Kemalist secularism. However, here there is hope that the EU membership

preconditions will eliminate religious instrumentalism from geopolitical power-

play. Moreover, the “strategic depth” approach displays a clear fascination with

the EU soft power model. This “Turkish model” has found consensual following

amongst both the mainstream Islamists groups as well as Christian minorities

in the region. Turkey’s new direction gives it the potential to develop its natural

regional significance by overcoming sectarian divides.

Turkey’s overt political influence in the Western Balkans ended with the Ot-

toman Empire. However the countries of the region are still brought together

by their common history, religion, and status as keen candidates for the EU.

In this regional identity, Turkey has found new channels of soft power. Turkey

presence in all EU/NATO/UN military and civilian missions and combat-

ing organised crime in the Balkans has made it key to the region’s stability.

Unsurprisingly, Turkey has special interests in supporting Balkan bids on the

international arena, such as the Bosnian NATO candidacy bid or defending

the Macedonian EU accession process. As a member of the Southeast Eu-

ropean Cooperative Initiative (SECI) and Regional Cooperative Council (RCC),

Turkey shares in foreign direct investment into Balkan infrastructure, Turkish

schools educate thousands of pupils in Muslim regions and regional tour-

ism is growing. For now, regional partnership matters little economically. For

Turkey, the Balkans are another gateway – for trade and for politics, into the

heart of Europe. Therefore, while the EU is still the main outside influence on

Balkan policy, Turkey has built itself into the fabric of the region.14

Turning to EU-Turkey relations, full European Union membership has for dec-

ades been both an object of desire and of frustration for the Western-look-

ing ambitions of Turkey. This month, September 12th 2013 marks the 50th

anniversary of the Ankara agreement of 1963, creating a formal association

between Turkey and the European Economic Community. Turkey has so far

opened twelve chapters and closed one. The chapters on Foreign, Security

and Defence policy and Energy policy remain unopened. Opponents of Turk-

ish membership are concerned by Turkey’s poor records of social freedoms,

territorial disputes with Cyprus (member of the EU) and Greece as well as the

unease felt between France, Germany and Austria over issues of immigra-

tion, respect for human rights and cultural differences. The crackdown on

the Gezi Park protest 2013 has cast a shadow on accession talks.

Last year “Positive Agenda” four-way talks between EU High Representa-

tive Catherine Ashton, Štefan Füle EU Commissioner for Enlargement and

European Neighbourhood Policy, Turkish Foreign Minister Ahmet Davutoğlu

and Turkish Minister for European Affairs Egemen Bağıs marked a thawing in

accession talks. The EU is already Turkey’s largest trading partner, account-

ing for 37% of Turkish foreign trade. Much more stands to be gained from

joint business ventures between the EU and Turkish companies in the region.

Both Turkey and the EU could substantially benefit from cooperating in the

area of Common Foreign and Security Policy towards the Western Balkans,

the European Neighbourhood and Central Asia.

14 Balcer, Adam, and Veton Surroi. In search of a

new paradigm: the Western Balkans and the

EU integration. Warsaw: demos EUROPA,

2013. Print.

5

Both the EU and its most significant strategic partner, Russia, hold a keen

interest in Turkey. For the EU, Turkey accounts for 2.7% (47.789 million euro)

of its imports, 4.5% (75.172 million euro) of its exports, while Russia accounts

for 11.9% (21.212 million euro) of its imports and 7.3% (123,262 million euro) of

its exports. For Turkey, its largest trading partner, the EU, accounts for 33.7%

of its imports and 29.3% of its exports. Turkey’s trading relationship with the

EU is built around machinery, transport and manufactured goods. Meanwhile,

Russia, as Turkey’s second largest partner, account for 10.3% of imports

(20.739 million euro) and 3.3% (5.202 million euro) of exports. The density of

trade between the three countries creates a strategic trading triangle.

Energy security challenges

While EU energy imports from Turkey account for only 1.5% of their trade,

and 0.1% of total EU imports, Turkey plays an important part in the regional

trade dynamic with Russia. Turkish-Russian bilateral trade is estimated to

soon triple to $100 billion annually.15 Already, 70% of Russia exports to

Turkey consist of natural gas.16 In an oil and gas rich region, the country also

stands to gain from pipeline projects. Ventures such as the Baku-Tbilisi-

Ceyhan gas-line launched in May 2006, the Trans Adriatic Pipeline and the

Nabucco-West pipeline (Turkey-Austria) deliver Eurasian and Middle Eastern

gas to Europe.17 There are also prospects of building a second Russian pipe-

line through Turkey, and Russia assisting Turkey in the construction of its first

nuclear power plant in Mersin next year. While it does not have large energy

resources, Turkey holds potential for the production of renewable energy.

Estimated hydro-energy potential is at 30% of that of the EU with Turkey’s

lakes and rivers holding approximately 36,000 MW of energy potential. With

regards to geothermal energy potential, Turkey stands 7th in the world and

3rd in Europe.18 Lastly, Turkey has the world’s highest growth rate in wind

energy plants, and only 15% of its potential has yet been achieved.19

Turkish energy market may seem limited in its diversity – in provided energy

sources as well as suppliers. The cause of such situation are licences issued

by Energy Market Regulatory Authority (EPDK) in cooperation with other

official local authorities responsible for implementing national energy policy.

The licences are issued for activities as well as equipment. According to law

there are different activities encompassed by licences, e.g.: production,

transport, distribution, retail and wholesale trade, as well as import and

export of energy. For every single activity separate licence has to be issued.

The bureaucratic procedures are complicated and time-consuming.

Further obstacles are set by the diversity of the provisions and regulations

concerning different types of energy (oil, gas, renewable resources, etc.) and

different types of activities in every sector of energy market (production,

distribution, pricing, etc).

15 „Russia and Turkey: Cool pragmatism | The

Economist.” The Economist. N.p., 8 Dec. 2012.

Web. 9 June 2013.

16 „DG Trade Statistics.” Turkey - EU bilateral trade

and trade with the world. European Commis-

sion, 5 July 2013. Web. 16 Sept. 2013.

17 Kashi, David. „Turkey Wants Share in New

Adriatic Pipeline From Azerbaijan To Greece

And Italy.” International Business Times Online.

International Business Times, 2 Sept. 2013.

Web. 7 Sept. 2013.

18 „Middle East: Turkey.” The World Factbook. CIA,

23 Sept. 2013. Web. 5 Sept. 2013.

19 „Energy.” Invest in Turkey. The Republic of Tur-

key Prime Ministry, n.d. Web. 16 Sept. 2013.

6

Figure 1. Turkey’s liquid fuels consumption and production, 2001-2012Note: 2012 data are estimates. Source: U.S. Energy Information Administration, InternationalEnergu Statistics Database and Short-Term Energu Outlook.

Firstly Turkish demand for energy is constantly increasing. It is directly

connected to another essential problem – growing dependence on foreign

energy suppliers (e.g. Russia, Iran). The demand is suppose to double by

2030, therefore Turkey needs to find a solution, which would compromise

the increasing consumption of energy and reducing dependence on for-

eign energy providers. Such strong ties with other countries may result in

decreasing national security. Having no space for any manoeuvre, Turkey can

be easily affected by its partners’ political decisions.

One of the solutions and challenges at the same time is liberalisation of the

energy market. It may give an incentive for privatisation and attract investors.

Unfortunately there is also the other side of the coin. Opening of the market by

Turkish government would give a green light for foreign companies to invest in

Turkey’s energy infrastructure, making it even more dependent on other states.

What is more, national oil companies of other countries are far more active on a

global market than Turkey’s Petroleum Corporation (TPAO), which have estab-

lished its contacts with only four countries: Azerbaijan, Libya, Kazakhstan and

Iraq. The reason why TPAO cannot invest more in actions with foreign partners

is the fact that it is bound by rigid, obsolete bureaucratic procedures. Public-pri-

vate partnerships (PPP) could be a solution to lack of participation on the market

by Turkey. Two factors are crucial for an effective partnership:

1. it is based mainly on a long-term planning (20+ years), many Middle

East governments/companies are not used to establish such rigid

framework of cooperation;

2. with current uncertain, political situation of Middle East, there is high

probability that after the change of government, a development of part-

nership could be terminated.

thousand barrels per day 800

700

600

500

400

300

200

100

0

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

consumption

production

net imports

7

Yet the biggest disadvantage Turkey is struggling with is its lagging behind in

the international environmental standards. Many other markets are far more

competitive than Turkish, due to their independence of other countries, sig-

nificant share of renewable resources in energy production as well as foreign

investments. The graphs below, delivered by International Energy Agency,

illustrate the problem showing the consumption, production and import of

oil and gas by Turkey.

Table 1. Key Natural Gas Data Source: International Energy Agency

1985 1990 1995 2000 2005 2010 2011 2012*

Production (mcm/y) 67 212 182 639 897 682 761 632

Demand (mcm/y) 67 3468 7029 14835 27375 38127 44686 45254

Transformation 18 2585 3600 8845 15157 20708 21570 -

Industry 49 814 1984 2029 3839 7901 9878 -

Residential - 49 1364 3218 5747 5888 8779 -

Others - 20 81 674 2632 3630 4459 -

Net Imports (mcm/y) - 3256 6847 14194 26478 37445 43925 44622

Import dependency 0.0% 93.9% 97.4% 95.7% 96.7% 98.2% 98.3% 98.6%

Natural Gas in TPES 0.1% 5.4% 9.4% 16.6% 27.0% 29.8% 32.3% -

*based on monthly data submissioned to the IEA

Table 2. Key Oil Data Source: International Energy Agency

1985 1990 1995 2000 2005 2010 2011 2012

Production (kb/d) 40.6 72.5 67.7 52.8 43.5 48.3 45.6 44.9

Demand (kb/d) 359.5 477.0 608.3 662.8 647.5 649.8 655.9 670.3

Motor Gasoline 44.4 74.0 100.2 83.6 61.9 47.3 44.7 41.2

Gas/diesel oil 114.2 153.7 180.0 184.8 216.8 300.1 310.6 327.6

Residual fuel oil 121.3 119.8 144.4 141.5 117.8 20.2 18.7 19.8

Others 79.7 129.6 183.7 252.9 251.1 282.3 281.9 281.7

Net Imports (kb/d) 318.9 404.5 540.6 610.0 604.0 601.5 610.3 625.4

Import dependency 88.7% 84.8% 88.9% 92.0% 93.3% 92.6% 93.0% 93.3%

Refining capacity (kb/d) 460 725 713 691 714 630 630 630

Oil in TPES 46.0% 44.3% 46.1% 40.0% 34.0% 28.6% 27.7% -

8

Turkish Energy Strategy

An official statement is given on the website of Ministry of Foreign Affairs,

laying out main objectives for the future Turkish energy policy: “the primary

aim of Turkey is to realize its own energy security. To this end, Turkey has for

objective to

diversify its energy supply routes and source countries,

increase the share of renewables and include the nuclear in its energy mix,

takesignificantstepstoincreaseenergyefficiency,

contribute to Europe’s energy security.”20

Diversification of energy supply routes and source countries

Due to large Turkish dependency on foreign gas and oil providers, Turkey has

to find other means to face the rising demand on energy supply. Couple of

pipeline projects have been drafted, some even implemented:

Baku-Tbilisi-Ceyhan (BTC) is the first project of a crude oil export

pipeline. Its route begins on the shore of the Caspian Sea, through

Azarbaijan and Georgia to the marine terminal in Ceyhan, Turkey.

From then on tankers ship oil to the European costumers. It is

deemed as mega-pipeline, with its ability to transport one million bar-

rels of oil per day.

Baku-Tbilisi_Erzurum (BTE), also known as South Caucasus Pipeline, is

a gas line. It is commonly compared to BTC line and referred to as BTC’s

smaller brother. It is, however, the second biggest pipeline in Turkey.

Tans-Anatolian Natural Gas Pipeline (TANAP), it is intended to transport

gas from the end of BTE line in Erzurum and deliver it either to Italy

or Austria. An agreement with Azerbaijan State Oil Company (SOCAR)

has been signed in December, 2011. Turkey holds 20% of the shares,

whereas SOCAR has 80%. The construction of the line is planned for

the end of year 2013 or beginning of 2014.

In June, 2013 Shach Deniz consortium has decided to establish Trans Adriatic

Pipeline instead of Nabucco West. The later one would have been a true com-

petitor to Russia, which is currently the dominant supplier of gas to Europe

and Turkey. Nabucco West was supposed to provide gas from Azerbaijan,

giving Azeris opportunity to enter the European market, through Turkey,

Bulgaria, Rumania, Hungry and to Austria. Implementation of Nabucco West

could have caused an escalation of a conflict between Moscow and Baku.

20 Source.

9

Therefore a project of Trans Adriatic Pipeline (or South Stream). It begins in

Azarbaijan, goes through Greece, Albania and Adriatic Sea to Southern Italy.

Although it is still imported gas from Azarbaijan, there are two reasons why

it is not so threatening to Russia, as Nabucco West was deemed to be. Greek

and Italian energy markets are diversified enough. They do not need another

gas provider as much as Central and Eastern Europe. The pipeline will not

provide as much gas as Nabucco West would or other foreign suppliers.

Map 1. Projected routes of Nord Stream, Nabucco and South Stream pipelines. Source: BBC

Erzurum

Ankara

Bucharest

BeregovayaBudapest

Baumgarten

Sassnitz

Vyborg

Vienna

Sofia

 South Stream   Nabucco   Nord Stream

Increase the share of renewables and include the nuclear in its energy mix

Comparable to the European 20/20/20 strategy, Turkey has also set a list of

goals it wants to achieve until 2023 in the Energy Strategy Plan. The date is of

special importance to Turks, since it will be the 100th anniversary of establish-

ing the republic. One of such goals concern energy policy. According to World

Bank, Turkey wants to increase its share of renewables in total energy to 30%.

What is more, Ankara plans to build two nuclear power plants in Akkuyu (Rus-

sian ROSATOM was chosen to build the first nuke reactor) and Sinop (will be

build by consortium consisting of French and Japanese companies). Although

10

it raises critique, nuclear reactors are meant to give an incentive for liberalisa-

tion and give another way for foreign investment to flow on the market.

Take significant steps to increase energy efficiency

The Energy Strategy Plan assumes reduction by 20% of primary energy inten-

sity by 2023. There are many possible investment supports for energy efficien-

cy projects. Currently only 11% of total energy consumption was yielded from

renewable resources. In 2005 Turkey has implemented a first law concerning

renewable energy resources. Along with the regulations, a feed-in tariff for

wind was introduced. Five years later, in 2010, parliament has introduced more

fields encompassed by feed-in tariffs, e.g. small hydro, geothermal and solar

PV. What is more, licences for certain type of renewable power plants have

been abolished. Further amendments in the energy law are foreseen. Moreo-

ver, state has prepared and implemented a set of subsidies, which encourage

industrial facilities to reduce their energy intensity.

Contribute to Europe’s energy security

The European Union has high hopes concerning cooperation with Turkey in

the field of energy. It gives an opportunity for the EU to diversify its energy

providers. It is possible since Turkey is aspiring to become a hub state. Anka-

ra wants to import and store the surplus of gas and oil, in order to re-export

it to the European markets. Partnership with the EU gives Turkey incentives

to develop energy sector in order to meet the European standards. Although

currently the energy chapter is not yet open for negotiations between the EU

and Turkey, there is a great possibility that it will be soon introduced to the

discussion concerning Turkish accession.

Strategies concerning power plants and energy security

Due to large dependency Turkey seeks to diversify its energy sector, there-

fore coal and clean energy power plants are one of the options, which could

help in cutting the cord. Two biggest investments planned to be conducted

in Turkey concern nuclear power plants. Whereas the first nuclear reactor

is to be built by Russian company Rosatom. Although the beginning of the

construction has been delayed due to bureaucratic procedures, the main

objective for Turkey is to become less dependent from other energy sources

(gas/oil) and therefore from other countries (Russia/Iran). The second project

of nuclear power plant is to be built by the Japanese-French consortium. The

second reactor ought to begin working in 2023, whereas the last unit should

be ready by 2028.

In 2023 a project of a gas-fired power plant has been certified as ready for

operation - RWE & Turcas Denizli. The main objective of it is to develop the

Denizli region and provide electricity to the residents of the nearby towns

and cities. Moreover Abu-Dhabi’s national energy company TAQA has signed

11

a contract with Turkish state-owned company Electricity Generation Co

(EUAS). The alliance was supposed to start mid-2013 a construction of lignite

coal power plant, which would provide up to 8.000 megawatts of electricity

production in the southeast Turkey.

Renewables

Turkish Parliament has adopted a new Renewable Energy Law at the end of

2010. Therefore entrance to renewable resources market is easier for new

companies, due to subsidies. Solar energy and biomass power plants are the

most subsidised forms of clean energy. Turkey is perceived as a country with

great potential for solar and wind energy, but no investments in both sectors.

Aksa Enrji Uretim has received financing for wind farms and the construc-

tion is expected to begin in the first quarter of 2014. Contrary to the projects

concerning wind power plants, there are many applications coming both from

Turkish as well as foreign companies, which applied for licences, in order to

establish solar power plants. The main problem arises from the limitations of

solar power production, i.e. 600 megawatts. Many question the quota, since

there is no such limit for coal or gas power facilities. Moreover the goal of all

solar plants installed by 2023 is to reach 3.000 megawatts, which is already

insufficient and will result in a slow development of the solar energy sector.

Poland and Turkey – possible fields of cooperation in the field of energy

Both Poland and Turkey are dependent on fossil fuels and energy imports,

and in both countries there is a growing and urgent need to change this

status. Both Poland and Turkey could gain from cooperation in the field of

diversification of energy mix and new energy sources (both domestic and

external) development.

Shale gas is definitely one of areas where Poland and Turkey could develop

cooperation. Both countries have prominent shale gas reserves. Their

extraction would stimulate economic growth, create new jobs and generate

more income for households and government.21 What is more, should shale

gas industry develop, both Poland and Turkey would become more inde-

pendent of external gas supplies. Shale gas would also help diversify energy

mixes of the two countries and help them transit to a low-carbon economy.

In both countries transparent and comprehensible regulations concerning

shale gas to provide certainty for investors’ are needed. Turkey and Poland

would very much benefit from cooperation on shale gas legal framework

themselves and they could also prepare the ground and standards for shale

gas extraction in Europe.

Cooperation in the field of nuclear energy is also to be enhanced, as both

Poland and Turkey currently do not have and at the same time are pre-

21 Poland and Turkey: common challenges and

opportunities for cooperation in Energy

Sector, The First Polish-Turkish Roundtable,

Adam B. Czyżewski, PhD, Warsaw, 27-28

November 2013.

paring for a construction of a nuclear power plant. Although Turkey has

already signed a contract with Rosatom, but the beginning of the construc-

tion of the nuclear power plant, scheduled for year 2019, has been post-

poned due to legal difficulties. Contrary to Turkey, Poland’s first nuclear

power plant is to be established by a state-owned company. Regardless of

that, both countries are on a similar and still relatively preliminary stage

of the development of nuclear power and cooperation, exchange of best

practices and lessons learnt would be very much welcome and of a benefit

for both Poland and Turkey.

Poland and Turkey should also establish cooperation in the field of energy

R&D. To be precise, they should work together on low-carbon technologies

development and demonstration (i.e. clean coal technologies) and the devel-

opment of intelligent energy management know-how.22 Business-to-business

and business-to-science collaboration should be enhanced. For that purpose

a know-how sharing platform could be created as the first step.

Choosing the above fields of cooperation should help bring Poland and

Turkey closer together in the field of energy security and create a ground for

further cooperation in the future in such fields as energy (smart) infrastruc-

ture, renewable energy sources, energy efficiency or energy market liber-

alization. This cooperation would also serve the purpose of bringing Turkey

closer to Europe.

22 Poland and Turkey: common challenges

and opportunities for cooperation in

Energy Sector, The First Polish-Turkish

Roundtable, Adam B. Czyżewski, PhD,

Warsaw, 27-28 November 2013.

demosEUROPA – Centre for European Strategy

ul. Mokotowska 23/8

00-560 Warszawa

tel. +48 22 401 70 26

fax +48 22 401 70 29

demoseuropa@demoseuropa.eu

www.demoseuropa.eu

Publication prepared within the framework of “The Polish-Turkish Round Table 2013” project. The project was co-financed by the Department of Public and Cultural Diplomacy of the Ministry of Foreign Affairs of Poland within its “Cooperation in the field of public diplomacy 2013” programme.

Publication expresses the views of its

author only and cannot be associated

with the official position of the Ministry

of foreign Affairs of Poland.