energy prices, consumption, and policies (en)
TRANSCRIPT
PRICES, CONSUMPTION, and POLICIES
BARıŞ SANLı DEPUTY DIRECTOR GENERAL FOR ENERGY AFFAIRS MINISTRY OF ENERGY AND NATURAL RESOURCES
September 9, 2014
MENA Knowledge Sharing and How-‐To in Subsidy Reform:
Regional Workshop
Year 1980 : The prime suspect for electricity cuts is…
2
TV broadcasJng Jme will be limited to 2.5 or 3 hours According to a research, the Turkish films during the week days are the prime reason for excessive power. Therefore, during the week days , Turkish films will not be shown.
A Brief History
* 2013 yılı sonu değerleri
2014
Resource Installed Capacity (MW) Share (%) Genera?on
(TWh) Share in
Genera?on (%)
NaturalGas 25,538 38 104,8 44 Hydro 23,299 34 59,2 25 Lignite 8,566 13 30.0 13 Imported Coal 4,862 7 31.4 13
Renewable 3,819 6 8.8 4
Other 1,354 2 5,1 2 Total 67,431 100 239,3 100
2002
Resource Installed Capacity (MW)
Share (%)
Genera?on (TWh)
Share in Genera?on
(%) NaturalGas 9.702 31 52,5 41 Hydro 12.241 38 33,7 26 Lignite 6.959 22 28,0 22 Imported Coal 480 1 4,1 3
Renewable 33.9 0 0,2 0 Other 2.761 8 10,9 8 Total 31.846 100 129,4 100
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Natural Gas
Hydro
Coal
2001: Electricity Market Law State Periods
Turkish policy makers tried several models
• TEK (Turkish version of EDF) • Chronic financial problems, long construcJon Jmes, inefficient operaJon
• BO/BOT (Özal model Built-‐Own/Built-‐Own-‐Transfer) • High tariffs (accelerated returns)
• ToOR for exisJng plants • Electricity Market Model in 2001
• Eliminate cross subsidies • Transparent price formaJon • But you have lots of contracts in hand with purchasing guarantees?
How to understand «Market» *
• Market is not something to believe in • An insJtuJon seperaJng poliJcs and economics increasing visibility for long term investments (like electricity investments)
• Turkish electricity market law (4628 and now 6446 by 2013) • Clearly defines procedures to enter market (No Ministry) • Procedures are Jme limited and need technical reasons to reject • An independent Commission -‐> EMRA/EPDK • Govt promised not make any new generaJon investments and leave it to private sector
* My interpretaJon
When you have lots of hydro, prepare for drought
• In 2007, there was a drought, hydro levels were not good • The thej raJos were high • Need to save electricity for the summer • Should Govt make investment????
A interesEng idea to distribute (free of charge) Energy Efficient Light Bulb to high theM regions. They were given to school kids accompanying a brief educaEon for benefits for environment
And……..
• They broke it (may be not much) • Reason: Conspiracy Theory «There is a bugging device in the bulb»
Needs careful study of a policy design
Back to drawing board –Demand Dynamics
Electricity consumpJon • (with Istanbul)
• (without Istanbul)
Turkish Demand Dynamics
• When it is hot (+8000 MW)
• When it is cold (+4000 MW)
Demand = Life Ac?vity
15,000
18,000
21,000
24,000
27,000
30,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
MW
30 Mart 2014 Pazar 23 Mart 2014 Pazar 10,000
15,000
20,000
25,000
30,000
35,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
MW
15 Ekim 2013 Salı 8 Ekim 2013 Salı
2600 MW
15500 MW
11000 MW
8000 MW
Election Days Eids
22,000
24,000
26,000
28,000
30,000
32,000
34,000
36,000
38,000
1 3 5 7 9 11 13 15 17 19 21 23
MW
11 Temmuz 2013 Perşembe 12 Temmuz 2013 Cuma
Friday Prayers
20,000
22,000
24,000
26,000
28,000
30,000
32,000
34,000
36,000
38,000
1 3 5 7 9 11 13 15 17 19 21 23
MW
08 Temmuz 2013 Pazartesi 09 Temmuz 2013 Salı
Ramadan
10
And Natural Gas Demand
0
50
100
150
200
250 Milyon
m3
Elektrik Konut Sanayi
Electricity
House
Industry
As households increase consumpJon there is less gas available for
Electricity & Industry
In summer very liole household consumpJon
In 15 days, large ciJes’ demand increased to 3 folds.
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0 10 20 30 40 50 60 70
mcm
İstanbul Ankara Bursa
Seeking a Solution
Finding the difference between
• «can’t pay» and «won’t pay»
Registered Employment
Thej RaJo
Social Aids and The^
Thej %
Social aid %
Thej in City’s consumpJon and PopulaJon benefiJng from Social aids
Demand Side – Targe?ng Audiences
• EducaJon programs for Kids and Woman • www.enerjihanim.com and City tours (for Ladies) • www.enerjicocuk.org for kids and cartoons
• For Industry • hop://www.enerjiverimlisanayi.com/
• Govt targets for efficiency gains
• Missing: no eff. For agriculture?
Prices
• Price levels are important • No subsidies for building isolaJon but… • Finance resources – Bank credits • Run by NGO
• Switch from Gasoline to Diesel and smaller car • High taxes for >1600cc • High taxes for fuels (2.32$/liter gasoline, 2.06$/liter diesel)
• You can forget educaJon programs but you can not forget prices!
Supply Side – Market Mechanism & Renewables • Day Ahead Market based on CompeJJon • It started as a spot market – A window of opportunity for private investors to sell their electricity in a market dominated by State
• If you can not beat the market price, you reJre your inefficient plant • Market first opJmized :
• Shortest Jme for cash flow generaJon=> Nat Gas Plants
• As compeJJon intensified: • Most efficient => Nat Gas Plant • Cheaper resources => Imported Coal • DomesJc resources => Wind, hydro
Turkish Power Prices 101
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BO/BOT/ToOR
Renewables (wind at 25% cap)
Merit Order
Most Probably new NG plants
The Increase of Wind Power
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Prices deflated ? No wind / Wind (3000 MW)
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Price : 200 TL/MWh (69 €) Price : 186 TL/MWh (64 €)
SJll the price is formed by natural gas plant but what is the efficiency?
Conclusion
• Electricity Market • Power • Capacity
• CompeJJon brings efficiency • But sezng targets is important • PoliJcs-‐free insJtuJons are important • When asked: Everyone is poor, but who is at the booom? (StaJsJcal Analysis)
Thank you Barış Sanlı www.barissanli.com