Turkey needs to invest between $5.3 and $7 billion annually for energy transition for the period up to 2030, requiring average annual financing of $3.6-4.5 billion, according to a new report published Thursday.
These investments would put Turkey's energy sector on a pathway to supply half of its total electricity demand from renewables by 2030, the report titled Financing the Energy Transition in Turkey by Istanbul-based SHURA Energy Transition Center said.
The center, which aims to support Turkey's transition to low-carbon energy through fact-based analysis using the best available data, said in the report that if Turkey can make this volume of investment, it could reach its national energy efficiency targets for 2023 with the annual improvement rates maintained until 2030.
During the period 2002-2018, Turkey's total energy demand increased by more than 90%, the report said.
While total energy demand increased, both energy investments and energy imports have also increased to meet the rising demand, it added.
The gross investment for energy sector over this period was nearly $110 billion and $10 billion was also invested for energy efficiency improvements.
Investments in renewable energy, including hydropower, accounted for 53% of the $75 billion invested in power generation capacity between 2002 and 2018, the report said.
With the investments, the total installed electricity generation capacity reached 90.4 gigawatts as of June 2019 with renewables accounting for slightly less than half of this total.
According to the report's findings, local and international financial institutions were the primary source of financing in energy investments between 2004 and 2018.
"By the end of 2018, the financing provided by local banks to the energy sector reached $45.4 billion, including non-cash loans, while international financial institutions provided $12 billion in loans to private energy investments," the report said.
Turkey, which has large potential for electricity production from renewable energy resources, is experiencing a rapid transition in its energy sector. The country, with its growing economy, aims to maximize the use of its renewable resources both from small to large scale, such as rooftop solar panels.
By Firdevs Yuksel and Nuran Erkul Kaya