Throughout the previous decade, one of the main rhetorics in Turkish diplomacy was to become the fourth energy artery for Europe. Parallel to this motto, Turkey pursued a pro-active policy in the Middle East and Caspian Basin. However, it had to face political constraints in Iran and Iraq, whereas in the Caspian Basin could only succeed in finishing several projects in its own modest way.
Even though Turkey is yet to succeed in becoming an energy hub, it is an important country for energy potential and existing policies. However, again mega projects like Nabucco, South Stream, Samsun Ceyhan and the Trans-Caspian Pipeline cannot be imagined without Turkey. Thus, looking back, Turkey strengthened its position on an international level and became one of the main actors in the energy sector in its region.
Over the years, Turkey's strategy has shown energy business that it has a multidimensional character which is not only technical, but includes detailed policy that incorporates issues of the economy, foreign policy and security. In this sense, these policies while helping Turkey to strengthen its geostrategic position also contributed to Turkeys energy security. However, it seems Ankara has to take more serious steps to safeguard its immediate future in the sector. Thus, it could be argued that national motives will gain a greater importance in Turkeys energy strategy, while the international dimension of Turkish energy policy remains high on the agenda.
Focusing on energy policies for national purposes
In the last decade, Turkey has tried to increase the share of the countrys national resources used in its energy consumption. In this regard, hydropower policies and renewable energy investments, along with thermal energy, recently gained impetus. Accordingly, the Turkish state reformed the legal basis and its policies in order to stimulate projects and create a favorable environment for both foreign and Turkish entrepreneurs.
Even though Turkish strategy is to support investments using national resources, the problem is that Turkey has limited resources, and apart from coal reserves, renewable energy and hydropower, is open to fluctuations because of seasonal effects. Moreover, despite promises it represents, renewable energy seems to be secondary in the countrys strategy when compared to conventional energy resources. In this sense, Turkey is in need of sustainable, stable energy resources. However, its dependence on foreign resources places the issue of diversification high on the agenda.
In terms of diversification, Turkey's is hardly one of the success stories. The country is particularly dependent on Russia for natural gas from which it obtains 65 percent of its gas requirements as well as other partners such as Iran, Azerbaijan and a number of African states, and it hardly has the capacity to substitute Russian dominance in the Turkish market. Moreover, among energy partner countries, Iran seems to be the least reliable partner because of problems of stability in the colder winter periods.
In general terms, Turkey is dependent on imported energy to a level of 70 percent and increases in demand sit at around 5.5 percent to 6 percent per year. In times of economic prosperity this may reach to 8 percent. Thus, Turkey is facing a compromise between growth and increasing its capacity in energy generation. Considering the fact that Turkey will be growing at around 5 percent to 6 percent annually over the next three years and aims to climb the steps of the G20 by 2023, a second option for Turkey is not on the cards.
Nuclear ambitions: Seeking for partners in the East
Turkey wants to minimize fluctuations in energy generation and needs big scale investments in the new period. In this sense, over the next decade Ankara intends to include nuclear technology in its portfolio without any delays. However, there is the urge of diversifying its partners in energy sector as well. In this regard, Russian nuclear power plant in Mersin Akkuyu seems to be the first investment with the capacity of 4800 MW and Turkey is looking for another investor in the Black Sea coast of Turkey, Sinop.
The Russian project is important for Turkey as being a reference model for other projects. However, it has its own constrains. First of all, the interdependence between Russia and Turkey will be increasing in energy sphere apart from Turkey's existing dependence on Russian hydrocarbon resources. Turkey intends to balance this situation by persuading Moscow to provide the necessary financial source to the project. In this sense, while bringing foreign direct investment to the country, Turkey also aims to minimize the risk.
It seems that Russia perceives the project more strategic than commercial and decisive in terms of finalizing the project. When finalized the power plant will be active for 60 years and there is a state guarantee that Turkey will buy the generated electricity for 20 years. Even though 20 years is perceived as a long-term commitment, the $20 billion dollar of investment of Russians and depreciation of price due to time lag makes it understandable.
However, there is another risk that arises in the security sphere of the Russian project. Even though the project seems attractive, Russian political cultures not being liberal is causing some concerns about the future. The Russian reflex in a possible regional conflict between Russia and Georgia is hard to imagine if Turkey pursued a different strategy to Moscow. However, the Turkish government continues to support the project as both economically and strategically beneficial for Turkey.
As mentioned, Turkey is aiming to find new partners in the energy business. Accordingly, Energy Minister Taner Yıldız is looking for new investors in the Asia Pacific region. The shuttle diplomacy between Turkey and the countries in the region has gained impetus recently. Even though Turkey failed to ink an agreement with South Korea, it seems that Japan is appearing as another promising potential partner. Turkey and Japan signed a memorandum of understanding in Tokyo to build a nuclear power plant in Sinop. Another meeting will be made between two partners to discuss the terms and conditions of the parties in three months time. If parties sign an agreement the security and dependency problem will be overcome, up to a certain extent, for Ankara. Japan, as a country specialized in nuclear technology, is known to be building reactors resistant to earthquakes and the countrys disciplined business culture could be an asset to Turkey. However, Turkey should continue to look for other partners in the world to create a dynamic environment and culture in nuclear technology. Considering the fact that efficiency and lower cost is the main essence of competition, Turkey would benefit from these partnerships.
Turkey aims to generate between 5 percent and 10 percent of its energy needs from nuclear technology over the next decade. In this sense, Turkey needs a consistent and sustainable nuclear energy strategy. Recent steps taken should be analyzed carefully and the energy ministers steps should also be supported by diplomatic channels. The agreements should be made in terms of mutual benefits and it should be underlined here that these initiatives are vital not only for Turkey. Considering the global financial crisis and slowing economies, mega projects are also important for investor countries.
Moreover, the Turkish private sector should take an active role in these projects. In the 1960s and 1970s, Turkish engineers learned how to build hydroelectricity power plants from Western engineers. Now, Turkish companies are not only building hydroelectricity power plants in Turkey but also taking over big projects all over the world which shows the competitive capacity of the Turkish economy.
Hasan Selim zertem
Center for Eurasian Studies