Turkish Power & Gas Markets

Transkript

1 Turkish Power & Gas Markets Fakir Hüseyin Erdoğan Energy Expert 7 May 2015, Madrid

2 EMRA The sole regulator of the Turkish electricity, natural gas, LPG and fuel and lubricants markets. The architect of the liberalization and regulation of the Turkish energy market An independent public entity with administrative and financial autonomy established in 2001 Governed by a 9-member board Functions: Issuing secondary legislation Licensing market participants Approving tariffs Monitoring, supervising and auditing markets and market players

3 Objectives of EMRA To establish Financially viable Stable Transparent Non-discriminatory Competitive energy markets for delivery of Adequately Efficiently Continuously At high quality At low cost Environment friendly energy

4 Main Characteristics Source: BP Statistical Review 2014 Rapid growth in demand 20.5% pa in gas & 7% pa in electricity in the past quarter century despite economic crises in 1994, 1998, 2001 & m 3 pa & kwh pa gross electricity consumption per capita High level of import dependency 92.3% in petroleum & 98.8% in gas Relatively high figures for energy intensity 280 koe/1000 USD

5 Power Markets (2013) 7.6 TWh 22 TWh 10 TWh 44 TWh TWh 240 TWh 58.3 TWh 42 TWh 60 TWh Source: BP + Own Data

6 HV Electricity Grid BLACK SEA MEDITERRANEAN ALTINKAYA EREĞLİ AMBARLI BULGARİSTAN FILIPPI H.UĞURLU KAYABAŞI ÇANKIRI TİREBOLU BORÇKA BATUM GUMRI BALIKESİR SOMA ALİAĞA DENİZLİ YATAĞAN KEMERKÖY OYMAPINAR SEYDİŞEHİR KONYA ADANA ERZİN G.ANTEP ANDIRIN ELBİSTAN KANGAL YEŞİLHİSAR KAYSERİ ÇAYIRHAN GÖLBAŞI KEBAN KARAKAYA ATATÜRK DİYARBAKIR Ş.URFA BATMAN HAKKARİ KARS ÖZLÜCE ERZURUM HORASAN IĞDI R D.BEYAZIT DIMODICHEV SURİYE DERİNER İSKENDERUN İRAN IRAK HALEP PS3 ZAKHO KESEK KHOY BAZARGAN BABEK KALKANDERE KOCATEPE Y.TEPE ALİBEYKÖY TUNÇBİLEK D.PAŞA KARABİGA ADA-GEBZE PAŞAKÖY OSMANCA GÖKÇEKAYA TEMELLİ SİNCAN BABAESKİ HAMİTABAT ÜMRANİYE BURSA AYDIN YENİKÖY BİRECİK SEYİTÖMER IŞIKLAR ADAPAZARI KIZILTEPE AĞRI Z.KÖY TEPEÖREN UNIMAR HİLVAN ILISU DOĞANLI ÇUKURCA CİZRE VAN ERMENEK MERSİN HATAY İKİTELLİ A.ALANI KAPTAN UZUNDERE HİSAR GÜRSÖĞÜT KARGI SİVAS DEÇEKO YUSUFELİ KAVŞAK İSDEMİR BOYABAT AMASRA KARABÜK X BEYKOZ ÇARŞAMBA HOP A VARSAK MANİSA HABİPLER SAMSUN DGKÇ BORASCO SAN-SEL TES SAMSUN TES CENGİZ SİNOP TES AKFEN ÇAYLI TES ÇAN İÇDAŞ İÇDAŞ AKSA SİLOPİ TES K.KALE DGKÇ İÇANADOLU DGKÇ BAĞLU M KAYRAKTEPE YEDİGÖZE İAKSU ARKUN AKINCI ORDU-2 TATVAN ÇETİN ARTVİN Turkish power system is synchronized with the ENTSO-E Source: TEIAS

7 Installed Capacity

8 Fundamentals of the EML Free market entrance thru licensing. Legal unbundling supplemented by privatization. Regulated TPA regime. Cost-reflecting pricing with a temporary price equalization mechanism. Bilateral contracts market complemented by a residual balancing mechanism. Power Exchange Approach: Intra-Day Market, Day-Ahead Market, Derivatives Market. Static precautions in terms of limiting market share i.e. 20%. Non-discriminatory conduct between domestic and foreign investors. Consistency with the EU Acquis.

9 Electricity Market Model Generation Transmission Wholesale Distribution Retail Concessionaires Eligibles Hydro Assigned Suppliers Portfolio Supplier Captives IPPs

10 Tariffs Principles Transparency: All criteria and procedures are made public. Stability: Concerned parties face the least possible regulatory uncertainty. Simplicity: In both methodology and tariffs, in so far as possible Non-discrimination: Nondiscrimination among equal parties secured through TPA. Cost-reflectiveness: Costs not directly related to market operations are not included. Cross-subsidies are not allowed. Regulated Tariffs Transmission Distribution Retail Last Resort Sales Price of State-owned Wholesale Company Distribution within IOZ Distribution connection

11 Markets in Progress

12 Power Exchange Approach Balancing market Interconnections Derivatives EPIAS TEIAS Day-ahead market Intra-day market Market operation as a separate activity Withdrawal of market operation from TEİAŞ: Enhancing TEİAŞ system operation capabilities Possibility for alternative markets Identification of Istanbul Exchange for derivatives trading Borsa Istanbul Capacity Mechanism

13 Capacity (MW) DAM Price ($/MWh) Renewables FIT thru RESUM Annual participation possibility Annual announcement of available connection capacity reserved for wind & solar Annual measurement data requirement for license application Solar applications during first 5 working days of April Wind applications during last 5 working days of April RESUM Portfolio Hydro Wind Geo Biomass Average DAM Price

14 Licensing fee facilities: Only 10% of pre-licensing & licensing fees (valid for other domestic sources) Exemption to pay annual license fee for 8 years in operation Connection priority Exemption from being a balancing unit License exemption for renewable power plants up to 1 MW capacity. RES Incentives

15 Installed Capacity(MW) Perception by Investors Provisional License Commissioned License Concessions 7000 Commissioned IPP Capacity Coal Gas Hydro Wind Others

16 Electricity Demand Average Growth 7.6% Average Growth 5.1% Net Electricity Consumption per Capita EU: kwh TR: kwh Source: Eurostat

17 Billion TL Investment Requirement Firm Energy Reserve Margin (%) 27, Cumulative Greenfield Investment Requirement ,6 21, , , Source: Generation Capacity Projection + Own Data

18 A Modern Day Silk Road West Line TANAP West-Balkan Corridor (IAP) Blue Stream-I Turkish Stream Trans-Caspian Kazakh Gas BTC TAP Samsun Ceyhan Shah Deniz BTE ITGI ITG Blue Stream-II [Medstream] Iraq-Turkey Oil Pipeline Trans-Caspian Trans-Iranian Turkmen Gas Iraqi Gas (ITGEP) Iranian Gas Medstream Iraqi Gas (Akkas) South Pars Arab Gas P/L Phase-III via Arab Gas P/L Egyptian Gas Iraqi Gas (South) Map: Google Map

19 Gas Market Model Producers Storage (6) Wholesalers (47) Transmission (1+19) Export (9) Eligibles Importers (17+38) Distribution (69) Captives SUPPLY WHOLESALE NETWORK CONSUMPTION CNG (38-78)

20 Fundamentals of the NGML Free market entrance thru licensing. Legal & account unbundling. Regulated TPA regime. Introduction of gas distribution license tenders. Semi-liberalization of gas imports. Gas release (partly achieved). Static precautions in terms of limiting market share. Non-discriminatory conduct between domestic and foreign investors.

21 Gas Imports Imports Million m Russian Federation Iran Azerbaijan Algeria Nigeria Spot LNG

22 Gas Distribution TÜRKİYE DOĞAL GAZ DAĞITIM HARİTASI KIRKLARELİ BARTIN SİNOP TEKİRDAĞ İSTANBUL ZONGULDAk KASTAMONU SAMSUN EDİRNE KOCAELİ DÜZCE K KARABÜK Havza ÇORLU ÇATALCA GEBZE Geyve A.Paşa Vezirköprü Bafra Pamukova ORDU YALOVA ÇANKIRI AMASYA SAKARYA BOLU KIZILCAHAMAM ÇORUM BANDIRMA GEMLİK TOKAT ÇANAKKALE BURSA BİLECİK İZMİR M.KEMALPAŞA -SUSURLUK BALIKESİR MANİSA AYDIN MUĞLA İNEGÖL KÜTAHYA UŞAK DENİZLİ AFYONKARAHİSAR BURDUR ESKİŞEHİR ISPARTA ANTALYA POLATLI ANKARA KONYA SEYDİŞEHİR- ÇUMRA KIRIKKALE AKSARAY KARAMAN KIRŞEHİR İÇEL NEVŞEHİR NİĞDE YOZGAT KAYSERİ SİVAS K.MARAŞ OSMANİYE ADANA G.ANTEP HATAY KİLİS MALATYA TRABZON GİRESUN GÜMÜŞHANE ADIYAMAN ERZİNCAN TUNCELİ ELAZIĞ ŞANLIURFA BAYBURT RİZE BİNGÖL DİYARBAKIR MARDİN ARTVİN ARDAHAN ERZURUM MUŞ BATMAN BİTLİS SİİRT KARS ŞIRNAK AĞRI IĞDIR VAN HAKKARİ 4646 Pre 4646 sayılı era Kanun öncesi dönemde doğal gaz arzı sağlanmış şehirler Doğal 4646 era Gaz where Dağıtım gas Lisansı supplied İhalesi yapılmış ve gaz arzına başlanmış olan şehirler Doğal 4646 era Gaz where Dağıtım tenders Lisansı completed İhalesi yapılmış, and supply ancak henüz is to start gaz arzına başlanmamış şehirler İhale 4646 ilanına era where çıkılmış tenders ancak not Doğal completed Gaz Dağıtım Lisansı İhalesi yapılamamış şehirler

23 Gas Storage BOTAŞ M. Eregli LNG Storage BCM TPAO Silivri Underground Storage BCM BOTAŞ Sultanhanı Underground Storage 1.5 BCM Egegaz Aliağa LNG Storage BCM Toren Underground Storage 1.BCM Gaz Depo Underground Storage 0.5 BCM

24 Tariffs

25 Investment Opportunities Electricity Market Greenfield generation investments Coal Renewables Privatization of generation assets M&A Natural Gas Market Gas storage LNG facilities M&A

26 Last remarks Turkey pursues its goal of market liberalization in energy sector enthusiastically. The regulatory environment is being designed and established along the path of EU accession. Regional cooperation and integration regards to the energy sector and participation in the energy-related international institutions are among the highest-priority of Turkish policymakers. There are substantial opportunities for greenfield investment and privatization opportunities. That is; a good opportunity and a growing market that often times nudges the potential investors domestic and international alike.

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