 Turkey is passing through a period of drastic change in its energy sector, according to a report released recently by Deloitte Turkey’s energy and natural resources department.
The report, titled “Turkey Electricity Energy Market 2010-2011,” is a direct follow up of Deloitte’s 2007 “Turkey Electricity Energy Market Predictions and Developments” report and focuses on the changes between 2007 and 2010 in Turkey's electricity market. The report said the Turkish electricity sector is in direct interaction with economic and political events in the country and the world, and the sector is experiencing a very dynamic period due to several factors: high potential investment needs triggered as the country entered a recovery trend in 2010 after the global recession; regulation infrastructure developing in line with new requirements; increasingly more sophisticated commercial milieu; risk management practices required as the commercial environment developed; and the emerging new human resources profile. According to the report, the sector’s structure drastically changed in the 2009-2010 period due to the privatization of distribution and production operations. New business models emerged particularly after the distribution privatizations. New regulations concerning the sector have made the electricity trade market all the more competitive. Commercial proficiency and risk management skills, particularly for actors on the suppliers' side, have become crucial. Deloitte also said in the same period relatively new issues like energy efficiency and carbon emission policies have begun to influence the sector. The changing conditions in the sector are not only bringing new business models, but also requiring investors to adopt new perspectives and to restructure human resources. 'Energy sector comprises 2.5 pct of Turkish economy' “An indispensable element of economic growth, the electric energy sector comprised almost 2.5 percent of Turkey's economy, and between 2005 and 2009 the country's demand increased by almost 4.7 percent,” the report said, adding that demand will increase between 6.3 and 7 percent from 2009 to 2018. In order to meet this increasing demand, the private sector invested almost $3 billion in the electricity production sector in 2009, the report said, adding that this amount will be an estimated $4 billion in 2010.  'Recent privatizations changed Turkey’s energy sector' With the recently accelerated liberalization, the Turkish electric energy sector's complexion has significantly changed, the report said. The liberalization has created increased competition, and every day new actors are entering the sector. “The new regulations concerning the market structure and commerce, and privatizations in energy distribution and production, have reduced the public share in the sector and increased competition with evermore private investors, bringing about a restructuring requirement for the sector's actors, as well as a need to develop new proficiencies,” the report said. Deloitte also said the new business models need predictions concerning electricity demand and prices, sound planning and pricing for hydro- and coal-based electricity production and good management of commercial phases. The new business models require high-quality human resources not only in technical and engineering, but also in legal, economic and financial aspects. “The changing market structure brings with it many risks for participants and makes it obligatory that comprehensive and efficient risk management should involve developing corporate risk management strategies and even determining operational risk control points,” the report said. Deloitte prepares regular reports for the Prime Ministry’s Investment Support and Promotion Agency, or ISPAT, which are found on the institution's website. Deloitte previously prepared a global energy survey and a 2010 prediction report about the Turkish energy sector for the same institution. |
