Industrial development, trade opportunities and innovation with renewable energy in Turkey

This study exam­ines the co-ben­e­fits to indus­tri­al devel­op­ment and trade of increased deploy­ment of renew­able ener­gy in Turkey. The study method­ol­o­gy focused first­ly on defin­ing val­ue chains for the solar and wind ener­gy sec­tors in Turkey. This was done using licence and pre-licence infor­ma­tion from the Ener­gy Mar­ket Reg­u­la­to­ry Author­i­ty and a unique admin­is­tra­tive micro dataset (EIS) that includes all reg­is­tered firms in Turkey and their domes­tic and export trans­ac­tions. Sec­ond­ly, coef­fi­cients for the val­ue of pro­duc­tion and trade were cal­cu­lat­ed. Final­ly, pro­jec­tions on indus­tri­al devel­op­ment and import–export val­ues were esti­mat­ed accord­ing to four sce­nar­ios for increased renew­able ener­gy (RE) capac­i­ty.

 

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Key policy messages

Key pol­i­cy mes­sage 1: Turkey can sig­nif­i­cant­ly boost the val­ue of pro­duc­tion by increas­ing the share of renew­ables. With the deci­sion by the Turk­ish Gov­ern­ment to increase solar ener­gy capac­i­ty by 60 % and more than dou­ble the wind one over the next 10 years, the gov­ern­ment paved the way to increase fif­teen­fold the val­ue of pro­duc­tion along the solar val­ue chain, and over 31 % along the wind val­ue chain in the next ten years alone.

Key pol­i­cy mes­sage 2: There is room for more: By fol­low­ing more ambi­tious renew­able path­ways for Turkey, the expect­ed increas­es in val­ue of pro­duc­tion can be more than dou­bled across the wind pow­er val­ue chain and increased eight­fold along the solar val­ue chain, push­ing up the total val­ue of pro­duc­tion by more than 69 bil­lion USD in the next ten years com­pared to 2016.

Key pol­i­cy mes­sage 3: Fos­ter­ing com­pet­i­tive­ness in man­u­fac­tur­ing and clos­ing the tech­nol­o­gy gap between imports and exports in both the solar and wind sec­tors is cru­cial to fur­ther improv­ing the trade bal­ance in Turkey’s renew­able ener­gy sec­tor. In solar ener­gy, 48 % of Turkey’s imports are high-tech­nol­o­gy com­po­nents where­as their share of exports is only 4 % (in the wind sec­tor these shares are 19 % and 2 % respec­tive­ly). Giv­en the increas­ing trade deficit and the fact that renew­able ener­gy equip­ment main­ly com­pris­es high­er-tech­nol­o­gy com­po­nents, invest­ing in research and devel­op­ment (R&D) and com­pet­i­tive­ness in those sec­tors, as part of a local­i­sa­tion pol­i­cy, will increase the val­ue-added of Turkey’s indus­tri­al pro­duc­tion.

 

 

Year of pub­li­ca­tion: 2019

Edi­tors: Mara Gomez, Pinar Ertor, Sebas­t­ian Hel­gen­berg­er, Lau­ra Nagel – IASS Pots­dam and Istan­bul Pol­i­cy Cen­ter (IPC), Saban­ci Uni­ver­si­ty

Tech­ni­cal imple­men­ta­tion: Bengisu Özenç, Efşan Nas Özen – Coben­e­fits researchers at Istan­bul Pol­i­cy Cen­ter (IPC), Saban­ci Uni­ver­si­ty

Sug­gest­ed cita­tion: IASS/IPC. Indus­tri­al devel­op­ment, trade oppor­tu­ni­ties and inno­va­tion with renew­able ener­gy in Turkey. Assess­ing the co-ben­e­fits of decar­bon­is­ing the pow­er sec­tor. Potsdam/Istanbul: IASS/IPC, 2019.

DOI: 10.2312/iass.2019.032

 

This study is part of a 2019 series of four stud­ies assess­ing the co-ben­e­fits of decar­bon­is­ing the pow­er sec­tor in Turkey, edit­ed by IASS, IPC, EPRA and IET: