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.
Key policy opportunities:
Policy opportunity 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.
Policy opportunity 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.
Policy opportunity 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.
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: