Turkey Power Report Q1 2008

The new Turkey Power Report from BMI forecasts that the country will account for 9.66% of CEE regional power generation by 2011, and to remain a net exporter of electricity to neighbouring states.

BMI's CEE power generation estimate for 2006 is 2,006 terawatt hours (twh), representing an increase of 4.00% over the previous year. We are forecasting an increase in regional generation to 2,451twh by 2011, representing a rise of 22.14%.

CEE thermal power generation in 2006 is estimated by BMI at 1,247twh, accounting for 62.23% of the total electricity supplied in the region. Our forecast for 2011 is 1,527twh, implying 22.54% growth that raises the market share of thermal generation to 62.32% - in spite of environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Turkey's thermal generation in 2006 is estimated at 127.7twh, or 10.25% of the regional total. By 2011, the country is expected to account for 11.82% of thermal generation.

For Turkey, coal is the dominant fuel, accounting for 30.4% of primary energy demand (PED), followed by oil at 30.2%, gas at 29.0%, with hydro having a 10.5% share of PED. Regional energy demand is forecast to reach 1,724mn toe by 2011, representing 19.8% growth over the period. Turkey's 2006 market share of 6.58% is set to rise to 7.14% by 2011. Turkey plans long-term nuclear power construction, but currently makes no contribution to regional nuclear consumption.

Turkey's overall business environment can be considered unattractive attractive in a regional context, with high long-term economic risk, moderate long-term political risk and a high degree of energy importdependence.

It benefits from above-average forecast growth in power consumption and generating capacity, as well as some progress towards deregulation and privatisation. In the BMI Business Environment Ranking matrix, Turkey receives a higher composite score of 24, which ranks the country eighth out of nine states included in the CEE region.

BMI forecasts Turkish real GDP growth averaging 5.77% per annum between 2006 and 2011, up from 2007's forecast 5.5%. Total population is expected to rise from 73.9mn in 2006 to 79.0mn over the period, but GDP per capita and electricity consumption per capita are forecast to increase significantly.

The country's power consumption is expected to increase from an estimated 146.1twh in 2006 to 170.8twh by the end of the forecast period, while exports should rise from an estimated 29.9twh in 2006 to a forecast 65.8twh in 2011, assuming 6.5% annual growth in generating capacity.