2013-09-17 09:13:03 - New Energy market report from Business Monitor International: "Turkey Power Report Q4 2013"
BMI sees mounting headwinds facing the Turkish economy, and as a result, this quarter we have pencilled in a downgrade of our consumption and generation forecasts for 2013 and 2014. That said, the country's power sector remains relatively appealing when compared with its neighbours in the Central and Eastern Europe region. Recent dynamics have highlighted that a solution to existing energy-related imbalances is essential for the country's wider economy, making reforms and new investments in the power sector a top priority for the country. With our Country Risk experts anticipating that a challenging external financing environment will result in steadily deteriorating credit conditions in Turkey over the coming quarters - thus weighing on private consumption and fixed investment - we
see mounting headwinds facing the Turkish economy, and as a result the country's power sector. With BMI forecasting full year GDP growth to come in at just 2.8% in 2013, and then at 3.1% and 3.4% in 2014 and 2015 respectively, we have pencilled in a downgrade of the country's short-term power consumption growth, and revised generation accordingly.
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That said, a fairly positive long-term view remains in place, corroborated by regional- and country-specific sector dynamics over previous months. When compared to other power markets in Central and Eastern Europe (CEE), Turkey emerges as the clear outperformer as long-term macroeconomic and demographic fundamentals continue to support a positive outlook for power consumption, and thus generation. With our forecasts showing an average year-on-year growth of 6.10% in power consumption between 2013 and 2022, substantial investment in new generating capacity will be indispensable, suggesting that rewards on offer in the Turkish market will outweigh the risks. Thus, attracting significant attention not only from traditional European players, but also from an array of newly emerging companies looking to use Turkey as a springboard to penetrate nearby markets and/or display their ability to develop big ticket projects.
In addition, recent reforms and regulatory changes confirm our view that new investments in the power sector are seen as a top priority for the country:
* Aside from providing welcome finances, progress in the privatisation and liberalisation process should not only be read as positive steps for the power market, but also as an attempt by the government to boost its credibility domestically, and internationally. In March 2013 the Turkish government raised US$3.46bn by selling its last four power grids. Turkey privatised its 21 electricity distribution networks in H113, and its privatisation administration, OIB, is now reportedly in the process of launching tenders for up to two gigawatts of state-owned electricity generation capacity.
* After a lengthy tendering process, a Japanese-French consortium has won the contract to build and operate Turkey's second nuclear power station. The deal is worth an estimated US$22bn and was awarded to Japan's Mitsubishi Heavy Industries (MHI), Itochu Corporation and French utility group GDF Suez. The consortium will develop a nuclear power plant with up to four reactors in Sinop, located on Turkey's northern Black Sea coast.
* In addition, a new draft electricity market law was presented to the Turkish parliament in January 2013, setting out legislation for the creation and operation of a new Turkish energy exchange to be called Enerji Piyasi Isletme AS (EPIAS). Even assuming that passes, a further 12-18 months will be needed for the drafting of a secondary legislation, meaning the new market would be up and running in the second half of 2014. However, this is still a significant development for the country.
Report Table of Contents:
BMI Industry View
- Turkey Snapshot
- Table: Country Snapshot: Economic and Demographic Data
- Table: Country Snapshot: Power Sector
- Turkey Power Forecast Scenario
- Electricity Generation And Power Generating Capacity
- Table: Turkey Total Electricity Generation Data And Forecasts, 2011-2016
- Table: Turkey Total Electricity Generation Long-Term Forecasts, 2017-2022
- Table: Turkey Electricity Generating Capacity Data And Forecasts, 2011-2016
- Table: Turkey Electricity Generating Capacity Long-Term Forecasts, 2017-2022
- Electricity Consumption
- Table: Turkey Total Electricity Consumption Data And Forecasts, 2011-2016
- Table: Turkey Total Electricity Consumption Long-Term Forecasts, 2017-2022
- Transmission & Distribution, Imports & Exports
- Table: Turkey Electric Power Transmission And Distribution Losses Data And Forecasts, 2011-2016
- Table: Turkey Electric Power Transmission And Distribution Losses Long-Term Forecasts, 2017-2022
- Table: Turkey Trade Data And Forecasts
- Table: Turkey Trade Long-Term Forecasts
Industry Risk/Reward Ratings
- CEE Power Risk/Reward Ratings
- Table: Regional Snapshot
- Turkey Power Risk/Reward Ratings
- Key Policies And Market Structure
- Regulation and Competition
- Sustainable Energy Policies
- Turkey Power Projects Database
- Table: Major Projects - Power
- Central and Eastern Europe Regional Overview
- Table: Glossary Of Terms
- Methodology And Sources
- Industry Forecasts
- Power Industry - Data Methodology
- Generation and Consumption Data
- Electricity Generating Capacity Data
- Power Risk/Reward Ratings Methodology
- Table: Power Risk/Reward Indicators
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