1. POTENTIAL OF RENEWABLE ENERGY RESOURCES IN TURKEY An Assessment of the Present Situation Baha KUBAN-Eurosolar Turkey AGRENER 2006 6-8 June 2006 Campinas Brazil

2. TURKISH ENERGY PANORAMA 2005 numbers Installed power38,902 MW Production176 billion kWh (capacity 213 b kWh) Consumption160 billion kWh þ 1984 – Public monopoly ended þ 1993 – Public utility divided into three; production, distribution and sales þ 1994 – Build,Operate,Transfer (BOT), Build, Operate(BO) laws enacted þ 1996 – International arbitration in the energy sector þ 2001 – Electricity Regulation Board (EPDK) PublicPrivate 200170 %30 % 200259 %41 % 200540 %60 %

3.  Energy consumption is comparatively low CountryCommercial Energy (kgpe/person) Electrical Energy (kWh/person) Canada773016349 USA811013388 Japan40308008 France43407175 Germany42006482 Italy29504949 Spain28604576 Greece25704261 Bulgaria24203932 Turkey11701797 China840895 India490416 World16402252

4. þpopulation growth rate estimates are relatively high þurbanization rates very high 19992000200520102022 Population 64.465.369.874.183.4 Rate (%) 1.51.41.31.21.0 þ forecasted GNP growth rates are relatively high 19992000200520102022 Rate of increase of GNP -6.44.66.77.76.8  very high rate of increase of annual energy demand; ~8-9 %

5. TEAŞ (PUBLIC UTILITY)NATIONAL TOTAL Primary ResourcesProduction(billion kWh) %Production % Fuel Oil 1.4 2.5 9.3 7.0 Diesel 0.2 0.3 0.2 0.2 Coal 1.9 3.6 3.1 2.4 Imported Coal 1.1 0.8 Lignite 17.3 32.1 30.9 23.4 Natural Gas 16.7 31.1 62.7 47.3 LPG 0.4 0.3 Nafta 1.8 1.3 Geothermal 0.1 0.2 0.1 0.1 Total Non-Hydro 37.6 69.8 110.6 83.5 Hydro 16.3 30.2 21.9 16.5 Wind 0.1 Non-Hydro Distribution of consumed energy to primary resources

6. INCREASED DEPENDENCE ON NATURAL GAS First natural gas supply agreement, 1987 – Soviet Union 513 million m 3  14.2 billion m 3 in 13 years 27 times increase ! Supply AgreementsAmount (billion m3/year) dateduration (years) Russian Federation6198725 Algeria4198820 Nigeria1.2199522 Iran10199625 Russian Federation16199725 Russian Federation8199823 Turkmenistan16199930 Azerbaycan6.6200115

7. Natural gas supply agreements and the explosion of NGCC power plants 100 % buy-back guarantee Unit price guarantee per kWh Public utility capacity utilization, 50 % in 2002, 30 % in 2003 Another 6,000-10,000 MW licences given for 2003-2005 %100 buy-back kWh price 6c/kWh and higher (this compared to 2c/kWh public hydro, 3c/kWh public thermic THUS; 2 billion US$ transferred to private utilities in 2002, 4.7 billion US$ transferred by the end of 2003 Dependence on foreign fossil fuel imports~ 15 billion US$/year

9. RENEWABLES POTENTIAL LARGE HYDRO-ELECTRIC power plantsMWannual output (GWh) Operating Public931008534239 Private217262905 Under Construction Public2926688470 Private813884898 Planned Public2621026840420

10. LARGE HYDRO Contribution to total Operating30% Under Construction41% Planned67% In Europe, hydro-electric potential in Turkey 2nd best after Norway Theoretical potentialTechnically feasibleEconomically feasible 433,000 GWh/year216,000 GWh/year123,000 GWh/year

11. SMALL HYDRO-ELECTRIC POTENTIAL. UNIDO definition, small Hydro: < 10MW. Contribution of small hydro to total today ~% 0.04. Black Sea coast particularly suitable. Readily available small hydro potential: ~4000 MW. 18% of total MWs, 30% of hydro power today

12. WIND Turkey is calculated to have the highest wind energy potential in Europe... CountryArea (1000 km2) Wind class>3 (1000 km2) Regional potential (km2) Technical Potential GW TWh/year Turkey7814189.96083 166 Austria84402002 3 Belgium3172802 5 Denmark43 172014 29 France5472165,08042 85 Germany357391.40012 24 UK2441716.84057 114 Greece132732.64022 44 Italy3011944.16035 69 Spain5052005.16043 86 Norway3242174.56038 76

13. Western Turkey Wind Resources Wind Power Density (watts per square meter) at 50 m

14. Contribution to national electricity production is almost zero presently! CountryInstalled Capacity (MW, 2002 1st half) Growth rate (%) Germany984112.4 USA42720.3 Spain373712.0 Denmark25711.5 India16288.0 Italy7307.0 Holland5329.9 UK4995.3 China4080.9 Japan35111.1 Greece3114.3 France12810.4 Turkey190.0

15. BUT ! New Renewable Electricity Law (2005) Mainly supporting Wind and Hydro, Situation after Legislation, June 2006 Construction (Due to finish beginning of 2007) 1400 MW ( 38 projects ) Approved 40 MW Applied3700 MW ( 121 projects )

16. PHOTOVOLTAIC POTENTIAL “ Photovoltaics in 2010 ”, EU 1996. Data from 1990 Rooftop area available for solar electricity in Turkey: 378 km 2 (homes, offices, public buildings and factories). PV capacity (Wp)= Area (m2)x standard irradiance(W/m2)xEfficiency* PV electricity generation (MWh/year)=PV Capacity(MWp)xIrradiation(kWh/m2.year)xEfficiency** Efficiencies: Module* %12.5, System** (BOS) %70 Standard Irradiance: 1000 W/m2, Turkey 1700 kWh/m2.year RESULT :PV power 47.204 MWp PV electricity generation56.173.035 MWs/year Total consumption(1990) 55.906.000 MWs/yıl Contribution% 100.5 TODAY, PV ELECTRICITY PRODUCTION IN TURKEY IS LIMITED TO OFF-GRID TELECOMS, FORESTRY, HIGHWAYS AND MILITARY APPLICATIONS, IN TOTAL ~1 MW.

17. Solar Thermal Avarage suntime 2700 h/year Solar thermal potential ~90 million tpe (today total consumption ~35 million tpe) Solar collector market  >200 manufacturers  25 % increase/year  55 % installed in the Meditteranean region  2001 sales 600.000 m 2  Total collector area > 5 million m 2 (7 million?)  2005 estimate (conservative) ~10 million m 2

18. Geothermal With 1000 discovered fields, one of the best potentials for geothermal energy. 170 fields > 35 o, several > 170 o Estimated to be ~31.500 MWt (5 million homes, About 30% of total) Present state: Direct heating: 970 MWt, Electricity: 20 MWe (Denizli) 2010 estimate: 3500 MWt, 500MWe 2020 estimate: 8300 MWt, 1000 MWe

19. BIO - FUELS December 2003 - Petroleum Market Law 2% Bio-fuel in diesel 144 bio-diesel firmsproduction 1.5 million tons 3 billion US$ sector Traditional Biomass~ 1/3 of all domestic heating consumption Bio-gas potential2.8-3.9 billion m 3 21.5 MW electricity from municipal waste plants being constructed

20. Losses in Transmission and Distribution~ 20 % EU Avarege~ 10 % Large potential for Energy Efficiency ~ 30% of present consumption Avarage Turkish building consumes x3 energy compared to German bldg. Misplaced transportation policy !dependence on road transport

21. 20 YEARS BALANCE SHEET OF POLICY IN THE ENERGY SECTOR Expressed aims of energy sector privatization and de-regulation imposed by the IMF-WB; þ No alternative, due to empty public coffers indebted state  Cheaper electricity  Technological upgrading  Break-up of public monopoly !

23. Typologies of Industrial Innovation conservative innovation ; “...those innovations that improve and deepen the present system ” radical innovation ; “...those innovations that challenge the present system components, both institutional and technical ones, require a new set of technical, social and cultural reference points "

24. energy system today distributed energy system AssetsExpensive power plants and grid system Small, modular DistributionGrid systemProduction where needed CapabilitiesLarge,complex systems engineering, management and regulation Production engineering, producty development, R&D, marketing Control paradigmLarge firmConsumer Finance> 50 million $, cut- throat competition, very profitable Consumer credit, <25,000 $ Learning opportunities (# product/year) < 1 power plant/year> 1000 products/year