Forecasts for Turkish energy markets 

At the end of each year, Energy Analysts are expected to make projections for the next year. Economists make forecasts, social scientists make political forecasts, we energy analysts make energy forecasts. Some of these predictions hold, many do not.

For Energy Markets employees, since 2013, at the end of each previous year, I make predictions for the next year. What is written here is purely the personal opinions of your author. In the following year, many things happen that affect the markets. The political preferences of the political administration change. May 2023 Turkish General Elections are approaching, optimistic economic, financial and political policies come into play before the election, and domestic and foreign politics inevitably give different directions to economic events. We all need to make short-medium-long-term forecasts in order to manage our business and direct investments. Together, we draw a forecast for the next year, then we make corrections in our forecasts according to the events that developed during the year.

Electricity production-consumption increased by +7% in 2022 compared to the previous year. Fossil fuel consumption remained almost the same due to rising prices. The prices of fossil fuels almost doubled, sometimes tripled, prices fluctuated. It was impossible to give a long-term price. Due to the Ukraine war and the Covid-19 outbreak, current events have developed so much that I had to renew the article many times.

Since the beginning of 2020, we have been faced with the new Covid-19 virus epidemic that occurs once in a century. We, 65+ years old, have been closed for a long time in the spring and autumn of 2020. The effect of the Corona pandemic seems to have eased now. However, even if we are protected from Corona infection, old age diseases such as heart, diabetes and osteoporosis started to hit us all. Sudden heart attack cases have increased dramatically all over the world. Mask-hygiene-distance gained importance. Then came the mutations, Delta from India, and then the Omicron variant from South Africa. We got two doses of Sinovak, then two doses of Biontech.

Istanbul Atatürk Cultural Center opened, I watched many concerts and operas. I was fascinated by the architecture. Ankara Presidential Symphony Orchestra’s new building has been opened, a wonderful Gewandhous design has been constructed, the audience take seats around the orchestra, the acoustics are great in the middle, the automatic entry-exit payment system in the underground garage allows the cars to be evacuated in a short time, we congratulate the architects of both great architectural works.

We have been at home again 24/7 for a long time, we have no other topic to talk about except the upcoming 2023 general elections, the Ukraine war and the Covid-19 outbreak. Although global wrong policies are implemented, late and incomplete decisions are made, and negative comments are made. Covid-19 epidemic adjusts every place, every administration, every country, forcing decision makers in the direction they should be. The number of people who use public transport is decreasing, the elderly do not leave their homes, they postpone their health needs, they postpone their doctor’s appointments, they go out with their own cars, the roads are in a traffic jam. 

Payments to other investment projects were delayed due to the fear of the epidemic. Limited resources were directed to city hospitals, funds were provided for unfinished hospital constructions, and construction was accelerated. Istanbul Anatolian Başıbüyük and Başakşehir City Hospitals on the European side, Ankara Etlik City Hospital were opened rapidly. Ankara Bilkent City Hospital has become a specialist center on pandemics. Hacettepe Ankara TIP İbniSina hospitals specialized in treatment. Domestic production ICU (intensive care units), medical ventilator mass production accelerated, health personnel needed by new hospitals were recruited from the young staff of old hospitals, family physicians were appointed, and financial support was given to the construction of “city hospitals” in all provinces. The herd immunity advantage of the young population came into play. There are still anti-vaccine opponents, it’s probably too early to say right or wrong. The possibilities for the vaccine to make other conflicts arose. Even vaccine manufacturers cannot give absolute guarantees. Before we get vaccinated, the risk is mine, they have us sign the papers. With the Biontech vaccine, the spread of the pandemic has visibly decreased. Cases began to be seen mostly among those who were not vaccinated. 

Protection, mask, hygiene, distance measures were very effective. Being outdoors in the summer has activated the distance measure.

Oil prices in the world have risen to 80-90 US dollars per barrel these days. There has been a huge increase in natural gas prices all over the world. Coal production conditions have changed. Local coal will no longer be extracted from underground mines so easily. Only to a limited extent mechanized unmanned underground mines can operate. Thermal power plants will be completely idle in the future.

Wind, solar, hydro resources, which do not require manpower, will gain importance. After Covid-19, we will return to completely renewable energy-oriented sources. Investments will quickly flow into renewable power plants.

GOP27 Sham-El-Sheikh meetings revealed the turnaround from fossil fuels. Fossil fueled thermal power plant investments will decrease over time. Renewable energy investments will increase rapidly. Global warming will be tried to be limited to +1.5C. The arrival of politicians and celebrities in their private jets to GOP27 meetings received a lot of criticism.

The Ukraine-Russia war affected not only the neighboring countries, but the whole world. Europe stopped buying fossil fuels from Russia. It accelerated its renewable energy investments. The thermal and nuclear power plants that were closed have started to be opened again. In all western countries, there were decreases in electricity production and consumption in 2020-2022. In our country, it was announced that there was a minor change in energy production in 2022 compared to the previous year. Our electricity production is 334+ billion kWh, our installed power is 103+GWe in 2021, and our peak (maximum) energy draw is 55+GWe in August. By the end of 2022, our Natural Gas consumption will be 61+ BCM (billion Sm3), our lignite production will be 85+ million metric tons, our hard coal 1.2 million metric tons, our imported coal imports will be 50 million metric tons. Actual figures will become clear by the end of 2022. The relative decrease in production activities during the Covid-19 process has reduced the demand for electricity. We did not go on long journeys on the highways – we could not. Most retirees preferred to spend the winter in their summer cottage by the sea or in their country house in their hometown. They installed the stove, started the air conditioner, and had a combi boiler connected if there was natural gas. Houses in big cities remained empty. Cars waited for months in parking lots in front of the door. Petroleum consumption decreased. Due to the economic crisis, gasoline prices have increased non-stop.

Eurasia Review