Tamer Çetin

Reforming Turkish Energy Markets

Turkey has been reforming its energy markets since the 1980s, culminating in two major bills in the early 2000s. The country has restructured electricity and natural gas markets, establishing an independent regulatory agency (EMRA) and passed legislation on renewable and nuclear energy. With these regulatory reforms, Turkey, as a candidate country for accession to the European Union (EU), has aimed to direct the energy markets to a more competitive environment in parallel with EU energy directives. This book contains an analysis of regulatory reforms in Turkish energy markets (electricity, natural gas, renewable and nuclear energy), the impact of these reforms on countrys energy portfolio and role in global energy trade, especially between the EU, the Caspian, Caucasus, and Central Asia. Finally, the book concludes with recommendations for Turkish energy policy. The authors are expert scholars who have written extensively on Turkish regulatory reform and energy economics and who have broad knowledge of global energy market dynamics. The book will be a unique guide for those concerned with the different areas of the Turkish economy and international audiences interested in energy markets of Turkey and surrounding regions, making the book of interest to not only researchers in academia but also industry practitioners, regulators and policy makers as well.

Regulation, Deregulation, and Competition in the Turkish Airline Industry

This chapter focuses on the effects of regulation, deregulation, and competition in the Turkish airline industry that has long been dominated by Turkey’s state-owned airline company, Turkish airlines (THY). Before 2003, the industry was not yet open to competition. The necessary legal environment has not yet been established to ensure that private airline firms other than THY could also operate especially in the scheduled domestic flights and cargo transport. Thirteen firms along with THY that operated in the unscheduled flights were inadequate to trigger competition, to increase demand, and to attract investments in the entire industry. The airline deregulation movement in 2003 opened the market to competition. The movement released entry to the industry. Fares are beginning to be determined by competition. This chapter analyzes the pre- and postreform structure of the industry. Accordingly, we deal with this to reveal the effects of deregulation over industry structure and quality of service. Besides, by analyzing the developments in the industry, we aim to present how the postreform structure of the industry is reshaped.

THE EFFECTS OF ECONOMIC REGULATION IN THE ISTANBUL TAXICAB MARKET

This paper discusses the regulation of the Istanbul taxicab market and its consequences. While price and entry regulations are common to many taxi markets, there are significant differences in their institutional frameworks. We examine the problems of the Istanbul market and offer recommendations to improve its efficiency.

Alternative Energy Options for Turkey

Turkey, like many other countries, has been promoting renewable energy technologies and energy efficiency programs, but the country had a later start than most to initiate a legal and regulatory framework and to develop targeted support programs. A definition of renewables was introduced via an amendment of the electricity law in 2003 but the Renewables Law was not passed until 2005. Significant new wind capacity was added between 2009 and 2011. As of the end of 2011, more than 1,600 MW of installed wind capacity was reported.

Policy Recommendations for Turkish Energy Future

Turkey has been growing fairly rapidly since the 1980s; energy demand has increased accordingly, albeit at slower rates than in emerging economies such as China thanks to Turkey’s lower energy intensity. Turkey does not have significant production of oil and gas; and most of domestic coal production is lignite, which has lower heat value. As such, the country’s dependence on imported energy has increased over the years from just crude oil and oil products to natural gas since 1986 and coal more recently. As with all import-dependent countries, energy security has been a primary driver of Turkish energy strategies. But, energy security seems to have gained a renewed importance with the price of oil seemingly having reached a higher plateau since 2003–2004.

The Reform of Natural Gas Market in Turkey

The use of natural gas in Turkey has increased by 96% in Turkey. Today, total natural gas consumption of Turkey is around 38.2 bcm per annum and Turkey produces only 690 mcm of natural gas. Accordingly, 98% of gas is imported from Russia, Iran, Azerbaijan, Algeria, and Nigeria via pipelines and LNG. Turkey’s natural gas demand is obviously dependent on imports and especially the Russian gas that meets around 45% of consumption in Turkey. Moreover, the dependency of electricity generation on natural gas in Turkey is about 47 and 51% of natural gas is used for electricity production. Although the importance of natural gas in Turkey has increased over time, the market continues to witness crucial issues in terms of natural gas policies of Turkey. This section scrutinizes the regulatory reforms, policy issues, and the evolution of market structure in the Turkish natural gas market, and the geopolitical role of Turkey between the gas-rich regions and Europe.

Regulatory Reform and Competition in the Turkish Electricity Industry

The growth of electricity demand in Turkey has historically been high, growing at an average rate of about 7% per year between 1990 and 2010. As seen, there have been a number of years with exceptionally low growth, namely 1999, the year of a devastating earthquake, and the years 1994, 2001, and 2008–2009, which were years of severe economic crises.