Glob.11 Busıness Rcports TURKEY POWER 2015 I PRE-RELEASE Turkey, Turkish Stream and Market Liberalization Transparency and market reform in the wake ofTurkish Stream Energy has long been the currency in which regional power is brokered, perhaps nowhere more so than in Europe. Sixty years ago, when Europe was utterly divided during World War il, Turkey, then a fledgling republic lacking in any known hydrocarbon resources, stood largely politically neutral; a position made possible because it lacked one of the most strategic prizes for the belligerents in the European theater: oi\. lnstead, in 1941, when Hitler launched Operation Barbarossa and invaded the Soviet Union, attention turned east to Baku, which was the focus of Soviet oil production and offered a lifeline to the Third Reich in its quest to procure enough oil to sustain its military campaigns. Turkey, in spite of its strategic geopolitical position, was inconsequential . Far be it from the case today. Turkey is stili energy poor but, due south of Crimea, it has seen its relevance - and Ankara's clout - grow rapidly over the past year as a transit state that straddles the geographical and ideological precipices of Europe, the Middle East and Russia. Turkish Stream, Gazprom's proposed pipeline alternative to the recently cancelled South Stream through Ukraine, could help Russia remain Europe's predominant supplier of natura! gas. The pipeline is slated to carry 63 billion cubic meters of gas through the Black Sea to Turkey before then connecting to Southeastern Europe. Geopolitics, though, have overshadowed what could be one ofthe most interesting macroeconomic and political consequences of the project: a rewiring of the region's energy framework through Anatolia, and through it, the structural reform of Turkey's energy sector. To Turkey, the idea of becoming an energy hub has long seemed a pipedream. Hosting one of the world's most quickly expanding electricity markets and one of the world's most import-dependent energy sectors (98% of Turkey's natural gas, which accounts for the lion's share of total power generation, is imported), the aspiration that Turkey might one day become energy self-sufficient remains far out of reach. in fact, the larger effect that Turkish Stream could have on the Turkish energy sector may be in its transformative quality. A state-controlled market until but ten years ago, Turkey's power sector has privatized rapidly; yet BOTAŞ, the state-run organization charged with managing the country's oil and natura! gas pipeline network, continues to hold monopoly rights overthe import and sale of natura! gas. The most immediate consequence of this has been the delayed expansion of one of the most fundamental structures of Turkey's energy industry: its pipeline network. While in the past decade, Turkey has discussed the construction of additional pipelines from numerous locales - Azerbaijan, ıran, lraq, and lsrael - each of these projects has failed to materialize because of the lack of private sector involvement. Obahan Obaoğlu, secreta,y general EUD, Electricity Producer's Association On a more fundamental level, Turkey lacks transparency as an energy market, which is a legacy of the state's historical involvement in the market, and is reflected in energy pricing. Obahan Obaoğlu, secretary general of EUD, the Electricity Producer's Association, said: "Price remains one of the core issues of the sector: the pricing system is very vague and there is a lack of transparency; it is impossible to predict future pricing or to talk about a liberal pricing system at the moment. For this reason, prices are not based on the actual cost of production; they are based on estimates." bte /'ENERG� TURKEY'S LEADING COMPANY iN TRANSMISSION LINES, DESIGN, TOWER MANUFACTURING AND INSTALLATION BTE Energy was established in 2008 by a group of people and companies with a 30 year history of experience and success both in domestic and overseas markets. Baran Çelik Galvanizi ng Company, foundi ng partner of BTE Energy, operates in a 9 ,000m2 indoor and a 15,000 m2 outdoor area with a steel structure fabrication capacity of 36,000 tons and 40,000 tons per year of galvanizing capacity. Global Business Reports I J /,Et G
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