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Growth in Turkish Electric Grid: Expanding demand spurs investments [free access]

June 9, 2016

The power system in Turkey has witnessed record expansion over the past 10 to 15 years. Sustained investments have been made across the power generation, transmission and distribution segments in order to cater to the rapid expansion in the country’s electricity consumption. The trend of high investments in the electricity sector is projected to continue in the coming years fuelled by the country’s projected economic growth. The investments will receive an additional push given Turkey’s expanding role in the European Network of Transmission System Operators for Electricity (ENTSO-E).

 

Expanding electricity sector

Turkey stands out in the Southeast European region as it has steadily reported an average annual gross domestic product (GDP) growth of 6 per cent during the decade between 2002 and 2012. Since 2013, the growth momentum has lost some steam, with GDP expanding at an annual average rate of 3 to 4 per cent. The upswing in growth since the economic crisis of 2001, often termed as the Turkish miracle, has been a result of firm economic and political reforms targeted at reserving a membership in the European Union (EU).

 

Sustained economic growth has fuelled Turkey’s electricity consumption. According to Turkey’s state transmission grid operator Türkiye Elektrik Iletim A.S (TEİAŞ), electricity consumption increased at a compound annual growth rate (CAGR) of 5.4 per cent between 2005 and 2014. This was significantly higher than the average consumption growth across Europe, which stood at a CAGR of about 0.7 per cent. The expanding demand was met through corresponding growth in generation capacity. During the given period, the generation capacity in the country expanded at a CAGR of 6.7 per cent.

 

The country’s transmission network also underwent a substantial change over the past decade in response to the investment efforts made by TEİAŞ. Between 2005 and 2014, the company invested more than TRY5.5 billion to add more than 7,800 km of transmission line length, 55,900 MVA of transformer capacity and 471 substations.

 

Table 1: Electricity sector growth in Turkey

 

2005

2010

2014

Installed capacity (MW)

38,844

49,524

69,520

Electricity generation (GWh)

161,956

211,207

251,963

Electricity consumption (GWh)

160,794

210,434

257,220

Transmission line length (km)

45,092

48,252

52,899

Transformer capacity (MVA)

71,219

99,235

127,132

Substations (number)

1,031

1,264

1,502

Source: TEİAŞ; Global Transmission Research

 

Table 2: Voltage-wise growth in transmission line length over the past five years (km)

Voltage

2010

2011

2012

2013

2014

CAGR (2010-14)

380 kV

15,559

15,978

16,344

16,808

17,683

 3.25

220 kV

 85

 85

 85

 85

 85

 0.0

154 kV

32,608

32,831

33,481

33,943

35,132

 1.88

Total

48,252

48,894

49,910

50,835

52,899

 2.33

Source: TEİAŞ; Global Transmission Research

 

Network growth drivers

Growth momentum in the transmission segment is expected to continue in the coming years in response to the expanding consumption demand and generation supply. It is estimated that between 2016 and 2025, electricity consumption in Turkey will expand at a CAGR of 5.4 per cent, while the overall growth in Europe will be limited to only 1.1 per cent. The high growth is expected to continue in the coming years as about 15 GW of generation capacity will be added in the country during the 2016–19 period, given the projects under construction. Additionally, 11.5 GW of generation capacity is likely to be commissioned during the 2020-2025 period.

 

Network investments hold a key significance in Turkey’s future energy strategy. The country is focusing on harnessing its renewable energy potential so as to reduce dependence on imported natural gas for power generation. The target is to increase the share of renewable energy in the total energy mix to 10 per cent by 2019. The economic viability of proposed renewable energy projects, especially solar and geothermal, depends critically on the timely availability of evacuation facilities.

 

Developing additional transmission capacity will also help in avoiding overloading the existing lines and maintaining grid security. Notably, Turkey suffered a major blackout on April 3, 2015, which affected almost every province and was caused by the sudden shutdown of five transmission lines. The grid thus needs to be modernised by intergrading information and communication technologies so as to ensure uninterrupted and high-quality energy supply across the country.

 

Proposed network investments

According to TEİAŞ’ 2015 Investment Plan, between 2016 and 2020, Turkey plans to add about 13,723 km of transmission lines and 36,400 MVA of transformer capacity. Of this, about 8,186 km of lines and 20,750 MVA of transformer capacity is being developed at the 380 kV voltage level, while the remaining is coming up at the 154 kV level.

 

According to recent news reports, the Ministry of Energy and Natural Resources has announced that TEİAŞ will invest about TRY10.2 billion between 2016 and 2019 on the development of 14 major transmission projects. Of these, four projects are expected to be completed by the end of 2017. These include the transmission line to connect the Zonguldak power project to the İzmit-Istanbul region and the Osmanca–Ada 2–Paşaköy transmission line. Another 10 projects, which are part of the company’s mid-term action plan, will be completed during 2018 and 2019.

 

Table 3: List of key projects in Turkey

Name of Project

Voltage (kV)

Length (km)

Estimated cost (TYR million)

Scheduled completion

Sütlüce (İNTERFACE)–Gelibolu–Unimar transmission line

380 AC

313

154.0

2016

 İspir–Bağıştaş transmission line

380 AC

267

92.0

2017

Akkuyu NPP–Seydişehir transmission line

380 AC

265

90.0

2018

Kayabaşı–Eser transmission line

380 AC

236

73.7

2017

Borçka–İspir–Erzurum transmission line

380 AC

222

80.0

2017

Akkuyu NPP–Konya 4 transmission line

380 AC

218

156.0

2018

Verbena CCPP–Alibeyköy transmission line

380 AC

168

123.0

2017

Kurşunlu–Bağlum–Sincan transmission line

380 AC

154

95.0

2017

Aşağı Kaleköy–Batman 2 transmission line

380 AC

145

49.0

2017

Mersin CCPP–Mersin–Ereğli transmission line

380 AC

145

53.0

2017

Akkuyu NPP–Mersin transmission line

380 AC

141

48.0

2018

İspir–Köse transmission line

380 AC

135

51.0

2018

Cizre–Kızıltepe transmission line

380 AC

133

45.0

2017

Yukarı Kaleköy–Tatvan transmission line

380 AC

130

45.0

2018

Yeşilhisar–Kozan transmission line

380 AC

117

75.0

2017

Hadımköy GIS–Çorlu transmission line

380 / 154 AC

103

90.0

2016

Bandırma CCPP–Gemlik transmission line

380 AC

100

75.0

2018

Note: NPP – nuclear power plant; CCPP – combined cycle power plant; GIS – gas-insulated switchgear; AC – alternating current

Source: TEİAŞ

 

Strengthening interconnections

Cross-border interconnection lines form an important component of the transmission network. Turkey has 11 interconnections with Georgia, Armenia, Azerbaijan, Iran, Iraq, Syria, Bulgaria and Greece. Not all transmission linkages have been operated at the designed ratings or capacity. This has been the case with interconnections with Armenia, Greece and Bulgaria, where the lines have either not been operated or have been maintained at lower voltages.

 

Turkey achieved a major milestone in January 2016 when it became an observer member of ENTSO-E, which enables TEİAŞ to attend groups and task forces within the association. Earlier, on April 15, 2015, Turkey was permanently connected to ENTSO-E’s continental Europe grid following a negotiation process and trial synchronisation process that started in September 2010. Turkey’s connection to Europe’s grid will prove to be extremely beneficial for the country as it will increase import-export opportunities and help improve network reliability. It is estimated that with a permanent connection, Turkey will be able to increase its electricity trade volume with Europe via Greek and Bulgaria to about 1,000 MW from 550-400 MW presently. In addition, Turkey will be able to decrease its reserve generation capacity from 900 MW currently to around 400 MW.

 

At present, Turkey is engaged in the development of several new cross-border lines. This includes the 111-km, 380 kV Van–Sinir transmission line, which will connect the Turkish grid with Iran. The project also includes the construction of a 600 MVA back-to-back DC converter station at Van in Turkey. Also under construction is a 400 kV transmission link with Iraq. On the Turkish side, the project entails the construction of the 131-km-long Gercüş–Ilisu–Cizre transmission line. From Cizre, the line will connect to Mosul in Iraq.

 

Turkey is also planning a new interconnection with Romania. The project will either entail developing a 400 kV high voltage direct current (HVDC) submarine cable link via the Black Sea or transfer through the Bulgarian network via overhead lines. With Syria, the construction of another 400 kV transmission line with a DC back-to-back station in Turkey is under consideration. In addition, Georgia’s Energo-Pro is developing the 17-km, 154 kV Batumi–Muratli transmission line of 350 MW capacity between Georgia and Turkey. The link is expected to be commissioned in 2016. Turkey is also engaged in a feasibility study on the Azerbaijan–Georgia–Turkey (AGT) power bridge, which envisages greater interconnection of the high voltage networks of the three countries from a sub-regional perspective. 

 

Future interconnections in which Turkey is likely to play an important role include the Medgrid and the Black Sea Electricity Ring projects. Some progress has already been made under these projects with the synchronisation of Turkey’s grid with the ENTSO-E system. With this, Medgrid has two routes available for closure—one towards Spain to the west end and the other towards Turkey to the east end. The Black Sea Electricity Ring is a 500 kV HVDC project aimed at stabilising Georgia's transmission network and facilitating electricity trade among Georgia, other south Caucasus countries, and Turkey. Construction of the new 400 kV link between Turkey and Georgia under the Black Sea Regional Transmission Planning (BSRTP) Project is a complementary part of the Black Sea Electricity Ring project.

 

Among other long-term investments is a proposed plan to link Arab countries through a common power grid. The Arab countries plan to eventually connect the Arab grid to Turkey, which is already linked to the rest of Europe. This will enable both Arab and European countries to tap into each other's energy resources. Studies on how best to create such a unified grid are underway.

 

Conclusion

The upswing in Turkey’s electricity sector depends directly on the country’s economic growth momentum, which is threatened not only by the possibility of economic stagnation in the Euro area but also by the political unrest in its neighbouring countries. However, increasing private consumption, stabilising inflation and lower interest rates and production costs are providing the much needed positive push to the investment scenario.

 

In the electricity sector, the government has developed impressive plans to add generation and transmission capacity in the country to cater to the growing power demand. Investments in developing interconnections are only likely to increase as Turkey's importance in the energy market grows as a regional energy hub.