THO Webinar: Energy Market Transition: Challenges and Opportunities10 Jul 20
On Thursday, July 9, 2020, THO hosted a webinar on the “Energy Market Transition, Opportunities and Challenges”. Featuring Deputy Minister of Energy and Natural Resources, Chair at the World Energy Council Turkey, Alparslan Bayraktar, and Former Deputy Assistant, Secretary of State for Energy, Sanctions and Commodities, Douglas Hengel.
THO was honored to receive two top-level experts on Energy, from Turkey and the United States to discuss recent dynamics in Turkey’s energy market, and global energy trends regarding both fossils and renewable energies.
Turkey’s energy market and policy
Mr. Bayraktar started the discussion by pointing out Turkey’s past and present policies in the domestic and international energy market. Turkey has a specific energy market structure, depending largely on energy importation, with 90% coming from crude oil, and 95% from natural gas. Turkey’s dependence rate is about 70% and called out for participating in the country’s deficit. Turkey’s energy policy has drastically evolved towards market transition since 2016. These challenging policies successfully changed the structure of Turkey’s market structure, from a vertical to a horizontal one, creating more opportunities for Turkey. This multi-level action plan, the Ministry of Energy and Natural Resources focused particularly on supply security, the utilization of local resources, market flexibility to investors, international pipeline projects, utilization of domestic coals and other natural resources, utilization of renewables. Four years ago, as Mr. Bayraktar specified, Turkey had started to invest heavily in infrastructure, proceeding with LNG underground projects. This transformation played a major role in Turkey’s energy transition and allowed the country to benefit from more competitive energy options.
COVID-19 Impacts on the Energy market
For both experts, the coronavirus pandemic caused unprecedented social and economic crises and market uncertainty. In order to comprehend the impacts of the COVID-19 pandemic on the global energy market, it is essential to compare its current structure with the few months prior to the pandemic, said Mr. Hengel. Early January, the energy market was a thriving market, with aspects such as a growing energy demand (primarily in OECD countries and Asia) or the world electrification. Prior to the COVID-19, the energy transition was speeding, but now, a lot of unknown has developed according to Mr. Hengel. As the energy market is “going back to normal”, i.e. meeting up with statistics of previous years, there is a much-needed responsibility coming from national governments and industries to facilitate the transition. However, Mr. Hengel shared with us his doubts about government priorities in the near future, along with his hope for certain policies and paths taken by some of them.
In the first half of 2020, Turkey registered slower demands, a cut in consumption, and investments in the Energy market compared to the previous year. Mr. Bayraktar highlighted the measures put in place for Turkey’s energy market during the COVID-19 pandemic. In a time where the market needed to be closely monitored, the Ministry of Energy and Natural Resources supported various market players, especially in the mining support, to provide financial sustainability and manage unwanted risks. Similarly, the Turkish government requested from the oil and gas sector to postpone fees and licenses until the end of the year.
Future prospects in a post-COVID-19 Era
Both experts are calling for a sustained energy-market transition at a crucial time. As the market conditions are particularly unstable, and the U.S presidential election is yet to come, our speakers are leading the path for constructive, creative, and pragmatic international partnerships for a transformative era. According to Mr. Bayraktar, Turkey’s energy market transition must be understood not solely based on green aims but also throughout the possibility to review Turkey’s import dependency and reduce insecurities in energy supplies. Following 2020, Turkey’s energy market transition would enter into a second flourishing development phase, with a renewed US-Turkey energy partnership, ambitious local production, and increased market liberalization in the gas sector.