Electricity produced by wind and solar power plants saved Turkey USD 7 billion over the last 12 months as the country would have had to compensate for the shortfall with imports of natural gas. Turkey generated almost one third of its electricity from gas last year.
Wind and solar power generation lowered Turkey’s import bills by preventing fossil fuel imports worth USD 7 billion fossil fuel over the last 12 months, according to an analysis published by energy and climate think tank Ember.
In the following months, approximately USD 700 million in savings is expected each month at current gas prices.
Ember’s analysis reveals that the recent surge in electricity prices in Turkey has been led by a global spike in gas costs on a global scale. The country’s annual gas consumption set a new record in 2021 – 61.6 billion cubic meters, of which 45% was imported from Russia.
Sevenfold rise in gas price in a year
The sevenfold rise in gas prices in the past year has been followed by the sixfold increase in the cost of electricity, the analysis reads.
International gas prices have surged from between USD 20 per MWh and USD 25 per MWh, from the first quarter of 2021, to the current USD 100, but the Turkish government has set the natural gas tariff price for power generators at USD 65 per MWh.
The electricity price for the households is USD 50 per MWh to USD 85 USD per MWh while the average monthly wholesale power prices have recently stayed between USD 120 per MWh and USD 130 per MWh, according to the analysis.
Wind power saved USD 5 billion, photovoltaics contributed USD 2 billion
Wind and solar power plants produced 46.3 TWh in the year through April 30. If all the power was generated by gas-fired plants, the import of gas would cost USD 7 billion, the authors said.
Wind power plants, with an output of 32.2 TWh, have saved USD 5 billion, and solar power plants added an equivalent of USD 2 billion.
Ember pointed out that the production of energy from renewables prevents fossil fuel use and imports.
The energy crisis calls for quick solutions like solar power
In order to speed up investments in wind and solar power, Turkey needs a significant expansion in auctions and reserved capacities and the elimination of barriers that prevent the free market, the think tank stressed.
According to Ufuk Alparslan, electricity and climate data analyst at Ember, renewables could do more with the right policy.
“After the end of the feed-in tariff, the free market and the auctions will be the main routes towards new renewable deployments in Turkey. However, the capacities reserved for wind and solar power need to be scaled up dramatically and the market interventions damaging the investment appetite in the country should be avoided. The energy crisis needs quick solutions, like solar power, which can be deployed very fast,” he said.