Thanks to the policies it has implemented and the projects it has carried out over the past 23 years, Türkiye is now prepared to towards crises

Minister Bayraktar addressed current issues by answering questions from Bülent Kaya and Pelin Yantur during a joint broadcast on Bloomberg HT and Habertürk. Minister Bayraktar summarized his remarks as follows:

THE CRISIS IN THE STRAIT OF HURMUZ: It has very significant impacts on the global economy, and if this crisis continues in this manner in the coming period, the effects will be even greater. Even if we were to say, “This crisis has ended today; a peace agreement has been reached,” it will still take some time for the markets to normalize. The prolongation of the crisis seems likely to extend this recovery process as well. In a very short time, the world has experienced many crises simultaneously, but this crisis is a much larger one—a crisis whose impact could be on a global scale. I hope it will come to an end as soon as possible with a peace agreement. Currently, there is a shortage of 11 million barrels of oil per day worldwide, which is a very serious figure. 

NO SUPPLY SECURITY ISSUES: As of today, we do not foresee any supply security issues regarding oil, petroleum products, natural gas, or electricity. Through the policies it has implemented and the projects it has undertaken over the past 23 years, Türkiye has actually prepared itself for such crises. With the National Energy and Mining Policy we launched in 2016, we have set Türkiye on a different path of transformation. In particular, through the increased use of domestic resources, our initiatives in sectors like oil and natural gas—areas where we previously had limited involvement—along with our infrastructure investments, natural gas storage and FSRU investments, and investments in renewable energy, Türkiye has entered this crisis in a much better-prepared state. Thanks to the implementation of our diversification strategy and the advantages it has brought, I can confidently state this today.

ENERGY PRICES: We have not yet reflected the impact of the conflict that began on February 28 on energy markets in our prices. Our goal is for this situation not to continue until the end of the year, and consequently, for us not to have to implement any new price adjustments. Our guiding principle is to adjust residential rates once a year. We must also address the industrial sector; there, we aim for a predictable natural gas market for our industrialists. 

THE IMPACT OF TENSIONS IN THE STRAIT OF HURMUZ: If this situation continues, the impact on natural gas and electricity will be approximately 600 billion lira. That is, an additional 600 billion lira. The impact of the Escalator Mechanism on fuel prices on the Treasury by the end of the year—and I mean this in a negative sense—will be 600 billion lira. There could also be an impact of 600 billion lira on natural gas and electricity. In other words, the total impact could amount to 1.2 trillion lira.

GRADUATED RATE FOR NATURAL GAS: By looking at the five-year historical averages, we are removing consumers who use more than 75% of the average in that province from the support program. When we look at the national average, 12% of subscribers are affected by this. There are variations from province to province, but on average, this 12% group of subscribers accounts for 36% of natural gas consumption. The Turkish natural gas market has reached a very significant milestone. Over the past 23 years alone, more than 200,000 kilometers of natural gas pipelines have been laid in Türkiye. Consumption, which stood at 17 billion cubic meters in 2002-2003, reached 60 billion cubic meters last year.

EXPLORATION AND PRODUCTION: Türkiye is currently carrying out a very significant exploration program in the Black Sea. We will drill six new wells this year. Our goal is to make new discoveries and increase reserves. One of the most important developments this year is that production in the first phase of the Black Sea project—currently at 9.5 million cubic meters—will double to 20 million cubic meters. In other words, we will be able to meet the natural gas needs of 8 million households with our own gas. We are starting production in the second phase. We are continuing the reactivation work on our Osman Gazi Floating Production Platform, and, God willing, we will send it off to its operational site in the Sakarya Gas Field on August 30, Victory Day. 

OVERSEAS OPERATIONS: We are exploring new fields, both domestically and abroad. Somalia is one of them. We are planning an oil-targeted drilling operation in Somalia. In Pakistan, there is a seismic survey we had to postpone due to the war. God willing, we will resume it this year. Our explorations in various regions of Libya are also continuing.

ELECTRIFICATION: We will witness a massive wave of electrification across sectors ranging from transportation to agriculture, buildings, urban planning, and industry. We believe Türkiye can achieve even more ambitious goals in this area, and we project that by the 2030s, 6 to 8 million vehicles in Türkiye will be electric. Electricity demand will increase more than ever before, and we want to see further development in that direction. Türkiye’s dependence on imported electricity is projected to be around 35% on average by 2026. This is an area where we are much stronger compared to our dependence on natural gas and oil, which reaches 85%. Therefore, we want to expand that sector even further. 

NEW TARGET IN RENEWABLE ENERGY: Our President announced to the world at COP in Baku in 2024; as Türkiye, we said, “We will reach 120,000 megawatts in solar and wind power.” At that time, we were at 30,000 megawatts; as of today, we have reached 41-42,000 megawatts. Our goal is to announce Türkiye’s new renewable energy target—insha’Allah—either in the program where we unveil our new energy architecture, or likely before or during COP, through our President. This will be a more ambitious target. I believe that with storage investments, YEKA projects, and other initiatives, Türkiye has the capability and potential to build 14,000–15,000 megawatts of solar and wind power plants annually. We need to expedite the permitting process. The approach of local governments and relevant public institutions toward these projects is of critical importance. Once we achieve this, that 120,000-megawatt target will rise significantly higher.

NEW YEKA TENDERS We have previously stated that we aim to secure a capacity of at least 2,000 megawatts through YEKA tenders each year. We will continue this approach this year as well. We are targeting these competitions for both wind and solar energy. We want to complete these before COP 31. That is, we aim to finish them by September, or at the latest by October. Our colleagues are currently working on the sites. YEKA projects will continue. 

INVESTMENTS FOR SELF-CONSUMPTION: We have announced a capacity of 3,500 megawatts. We plan to allocate these, God willing, in May or June. We aim to bring them online as soon as possible. 

INTERGOVERNMENTAL AGREEMENTS: We said, “We will create new capacities and new projects through intergovernmental agreements.” We have already implemented an example of this through the agreements we signed a few months ago. Through the intergovernmental agreement we concluded with the Kingdom of Saudi Arabia, we have implemented a deal that ensures Türkiye has the cheapest electricity—a fixed-price agreement for 25 years at less than 2 Euro cents per kilowatt-hour—with an initial phase of 2,000 megawatts, and if we include the second phase, insha’Allah, a total of 5,000 megawatts. Perhaps one or two more countries may join this initiative. Of course, we prioritize these investments that are competitive, benefit our country, and attract foreign capital.