Cheap oil will not help Turkey’s electricity prices: Energy expert

Cheap oil will not help Turkey’s electricity prices: Energy expert

Cheap oil will not help Turkey’s electricity prices: Energy expert

Electricity production decreased by 16 percent to 19.1 billion kilowatt-hours. Out of the total production, 47.6 percent was generated by hydro plants.

A price hike in household electricity consumption is expected in the upcoming months despite historically low oil prices because of currency fluctuation and the structural design of the Turkish electricity market, according to an expert.

“The share of electricity generation plants using fossil fuels in the total production has dropped dramatically … On top of that, the cost effect of dollar-dominated purchase guarantees given to the renewable energy plants increased significantly on par with the exchange rate increases,” energy expert and price comparison website founder Çağada Kırım told Hürriyet Daily News.

Under a scheme introduced in 2011, the Turkish renewable energy plants such as wind, hydropower, geothermal, biomass and solar are provided feed-in tariffs. The support for wind and hydropower plants is fixed at $0.073 per kilowatt-hour (kWh), geothermal facilities at $0.105 kWh, and solar and biomass plants at $0.133 kWh.

In January, a total of 817 facilities, with an installed capacity of 21,049 megawatts, received financial backing through the Renewable Energy Support Scheme (YEKDEM).

While, Turkey’s electricity consumption decreased by 15.3 percent in April compared to the same month of 2019, the capacity utilization rate of natural gas plants shrank to 7 percent - 10 percent lower than the levels in the same period last year.

Calls for deferment

As the lira’s value decreased against dollar and the demand decreased, Energy Market Regulatory Authority (EPDK) updated its YEKDEM cost per unit estimate of 121 liras to 228 liras in April.

Some gas plant operators have called on the government to defer YEKDEM payments for several months.

“With the current YEKDEM scheme and the lira/exchange rate trending upside, electricity costs will go up as the renewable energy generation increases, and consumer electricity prices will be affected,” Kırım said.