Decreasing Turkey's Gas Bill: “It's a Family Affair”

Hours after Turkey shot down a Russian plan that allegedly violated Turkish airspace, Turkey's President, President Recep Tayyip Erdogan, approved a new cabinet that includes his son-in-law, Berat Albayrak, who was appointed Energy and Natural Resources Minister.

Aaron Stein, Nonresident Senior Fellow at the Atlantic Council's Rafik Hariri Center for the Middle East, recalls that the 37-year old businessman, Mr. Albayrak, has been focusing on the Eastern Mediterranean and on the price Turkey pays for natural gas, both from Iran and from Russia, in his capacity as CEO of Çalık Holding.

Of Mr. Albayrak, Aaron Stein offers, “I think you have a new Turkish Energy Minister who is very close to Erdogan, speaks for Erdogan, coming into the cabinet, who may take a very hard line on Turkey's push to decrease the cost of the country's gas import bill, from Iran and Russia.”

A similar sentiment was expressed by Mr. Albayrak's predecessor. In his appearance at the Atlantic Council Energy & Economics Summit, Turkey's outgoing Minister of Energy and Natural Resources, Ali Riza Alaboyun, unveiled the country's plans to reduce significantly his country's share of natural gas used for power generation. He also said that Turkey is planning to invest $125 billion into the energy sector by 2023.

Turkey, said Minister Alaboyun, will have doubled its power generation capacity by 2023, the centennial of the Turkish Republic, to 130,000 megawatts.

He offered, “We are planning to diversify our energy mix and are determined to reduce our dependency on natural gas for electricity generation. Although the share of natural gas in our installed capacity will stay 29%, its share in electricity generation is almost 50% - a clear indication of our dependence upon natural gas to generate electricity.”

Renewable energy, presently comprising 4,200 megawatts, should total 20,000 megawatts by 2023, according to him. “Utilizing all the potential of renewable energy is at the top of our agenda,” he stated.

Additionally, Mr. Alaboyun said Turkey is also constructing two new nuclear plants, and planning a third one, to reduce the proportion of natural gas in the country's energy mix.

He said, “In order to provide sustainable energy to our people, we have to install base load power plants like nuclear, coal-fired power plant using clean coal technologies.

Energy demand in Turkey, increases 7%/annum, he reported.

Noting that climate change and clean energy technology would also be focal points at the Atlantic Council Energy and Economics Summit, he offered, “Energy security is a multi-dimensional topic and, in this respect, the need for energy increases the inter-dependency among countries. From this respect, I believe that sharing mutual resources will provide mutual prosperity for both supplier and consumer.”

Energy issues, explained Mr. Alaboyun, should be leveraged from promoting peace and open dialogue.

Of Turkey's energy outlook, he admitted that Turkey does not have its own energy resources, such as natural gas or oil. “But 70% of the energy resources are located in the east of Turkey; 60% of consumers are located in the west of Turkey. Those figures provide a geostrategic location of Turkey between supplier and consumer,” he explained.

The Trans-Anatolian Pipeline Project (TANAP), he said, a fundamental part of the Southern Gas Corridor, is an example of Turkey's geostrategic location. “In addition to that, gas potential in Iraq, Iran and the Eastern Mediterranean may be new future opportunities for buyers finding the energy resources for Turkey and Europe.”