New National Energy Efficiency Plan will bring Turkey USD 30.2 billion in energy savings by 2033

28 Sep 2018

Turkey announced new National Energy Efficiency Action Plan (NEEAP) for the 2017-2023 period in January 2018. The NEEAP closely follows the policies and practices of the European Union in the area of energy efficiency. It examines Turkey’s domestic energy and natural resources to encourage Turkey to be more energy efficient and environmentally conscious. The Minister of Energy and Natural Resources stated that this plan includes USD 10.9 billion of planned investment. It will help the country reduce 14 per cent of primary energy consumption, which accounts for 23.9 million tonnes of oil equivalent by 2023 and will save around USD 30.2 billion by 2033[1].

Strategic vision on energy efficiency is important to Turkey

Turkey has become one of the fastest growing economies in the world with the highest rate of growing energy demand among OECD countries over the last 15 years[2]. According to government figures, Turkey has a strong energy import dependency since Turkey’s domestic energy production can only meet 26 per cent of its total consumption. Consequently, improving energy efficiency is important for Turkey to enhance energy security. The NEEAP will help Turkey to leapfrog on domestic energy efficiency.

Notable actions under the Action Plan and their impacts

The government has taken a holistic planning that involves actions in different sectors, including transport, buildings, industry, agriculture and other actions such as installing LED street lighting.

In the buildings sector, expanding use of renewable energy and promoting use of central and district heating/cooling systems are two major focus areas. The government will help 1.7 million households to improve dwelling energy efficiency through thermal insulation. The plan provides residents with an attractive financial mechanism to enable customers to pay the instalments with the savings. This action will save customers 40 per cent on their heating bills, bringing USD 1 billion savings by 2023 and USD 10 billion if the lifespan of thermal insulation materials is considered at 20 years.

The focus in the transport sector will be on promoting energy efficient vehicles and reducing traffic intensity in cities to shift to a more efficient transport mode. On the one hand, disincentives to limit cars in the city centres such as increased parking fees and installing automated parking alarm systems will be introduced; on the other hand, national and international financial support will be used to promote the use of vehicles sharing system, as well as public transportation.[3]

The industry sector, which accounts for the biggest share of energy consumption at 32 per cent after housing, also has the potential to save USD 10 billion by energy efficiency improvement projects and encouraging the use of combined heat and power.

Additionally, the government is planning to replace 30 per cent of the total 7.5 million streetlights with more energy efficient ones by 2023. This will save more than USD 45 million by 2023 and USD 123 million by 2033. Minister of Energy and Natural Resources noted that the market transformation of energy efficient street lighting would draw lessons from the Karapınar Renewable Energy Resource Area (YEKA) project, which involves the establishment of Turkey’s biggest solar plant. YEKA’s achievements in supporting localities, providing purchase guarantees, eliminating risks, creating domestic employment and developing alternative subsidiary industries[4] will set a good model for the street lighting project.

Implication for policy makers

Efficient generation, distribution and consumption of energy is crucial to achieving sustainable economic growth. The NEEAP sets a good example on creating crosscutting sectorial measures and market driven instruments. The combination of a regulatory framework and a national energy efficiency financing mechanism with local and international banks significantly lowers the barriers of the implementation of the action plan and thus facilitates the creation of an efficient market. We look forward to witnessing the great benefits that the new NEEAP will bring.

Please visit this link for the full text of NEEAP in English and in Turkish.

 [1] National Energy Efficiency Action Plan (NEEAP) 2017-2033, March 2018, by Ministry of Energy and Natural resources, Republic of Turkey. Retrieved from: http://www.yegm.gov.tr/document/20180102M1_2018_eng.pdf
[2] Turkey’s Energy Profile and Strategy. Retrieved from:  http://www.mfa.gov.tr/turkeys-energy-strategy.en.mfa
[3] ibid
[4] ibid