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Interview

Turkey targets nuclear and local gas to reduce energy imports

Deputy minister says country can help EU strengthen supply security

Turkey’s third off-shore drill ship Kanuni, heading to the Black Sea through the Bosporus Strait. (Anadolu Agency )

ANKARA -- Turkey needs to draw more of its energy from local sources, secure stable supplies and increase market predictability, the country's deputy energy and natural resources minister told Nikkei Asia in a recent interview.

The approach outlined by the deputy minister, Alparslan Bayraktar, comes as Turkey grew more dependent on Russian gas in 2021. This reversed a long decline during which Russia's share of Ankara's natural gas imports dropped to 33% in 2019 and 2020 from more than 60% in 2005.

Turkey had reduced its reliance on Russia through a new natural gas pipeline from Azerbaijan, imports of liquefied natural gas and investment into gas storage and renewable energy. But imports from Russia rebounded to around 40% last year as a drought hampered hydroelectricity production and spot LNG prices rose.

A 20%-25% share of imports from "one single country is more reasonable," Bayraktar said.

Nuclear power offers one way to reduce imports, and Bayraktar called this energy source essential to reach Turkey's 2053 target for achieving carbon neutrality.

Bayraktar said that plans already announced to build 12 large nuclear reactors at three sites "will not be enough if we consider the 2050-70s. We need more."

Alparslan Bayraktar, Turkey's deputy minister for energy and natural resources, attends a panel at the Antalya Diplomacy Forum in June 2021. (Anadolu Agency)

Multinationals already sense opportunity. The deputy minister revealed that the U.S. and U.K. are pitching small modular reactors to Turkey.

Marisa Lago, the U.S. Commerce Department's undersecretary for international trade, hosted the Eurasia Small Modular Reactor Forum in Ankara last week to tout American solutions. The pitch targeted not only Turkey, but also representatives from Turkmenistan, Uzbekistan and Kazakhstan who were in attendance.

Bayraktar, who took part in the event, told Nikkei that Lago and new U.S. Ambassador to Turkey Jeffry Flake visited him at the ministry earlier to discuss the potential introduction of small modular reactor (SMR) technology to Turkey.

The deputy minister said Ankara is in talks with China to build four large-scale nuclear reactors in the Thrace region of northwestern Turkey. COVID-19 restrictions have slowed negotiations, but talks continue online, he said.

Russian President Vladimir Putin, right, and Turkish counterpart Recep Tayyip Erdogan attend a ceremony in Istanbul during 2018 for the completion of the sea portion of the TurkStream gas pipeline. (Kremlin via Reuters) 

"There is some significant progress toward an intergovernmental agreement between Turkey and China," Bayraktar said.

Turkey is keeping its faith in nuclear energy despite being an earthquake-prone country. Russia is building Turkey's first nuclear power plant, and the first of four reactors at the site will come online next year, Bayraktar said. When completed, the four reactors are expected to provide 10% of Turkey's total electricity needs.

Other alternative sources of energy are on Ankara's horizon. Bayraktar talked of Turkey becoming a regional gas hub, stepping up natural gas research in the Black Sea and Eastern Mediterranean, as well as expanding capacity for renewables.

Europe's scramble to find alternatives to Russian gas enhances Turkey's allure as an energy transit hub. The country holds a geographically strategic position to connect gas-rich countries such as Azerbaijan, Turkmenistan, Israel, Iran and Iraq to Europe.

"This issue will remain [with Europe] until 2025-30," Bayraktar said, underlining that "there is no immediate solution" to finding a substitute for Russian energy.

Even if such fresh supplies via pipelines are secured in the long term, he said, they will constitute only about one-fourth of the 155 billion cu. meters of Russian natural gas supplied annually to Europe.

Turkey already receives gas and oil through pipelines from Russia, Azerbaijan, Iran and Iraq and sends some of this to Europe. Bayraktar said the Southern Gas Corridor, which carries Azerbaijani gas to Italy via Turkey, would have large excess capacity if some compressors are added to the system.

He also noted Turkey's proximity to Israel's offshore gas. With just a 550 km pipeline to the southern Turkish shores, gas can be swapped with Europe once it reaches Turkish soil, he proposed.

Turkish President Recep Tayyip Erdogan attends the inauguration ceremony of the Trans-Anatolian Natural Gas Pipeline Project, the backbone of the Southern Gas Corridor, in 2018. (Photo courtesy of the Turkish Presidency)

Turkey's energy and foreign ministers are scheduled to visit Israel in May to discuss the resumption of diplomatic engagement as well as possible cooperation on gas.

Turkey is also keen to develop its own natural gas. Recent finds in the Black Sea will enter use in 2023 and reach a plateau in the 2025-26 period, Bayraktar said. The government aims for 15 billion to 18 billion cu. meters of production annually from these fields until 2050.

But Turkey currently consumes around 60 billion cu. meters annually, which means more offshore research in the Black Sea and Eastern Mediterranean is needed, Bayraktar said.

The deputy minister also hinted that President Recep Tayyip Erdogan soon will announce a massive renewable energy investment plan including solar and wind power. Turkey ranks fifth in Europe and 12th worldwide for installed capacity of solar and wind power.

Bayraktar said his ministry is in contact with countries like Japan, the U.S. and Germany on renewable energy, hydrogen as well as battery technologies.

The reopening of economies from COVID lockdowns has increased demand for energy and raised prices. Russia's invasion of Ukraine has added fuel to the trend. This comes amid a global push against investment to boost fossil fuel production, given the need for decarbonization.

These elements add pressure on Turkey, a net energy importer, hampering its target of reaching a current-account balance to shore up the battered local currency.

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