BMI's Executive Summary

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The new Turkey Power Report from BMI forecasts that the country will account for 9.05% of CEE regional power generation by 2011, and to remain a net exporter of electricity to neighbouring states. BMI's CEE power generation estimate for 2006 is 1,995 terawatt hours (twh), representing an increase of 3.39% over the previous year. We are forecasting an increase in regional generation to 2,398twh by 2011, representing a rise of 19.4%.

CEE thermal power generation in 2006 is estimated by BMI at 1,230twh, accounting for 61.6% of the total electricity supplied in the region. Our forecast for 2011 is 1,440twh, implying 17.1% growth that reduces the market share of thermal generation to 60% – in spite of environmental concerns that should be promoting renewables, hydro–electricity and nuclear generation. Turkey's thermal generation in 2006 is estimated at 119.1twh, or 9.68% of the regional total. By 2011, the country is expected to account for 9.51% of thermal generation.

For Turkey, oil is the dominant fuel, accounting for 33.4% of primary energy demand (PED), followed by coal at 29.1%, gas at 27.4%, with hydro having a 10% share of PED. Regional energy demand is forecast to reach 1,676mn toe by 2011, representing 18.1% growth over the period. Turkey's estimated 2006 market share of 6.64% is set to fall to 7.17% by 2011. Turkey plans long–term nuclear power construction, but currently makes no contribution to regional nuclear consumption.

Turkey's overall business environment can be considered unattractive attractive in a regional context, with high long–term economic risk, moderate long–term political risk and a high degree of energy import–dependence. It benefits from above–average forecast growth in power consumption and generating capacity, as well as some progress towards deregulation and privatisation. In the BMI Business Environment Ranking matrix, Turkey receives a composite score of 23, which ranks the country seventh out of nine states included in the CEE region.

Turkey's GDP, estimated at 4.2% in 2006, is forecast to rise sharply to over 7% in 2008 and 2009, before declining back to just over 4% at the end of our forecast period.