Turkish Government to Incentivize Coal Usage for Power Generation

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Turkish government plans to subsidize the use of coal for power generation to take advantage of Turkey's coal reserves and reduce the use of imported natural gas for electricity generation. Energy Minister Taner Yildiz announced that the new measures will be implemented to help lower the country's large energy imports.

Yildiz noted that 50% of Turkey's electricity is provided by natural gas. "We plan to reduce this figure to 30% by 2023," said Yildiz, who also announced that those who use coal to produce electricity will be given special incentives. There will be limits imposed on future projects that use natural gas to produce electricity, the minister added.

Efficient coal basins will be allocated to coal-fired power producers without charge. The Turkish government will begin providing subsidies (which will be negotiated) for the coal used by the power producer once power is produced.

The Turkish coal sector produces both hard coal (2.8 million tons in 2011) and lignite (69.0 million tons), mainly used for power generation. Turkey's proven reserves of lignite are 11.7 billion tons. In total, Turkish coal-fired plants have a generating capacity of approximately 10.6 gigawatts (GW) per year. In 2011, Turkey's installed capacity of electricity production rose 64.8% to 52.46 GW. According to Energy Ministry data, Turkey produced 211.2 billion kilowatt-hours of electricity in 2012.

Coal prices in Europe have fallen 7.5% this year as nations increase the amount of energy they obtain from alternative sources. Coal for next-month delivery to Europe's Antwerp-Rotterdam-Amsterdam hub declined to $101 a ton this week, the lowest since October 2010, according to data from coal research firm the McCloskey Group (Petersfield, England).

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