What are the prospects for coal in Turkey?

Turkey has one of the world’s fastest growing economies. This, combined with a growing population and increasing industrialisation have triggered a dramatic increase in energy demand. In the last decade, the rate of increase in demand for natural gas and electricity has been second only to China.

The country faces a number of energy supply issues – particularly security of supply and achieving sustainable development. Currently, >90% of Turkey’s oil and 98% of its natural gas is imported, mainly from Iran and Russia. Much of the hard coal consumed is also imported. A significant proportion of the recent increase in electricity demand has been met by new natural gas-fired power plants, which rely mainly on imported gas. Imported energy accounts for around a quarter of the country’s overall annual import bill.

Turkish energy markets have been undergoing tremendous changes during the last decade. This has included liberalisation, opening up to private participation, and restructuring to establish a competitive market. A major government objective is to reduce the country’s high energy import dependency. Increasingly, state-owned power generation assets and coalfields are being sold to the private sector.

Turkey’s energy resources are mainly lignite and smaller amounts of hard coal. Lignite deposits are spread across much of the country. Current estimates suggest that resources exceed 13 Gt (11.8 Gt of lignite and 1.3 Gt of hard coal). But large areas of the country have not yet been explored fully. This means that lignite and hard coal reserves could be much greater than the current estimates. On-going exploration has so far added 5.8 Gt to Turkey’s lignite reserves.

The greatest concentration of lignite mines is in the northwest region around the towns of Soma, Seyitömer and Çan. Nearly 90% of lignite reserves are owned and/or operated by public sector organisations (TKI, EÜAÅž and MTA). Two of these are lignite producers; in 2011, TKI produced 33.4 Mt, and EÜAÅž, 31.6 Mt. In a typical year, the private sector produces ~7 Mt. Even though often of poor quality, it remains the country’s most important energy resource. Lignite-fired power plants have a strong competitive advantage in terms of price, supply, investment and operating costs.

Dr Mills commented: “the greater use of lignite and hard coal has the potential to be of significant economic benefit to the country. The deployment of Clean Coal Technologies (CCTs) would also ensure that any environmental impacts are contained.”

Hard coal deposits and commercial production is limited to the Zonguldak basin in the north-west of the country. Coal resources in the basin are estimated to amount to 1.316 Gt, of which 530 Mt is considered proven. Turkish Hardcoal Enterprises (TTK) is the main producer. Total annual production is ~3 Mt/y. This meets only 10% of the annual demand and there is a target to increase output to 12 Mt/y by 2023. The current deficit is met by imports of around 30 Mt/y. In the near-term, imports are expected to increase by 2-2.5 Mt/y as new thermal power plants come on line and iron and steel production expands.

A national coal strategy has been adopted to reduce imports and increase the use of indigenous lignite and hard coal for power generation, with an emphasis on the adoption of CCTs. 2012 was designated ‘domestic coal year’. A significant number of coal-based power projects have been proposed or are under development or construction.

In order to meet the increasing electricity demand, large investments will be required. Additional generating capacity will be needed – there is a goal of achieving an extra 18 GW of coal-based installed capacity within the next decade.

Thermal and hydroelectric generation currently provides most of Turkey’s electricity. In 2012, gas-fired plants generated 43.6%, followed by hydro (24.2%). Domestic lignite and hard coal provided 16.2%, with imported hard coal providing a further 12.2%. However, there are plans to add nuclear power to the mix.

By 2023, a government goal is for ~30% of the country’s electricity to be produced from lignite/hard coal, 30% from gas, 30% from hydro and other renewables, and 10% from nuclear. There is an ambitious target for the country to have between 112 and 125 GW of installed generating capacity by 2023.

The commercial-scale deployment of clean coal technologies in Turkey encompasses mainly fluidised bed boilers, supercritical pulverised coal boilers, various environmental control technologies (such as FGD and SCR units), and a number of coal cleaning systems. However, as the national focus shifts towards the greater use of indigenous lignite and hard coal, interest in the wider use of CCTs is increasing. This has now reached ministerial level and their increased deployment is being encouraged by various means.

The report Prospects for coal and clean coal technologies in Turkey, CCC/239, by Dr Stephen Mills 109 pp, July 2014, is available for download from the IEA Clean Coal Centre Bookshop