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Maguire: Turkey's clean energy growth is bad for the gas market bulls

Turkey is among the fastest-growing markets for power in the world. Natural gas and LNG exporters have targeted the country as an important potential growth market. They may be disappointed by the rapid expansion of Turkey's clean energy supplies.

Solar capacity has increased dramatically in Turkey, and last month solar electricity production surpassed gas-fired electricity for the first time. The country's very first nuclear plant will be starting up production within the next few months.

Turkey has also deployed utility-scale battery systems to store excess power from wind farms and solar farms, which can be dispatched at times of peak demand. It aims to achieve 80 gigawatts hours (GWh), or storage capacity for batteries by 2030.

The combination of increasing clean energy supplies and expanding storage capacity is likely to limit Turkey's usage of gas and fossil fuels for power production. Gas market bulls may need to look elsewhere to find growth potential.

GROWTH PATH

The World Bank's data shows that the Turkish economy has grown by 4.7% per year on average since 2019. This is four times faster than the Eurozone and almost twice as fast as the global economy during the same period.

Data from Ember show that the country's demand for electricity grew by 14% between 2019 and 2024. This is in stark contrast with the roughly 5% decline in demand in the European Union during the same period.

According to Ember, the Turkish electricity demand is primarily driven by government spending on infrastructure, heavy industry, and manufacturing. The total will reach 340 Terawatt Hours (TWh), in 2024.

Re-shoring certain heavy industries, such as steel and cement production in Germany, has also contributed to the increase of energy consumption in Turkey over the past few years.

GAS CUTS

Gas-fired power generation in Turkey has been declining for the last three years despite this steady increase in power usage.

According to Ember, coal-fired power plants are the largest source of electricity in Turkey. They accounted for 36 percent of the country's electricity supply last year.

The key to the coal industry's survival has been cheap shipments coming from Russia. Since 2022, when it was sanctioned for its invasion of Ukraine, Russia has had difficulty finding willing buyers.

In order to ensure that Turkey's electricity suppliers continue to purchase coal, Russian coal exporters discounted their prices in comparison with other coal vendors. As a result, they have gained a majority share of Turkey’s coal purchases starting 2022.

Data from commodity intelligence firm Kpler show that Russia has provided roughly 88% (or more) of Turkey's imports of coal so far in 2025. This compares to a share of approximately 24% between 2018 and 2021.

The steady supply of coal has led to a reduced demand in Turkey for natural gas, which is more expensive. Gas-fired power plants supplied only 19% the electricity in Turkey last year.

Solar farms (7%) followed by wind farms (11%) as the next biggest electricity sources in Turkey.

On the Rebound?

The Turkish gas-fired electricity generation has risen by 52% in the first half 2025 compared to the opening half 2024. This has given gas market bulls reason for optimism.

The recent gas-fired electricity generation peaks are still below the previous production spikes. This suggests that Turkey's energy firms are hesitant to rely too heavily on gas.

Solar power continues to grow, with the output of solar and wind farms reaching a record 30 percent share in electricity last month.

The first of four reactors planned for Turkey's first Nuclear Power Plant is expected to begin production in the next few months.

Once the Akkuyu power plant is operational, it will supply utilities with clean energy that can be used on demand instead of coal or gas power to balance system needs.

Global Energy Monitor (GEM) reports that nearly 90% of 13,000 megawatts of new capacity is coming from clean sources.

Nuclear plants are the single largest source of new capacity being developed in the near future, with 4,800 MW.

GEM data indicates that solar farms, with 1,336MW, and wind farms, with 2,460 MW, represent the second largest share of capacity.

Clean energy sources will make up more than half the total capacity of Turkey's electricity firm once completed, with only 890 MW new gas and 700 MW new coal capacity.

This leaves very little room for natural gas to make a sustained contribution to the Turkish energy mix even if Turkey's growth in power demand continues to exceed that of regional and international peers.

These are the opinions of the columnist, an author for.

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(source: Reuters)