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Maguire: The hydro-boom in Turkey helps to extend Europe's gas shortage.

Turkey's energy producers have gained an unexpected advantage: water.

The surge in hydroelectric production has allowed utilities in the power sector to reduce natural gas use by over 75% from January to May. This is a significant reduction in emissions and eases the country's dependency on imported fuel.

The change has been dramatic. According to data from the?think-tank Ember, between January and May, hydro production jumped by nearly 60% compared to a year ago, while gas-fired generators dropped more than 40%.

The surge in hydro generation, along with record solar and wind production, enabled clean energy to account for over 60% of Turkey's electric mix for the first time. This marks a significant energy transition milestone for a fast-growing economy.

The consequences of the coup extend beyond Turkey's borders.

According to the Energy Institute's report, Turkey is Europe's fourth largest gas consumer. This pullback in demand reinforces a regional trend that sees a decline in gas consumption and reliance on renewable energy.

Turkey's lower use of gas has allowed it to inject more into storage facilities rather than burning it in power stations, helping to limit Europe’s overall gas inventory drawdown in 2026.

HYDRO TAKING CENTER STAGE

This year, the Turkish power system has been dominated by a resurgence in hydropower.

Hydro generation reached 46.33 Terawatt Hours (TWh) between January and May, which is the highest ever recorded for this period. This compares to 29.03 TWh in the same period of 2025.

This increase was almost as much as Turkey's total electricity generated by gas from January to May (17.48TWh). It shows the impact of the surge in hydroelectricity on the Turkish power system.

In the first five months of this year, hydro output outstripped both coal and natural gas generation. Water is now the largest power source in Turkey.

Hydro's share in total electricity supplied by utilities grew to 33.2%, up from 20.8% one year ago. This is the highest level since January-May of?2020.

The dam operators were able to maximize production due to favorable weather conditions and high reservoir levels, even as the electricity demand continued to rise.

The total electricity generated in Turkey from January to May was 142.44 TWh, compared to 140.88 TWh one year ago. This means that Turkey produced more power while simultaneously reducing fossil fuel use.

GAS SETBACK

Natural gas has been the principal victim of the hydro boom.

The gas-fired generation dropped to 17.48 TWh from 29.42 a year ago, a 40.6% drop. Gas's share in total generation fell from 20,7% to 11,9%, a record low.

According to Ember data, in absolute terms, the gas generation has fallen by nearly?12TWh compared to the previous year. This is the biggest year-to date decline for at least seven consecutive years.

The fall was most pronounced in the spring when hydro production increased.

The average gas-fired generation was about 2 TWh per month between March and May, compared to more than 4TWh for several months during the same period in last year.

The coal generators are also being squeezed.

The coal-fired production fell 16.1% on an annual basis to 38.14 TWh. This is the lowest output in over a decade.

CLEAN POWER MILESTONE

Hydro is not acting alone.

Turkey's wind power generation grew to 17.97 TWh in January-May from 14.95.

Hydro, wind, and solar combined to produce 86.25 GWh of clean electricity, up from 65.52 GWh one year ago. Clean sources provided 61.2% all electricity in comparison to 46.8% for the same period in 2025.

The fossil-fuel production fell more than 25% to 56.19TWh, down from 75.36TWh.

The impact on the environment of the drastic cuts in fossil fuel generation is substantial. The power sector's emissions from fossil fuels have fallen by more than 21% to 47.91 metric tons CO2 equivalent, down from 61.01 metric tons the year before.

Storage BOost

The lower gas consumption has created another benefit: the fuel is now more readily available.

Turkey is able to store additional gas underground instead of using large amounts of imported gas for power plants.

According to LSEG, storage injections have reportedly been 18% higher than the previous year. This is a significant development, especially at a moment when Europe is working hard to replenish its inventories following a strong withdrawal season.

By storing gas in Turkey, Turkey reduced the pressure on the European gas system as a whole and helped to limit the inventory drawsdowns throughout the region.

This could be as significant as the decline of power-sector gas use.

Turkey is a transit and consumption market, so any changes in the gas balance will have a greater impact on regional supply dynamics.

BROADER TREND

The experience of the Turkish people is also part of a larger story that's unfolding in Europe.

Renewables continue to reduce the role of gas in electricity generation across the region whenever weather conditions are favorable.

European policymakers spent years trying reduce exposure to volatile imported gases through increased renewable deployment, efficiency improvements and electrification.

The gas consumption in Europe is still well below the pre-crisis level despite periodic increases tied to weather conditions and electricity demand.

The transformation of Turkey's?power sector to hydro-driven is one of the most obvious examples of this trend by?2026.

Turkey's gas demand has decreased despite an increase in total electricity production.

This suggests switching fuels rather than demanding destruction.

This is perhaps the most encouraging sign for a continent that still tries to reduce its dependence on imported gas.

These are the opinions of the columnist, who is also an author. This column is great! Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn, X and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets 7 days a weeks.

(source: Reuters)