Sustainable Economics and Finance Research Association (SEFiA) and E3G reveal the cost of Turkey's transition from coal by examining the power plant in their new report titled "Financing the Exit of Coal: The Example of Turkey". The report examines in depth the financing issue, which is seen as one of the biggest obstacles to abandoning coal in the electricity sector, and examines potential financing mechanisms for the gradual transition from coal to renewable energy.
HIGHLIGHTED FINDINGS IN THE REPORT ARE AS FOLLOWS:
- In the report, one-third of the current carbon price of the EU ETS is taken as a basis for electricity production until 2035, and a gradual carbon price is envisaged to be applied after 2035, increasing up to half of the EU ETS carbon price. In this case, it is concluded that none of the coal-fired thermal power plants, except two out of 30, will be able to maintain their profitability.
- If the power plants operate under these conditions, the size of the damage reaches 40 billion dollars in the 13,5-year scenario and 44,5 billion dollars if they operate until the end of their license. It is anticipated that these power plants will become idle assets as operators are not expected to continue a loss-making operation.
- It is seen that the average annual health cost of the power plants will be around 10 billion dollars during the period they will remain in operation until the end of their license period.
- First, imported coal-fired power plants are decommissioned
Meanwhile, according to the coal phase-out scenario included in the report, in the period between 2021 and 2035, the share of domestic resources in electricity production increases from 51,3 percent to 73,6 percent and consists entirely of domestic and renewable resources, while in the normal scenario, domestic resources (renewable resources) and domestic coal) share can only reach 2035 percent in 59,2.
Bengisu Özenç, Director of the Sustainable Economics and Finance Research Association (SEFIA), emphasized the possible negative economic and social consequences of delaying the phase-out plans from coal, which are technically possible for Turkey and inevitable in line with global developments.
SEFIA Financial Research Director İbrahim Çiftçi drew attention to the coal exit mechanisms that Turkey can benefit from, and stated that coal exit is the most suitable area where decarbonization can begin in line with the net zero target, and said, "Today, in the international arena, Coal Retirement Mechanisms (Coal Retirement Mechanisms) that Turkey can also benefit from, are used to exit coal. There are many initiatives such as Mechanisms – CRM) or Coal Transition Mechanisms (CTM). Instead of planning a new coal-fired thermal power plant, Turkey should act as soon as possible to protect the security of supply in energy, to ensure the continuity of the electricity sector, which is a sector with high debt rates, and to prevent a crisis in this sector from threatening its economy by affecting the banking sector and the secondary sectors that provide input. "It should plan the transition it has committed to with the net zero target," he said.
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