Smart Grid Opportunities

An Expert's View about Electricity Generation and Distribution in Turkey

Posted on: 23 Sep 2012


Turkey has 21 electricity distribution regions run by 21 electricity distribution companies, including 13 private companies of Akedas, Aydem, Baskent, Camlibel, Coruh, Fırat, Kayseri, Meram, Osmangazi, SEDAS, Trakya, Uludag,Yesilirmak and 8 state-owned companies, which are under privatization process, namely Anadolu Yakasi, Aras, Bogazici, Dicle, Gediz, Goksu, Toroslar and Van Golu Electricity Distribution Companies (DISCOs). The privately-owned distribution companies serve around 52-53% of customers of Turkey which corresponds to same percentage of electricity consumed. Turkish Government obtained approximately USD 6.0 billion revenue from the privatization of 13 regional companies.

Turkey needs Smart Metering for the following reasons:

   Decreasing loss and theft ratios in distribution level

   Increasing the quality of supply and efficiency

   Solving the problems encountered in operation of day-ahead and balancing markets.

Turkey’s average loss & theft ratio is 16%. While Uludag DISCO has the lowest ratio of approximately 7%, Dicle has the highest approximately 61%. Over $5 billion investment is expected until 2015 for the smart grid systems.

Market Demand

All distribution companies have target losses (technical + non-technical). Targets are set for creating incentives to decline the level of losses. If they can reduce the loss level more than the target, distribution companies gain more profit than the regulated profit. If they can’t reduce the loss level to the targeted level, distribution companies get less profit than the regulated profit (or they lose money).

The current situation and forecast for total losses are as follows:

• 2011 overall losses: 16%

• Technical:   7 – 8%

• Non-technical:   9 – 8%

• 2015 overall target: 10%

Market Data

EMRA has approved roughly 9 billion TL (nearly 5 billion USD) investment budget for the implementation of smart grid systems for the 21 distribution companies for the second implementation period of 2011-2015. EMRA has mandated the distribution companies to complete the necessary investments for smart metering type measurement systems until the end of 2012. DISCOs should begin recording all data related to supply sustainability and technical quality starting from the beginning of 2013. However, some delays are already expected. All DISCOs are in a different stage in their investments or investment preparations such as tendering. The following network operation investments are expected to occur according to the smart grid investment program enforced to the DISCOs by EMRA:

   SCADA (supervisory control and data acquisition) systems

   GIS (Geographical information systems) investments until the end of 2012

   Investment costs are covered by budgets approved by EMRA.

However, some delays are expected to occur.

EMRA’s general approach to the smart grid system investments is as follows:

   It is an innovative sector, hence no need to restrict and direct the market development with strict regulations.

   Set the minimum criteria and allow the distribution companies to make necessary adjustments for their own systems.

   Use the incentive based regulation to produce optimal solutions.

When we look at the Turkish Electric Power sector in general:

Turkey has an installed power generation capacity of approximately 53,000 MW, which generated approximately 220 billion kWh of electricity in 2011. Approximately 33% of the installed capacity is hydroelectric, 31% NG-fired, 22% coal-fired, 10.6% other fuel-fired power plants, 3.1% wind power and the rest is geothermal and other renewable energy power plants.

Read the full market research report

Posted: 23 September 2012

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