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The Sixth of ÇEVKO Foundation Talks Held
31 Aug 2022The Role of Energy Transition in Combating Climate Change
The climate crisis is being thoroughly examined from all angles in the ÇEVKO Foundation Talks organized in cooperation with the ÇEVKO Foundation and the Association of Economy Journalists (EGD). Moderated by EGD High Advisory Board Member Ahmet Coşkunaydın, and with the participation of ÇEVKO Foundation Secretary General Mete İmer, SHURA Energy Transition Center (SHURA) was the guest of the sixth session focusing on sustainability practices in different sectors.
The ÇEVKO Foundation is among the leading institutions in our country that assume thought leadership on the issues of “combating the climate crisis” and “transition to a circular economy.” In the ÇEVKO Foundation Talks, organized since 2021 by the ÇEVKO Foundation Climate Change and Sustainability Working Group in cooperation with the EGD Global Warming Council Committee, the climate crisis is addressed from all aspects and exemplary practices in sustainability are discussed.
The sixth of the talks jointly organized in 2022 by the ÇEVKO Foundation Climate Change and Sustainability (İDS) Group and the Association of Economy Journalists (EGD) was held under the title “The Role of Energy Transition in Combating Climate Change.” The guest speakers of the online session, moderated by EGD High Advisory Board Member Ahmet Coşkunaydın and attended by ÇEVKO Foundation Secretary General Mete İmer, were Alkım Bağ Güllü, Director of SHURA Energy Transition Center, and Yael Taranto, Senior Energy Analyst at SHURA Energy Transition Center.
At the online meeting, the concept of energy transition, the net-zero carbon target, the current situation in the world and in Turkey, results from SHURA’s studies for Turkey, the SHURA energy transition scenario, investment and financing needs, the financing climate in the world and in Turkey, policy/action areas for financing energy transition for Turkey, and financing solutions were discussed.
Emphasizing the importance of the talks at the opening of the meeting, EGD High Advisory Board Member Ahmet Coşkunaydın first gave the floor to ÇEVKO Foundation Secretary General Mete İmer.
ÇEVKO Foundation Secretary General Mete İmer thanked all participants and underlined the importance of Climate Change and Sustainability efforts; he drew attention to greenhouse gas emissions resulting from energy production: “For two years, together with the Association of Economy Journalists (EGD), we have organized workshops in which we emphasized the causes of climate change and the importance of sustainability. Today, we are addressing the issue of energy transition. Climate change is a reality that we are all aware of and that is being discussed on all platforms at home and abroad. The Paris Climate Agreement was signed in 2015, and our Grand National Assembly ratified this agreement at the end of 2021. About a year has passed; time moves quickly, and climate change continues at the same rapid, relentless, and ruthless pace. As individuals and institutions, we are racing against time.”
Mete İmer continued: “In 2021, Turkey set its target to be carbon neutral by 2053. There are important steps to be taken to achieve this goal. I have identified eight steps that we consider important from our perspective. I would like to list them briefly. First: Turkey’s commitment regarding the reduction of greenhouse gas emissions; updating Turkey’s nationally determined contribution submitted to the UN to make it more ambitious and aligned with the 2053 target. Second: Enacting and implementing a climate law and the necessary legal regulations; there has been significant progress on this issue. Third: Setting a limit and a price on carbon emissions through an Emissions Trading System and/or taxation to cap greenhouse gas emissions. Fourth: Planning and implementing the phase-out of coal use in energy production; in parallel, planning to increase forests and other carbon sinks. Fifth: Increasing energy efficiency in buildings, industry, and transport, and making investments in and the use of renewable energy more ambitious. Sixth: In addition to emissions from the energy sector and industry, reducing emissions from transport, buildings, agriculture, and waste. Seventh: Creating very substantial financial resources—including incentives—to realize all these; securing these resources from public, private, national, and international funds. Eighth and finally: Raising public awareness about the climate crisis, launching and sustaining a national campaign to change habits. These are indeed challenging goals and efforts. Economically, both the world and our country are going through a difficult period. It is not easy to prioritize all of these, but we must do so for our future and for the next generations. As you may notice, many of the items I listed are related to energy because the biggest factor causing greenhouse gas emissions is actually energy production and energy consumption. It has been scientifically proven that greenhouse gas emissions resulting from the use of fossil fuels for energy cause climate change. We must take our measures in line with scientific data. All the participants in this meeting are aware of this, and I would like to sincerely thank the participants from SHURA – Energy Transition Center, who will enlighten us a bit more in detail on energy with their presentations.”
SHURA – Energy Transition Center Director Alkım Bağ Güllü: “The energy sector is responsible for 70% of Turkey’s carbon emissions”
Established in 2017, SHURA Energy Transition Center (SHURA) aims to contribute to the decarbonization of the energy sector as an innovative energy transition platform, while meeting the need for a sustainable and widely accepted common ground where studies on the political, technological, and economic aspects of the energy sector in Turkey are discussed.
At the meeting, SHURA Director Alkım Bağ Güllü made a presentation titled “The Role of Energy Transition in Combating Climate Change” and shared information about SHURA’s work. Stating that the energy sector is responsible for 70% of Turkey’s carbon emissions, Alkım Bağ Güllü said, “There are three fundamental problems in energy. The first is ensuring energy supply security. The second is affordable access to energy. The third is sustainability. These problems are often considered independently of each other, which is very wrong. There is a single answer for all three, and that is the energy transition. There are also three fundamental elements in the energy transition. The first is to maximize the share of renewable energy and minimize the share of fossil fuels. The second is energy efficiency and, along with energy efficiency, reducing demand. The third is reducing the share of fossil fuels by electrifying energy-intensive sectors and meeting additional energy demand from renewable energy. In this way, it is possible to ensure energy supply security, protect against fossil-fuel-driven price fluctuations, and reduce the adverse effects of climate change. The energy transition also means a structural transformation and represents a shift from a conventional, centralized, one-way, fossil-fuel-heavy system to a renewable-heavy, distributed, interactive, digital system in which the consumer is at the forefront.
“An increasing number of countries are announcing net-zero targets, and Turkey has announced a net-zero target for 2053. Fossil fuels make up 83% of Turkey’s energy mix. The share of renewable energy in primary energy supply is 16%. On the other hand, as of the end of 2021, renewable energy sources account for more than half of installed capacity and 36% of electricity generation. The combined share of solar and wind exceeds 13%. While imported fossil fuels constitute 78% of primary energy supply in Turkey, the transformation in the energy sector continues. In terms of emissions, Turkey’s emissions have increased by 134% over the last 20 years, and this increase has largely been due to the continuous rise in energy-related emissions. The electricity sector’s share in total CO2 emissions from Turkey’s energy sector is 40%. Therefore, it is critically important for the electricity sector to lead the energy transition by decarbonizing ahead of other sectors.
“Providing information on SHURA’s 2030 Electricity System Vision formed by results of studies on renewable energy, energy efficiency, and electrification, Alkım Bağ Güllü stated that if planned investments are realized and flexibility options are leveraged, 60–70% of Turkey’s electricity generation could be supplied from renewable energy sources by 2030. It is possible to increase the share of wind and solar to 30–35%. With the implementation of various energy efficiency solutions, a 10% improvement compared to the baseline scenario can be achieved in energy efficiency. By 2030, it is possible to increase the use of renewable energy through electrification in end-user sectors with 2.5 million electric vehicles and 1 million heat pumps in buildings. A roadmap must also be determined for Turkey’s net-zero target by 2050, and SHURA continues its work on this roadmap. In SHURA’s studies, solar and wind energy emerge as the most economical energy sources. To achieve this transformation by 2030, a total investment of 54 billion dollars over ten years is required. Every 1 dollar spent on electricity savings provides 1.2 to 1.5 dollars of benefit. Besides this, the transition also delivers environmental, social, and economic benefits. Another SHURA study evaluates Turkey’s green hydrogen production and export potential from a technical and economic perspective. Green hydrogen is one of the new technologies envisaged for use in areas where decarbonization through electrification of end-user sectors is not possible, and it is of great importance for both the world and Turkey. Turkey’s green hydrogen production potential is at the level of 3.4 million tons per year, and total domestic demand for green hydrogen will be 1 to 2 million tons by 2050. Green hydrogen exports could take place at the level of 1.5–1.9 million tons per year and could provide a gross benefit of 6 to 8 billion dollars annually to the Turkish economy.”
Providing information about the SHURA Electricity Sector Net-Zero Roadmap, which is still in draft form, Alkım Bağ Güllü stated that a very serious transformation is underway on the way to the net-zero target, that the earlier and faster countries act, the more advantageous they will be, and that substantial financing will be needed for this.
Yael Taranto, Senior Energy Analyst at SHURA – Energy Transition Center, delivered a presentation on “Financing the Energy Transition in Turkey in the Context of the Green Deal.” In line with the net-zero carbon target, the Green Deal, which includes the energy transition and digital transformation, will, together with an unprecedented investment drive, increase the need for financing, its sources, and its diversity. By establishing a Green Financing strategy, Turkey can access the resources it needs by shifting towards low-carbon and high value-added production along with the energy transition. Globally, the annual investment amount needed to reach the net-zero carbon target will have to reach 2–3 times the average of past energy investments. With good coordination, it is possible to secure the necessary resources for this. The funds totaling 87 trillion dollars controlled by institutional investors indicate significant potential resources that could be allocated to the energy transition.
Regarding the development of energy transition and its financing in Turkey, Yael Taranto stated that in 2022, increases in international energy and commodity prices, structural problems, and sanctions arising from the Russia-Ukraine War increased inflation and exchange rate pressures. She emphasized that Turkey’s structural transformation needs and the Green Deal paradigm strongly overlap, and that the loans provided by International Development Finance and ECA institutions between 2002–2021 played a leading role in financing the energy transition. In energy sector loans, the total amount is 48.4 billion dollars. In SHURA’s 2030 transition scenario, the average annual investment need for the energy transition is at twice the level of past annual energy investments. Turkey’s total need for non-equity financing for energy transition investments until 2030 is 107 billion dollars. The financing need for the 2021–2030 energy transition is at the level of 0.5% of the global resources that could be created in the same period. With appropriate planning and policies, access to finance is possible. Policy and action areas and financing mechanisms recommended to be integrated into national plans are proposed within the scope of the studies. In financing the transition, a long-term energy transition strategy, national taxonomy work, increased access to finance, diversification of resources, and the public sector taking a leading role for new technologies are important. The establishment of a “climate bank” is recommended for strategy development, coordination, and resource mobilization. The private sector, financial institutions, and NGOs are expected to play an active role in the fields of renewable energy, energy management, and energy efficiency. The main financing instruments recommended include theme-based medium- to long-term loans, green bonds, and integrated energy management financing packages.
The recording of the online talk can be watched on the ÇEVKO Foundation’s YouTube channel: https://youtu.be/PaYnhSDkJfQ
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