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Abstract

The energy transition is inducing new investments in the electricity production and infrastructure sectors worldwide. Turkey, with its increasing energy demand met mostly by fossil fuel resources, faces significant risk of a higher dependency degree on energy imports in the future. In order to address this issue, Turkey’s public policy framework includes not only strategies to increase the share of renewable energy resources in its energy mix but also aims to develop a local manufacturing industry and to enable technology transfer. This study examines the co-benefits to industrial development and trade of increased deployment of renewable energy in Turkey. The research is carried out in the context of the COBENEFITS project, which assesses a range of additional co-benefits of renewable energy in developing countries, besides reducing energy sector greenhouse gas (GHG) emissions, when compared to conventional energy systems. The study also provides initial insights on the regional trade opportunities available to Turkey, should technological gaps in the solar and wind sectors be narrowed. The study methodology focused firstly on defining value chains for the solar and wind energy sectors in Turkey. This was done using licence and pre-licence information from the Energy Market Regulatory Authority and a unique administrative micro dataset (EIS) that includes all registered firms in Turkey and their domestic and export transactions. Secondly, coefficients for the value of production and trade were calculated. Finally, projections on industrial development and import–export values were estimated according to four scenarios for increased renewable energy (RE) capacity. As this study takes a static look at the scenarios, the current trade deficit resulting from low local value of production and technological gaps in the manufacturing of renewable energy equipment are also observed as core issues that should be addressed by renewable energy policies.