Hydropower Investment

Promotion Project (HIPP)

Turkish Power Market Monthly

Report (July 2012)

Monday, February 11, 2013

This publication was produced for review by the United States Agency for International Development. It was prepared by Deloitte Consulting.

Turkish Power Market Monthly

Report (July 2012)

USAID HYDROPOWER INVESTMENT PROMOTION PROJECT (HIPP)

CONTRACT NUMBER: EEM-I-00-07-00005-0

DELOITTE CONSULTING LLP

USAID/CAUCASUS OFFICE OF ENERGY AND ENVIRONMENT

MONDAY, FEBRUARY 11, 2013

DISCLAIMER:

The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

This document was prepared by:

Author Organization Contact Details

Nikoloz Sumbadze Deloitte Consulting nsumbadze@dcop-hipp.ge

+995-593-33-42-25

George Bochorishvili Deloitte Consulting gbochorishvili@dcop-hipp.ge

+995-32-24-45-70/71

Reviewer Organization Contact Details

Adrian Rouse Deloitte Consulting adrouse@deloitte.com

TABLE OF CONTENTS

EXECUTIVE SUMMARY ...................................................................................... 1

1. INTRODUCTION .......................................................................................... 2

2. SYNOPSIS OF TURKISH ENERGY ECONOMY ......................................... 3

3. SYNOPSIS OF TURKISH DAM ................................................................... 8

4. ANALYSIS OF TURKISH DAM ACTIVITIES IN JULY 2012 ....................... 9 4.1. Price Sub Groups on the Turkish DAM ......................................................... 11 4.2. Price Curve Dynamics by Week-Days .......................................................... 13 4.3. DAM Volume Data Analysis .......................................................................... 14

APPENDIX ......................................................................................................... 17

Acronyms Used in this Report

CPI Consumer Price Index

DAM Day-Ahead Market

EBRD European Bank for Reconstruction and Development

EMRA Energy Market Regulatory Authority

EUAS Turkish Electricity Generation Company

GW Gigawatt

GWh Gigawatt Hours

HIPP Hydropower Investment Promotion Project

HPP Hydro Power Plant

IFI International Financial Institutions

KGÜP Final Day Ahead Production / Consumption Program (Kesinleşmiş Gün Öncesi

Üretim/Tüketim Programı)

kWh Kilowatt Hours

MW Megawatt

MWh Megawatt Hours

PMUM Market Financial Reconciliation Center (Piyasa Mali Uzlastirma Merkezi)

SDV System Demand Volume

TEIAS Turkish Electricity Transmission Company

TL Turkish Lira

TOOR Transfer of Operating Rights

TPP Thermal Power Plant

USD United States Dollar

US c US Dollar Cents

y-o-y Year Over Year

1 | P a g e

Executive Summary

USAID’s Hydropower Investment Promotion Project (HIPP) intends to help facilitate

private sector development of at least 400 MW of new, climate friendly hydropower

in Georgia. This report has been published in support of this goal.

Turkey has been identified as a potential export market for Georgian electricity. This

report provides an analysis of power market prices and developments in Turkey,

thereby enabling potential developers, governments, IFIs and other stakeholders to

better understand the economics of investment into the Georgian hydropower

market.

The number of members registered on the DAM in July increased by 5.1% to 556

compared to 545 in June 2012.

Total trading volume in July was recorded at 4,602 GWh, a 25.76% increase on

June, 2012.

At 444.2 million USD, total turnover in the DAM for July was 43.44% higher than

June.

In July, trading volume in the DAM accounted for 22.78% of realized physical

system demand compared to 20.52% in June.

DAM prices in July peaked at 12.17 US c/kWh. The average price during the month

was 9.33 US c/kWh and the minimum price was 0.00 US c/kWh.

July’s peak hours were recorded during 11:00-16:00 when electricity demand in

Turkey reached 33,004 MWh on average and prices ranged between 11.33 - 12.17

US c/kWh for these days in these hours. Off-peak hours were recorded during

04:00-08:00 when electricity demand was 19,711 MWh on average and prices

ranged between 0.00 - 1.94 US c/kWh within these days and in these hours.

During July, maximum SDV was 33,481 MWh, whereas minimum and average SDV

were 19,376 MWh and 27,169 MWh, respectively.

Daily trading volumes on the DAM ranged from a low of 2,603 MWh to a high of

9,043 MWh; the average daily trading volume was 6,185 MWh.

July was the eighth full month of activity on the DAM.

2 | P a g e

1. Introduction

In early 2011, the USAID-funded Hydropower Investment Promotion Project (HIPP)

created the Special Studies Group to provide analysis of the Georgian and regional

electricity markets as well as to support the electricity market research needed for the

Investment Promotion Group within HIPP. The Turkish electricity market is the focal point

of energy sales from new Georgian HPPs and there appears to be strong interest in power

market developments in Turkey from many potential HPP developers, governments, IFIs

and others. By examining the hourly prices and volumes of the Turkish DAM, this report

intends to provide stakeholders such as these with a better understanding of the

economics of investment into the Georgian hydropower market.

The report analyzes the hourly prices and volumes of the Turkish DAM for the examined

month. Historical data on final day-ahead production volume, peak, off-peak and shoulder-

peak prices used in this report are based on data available from the TEIAS/PMUM

website1. TL/USD exchange rates have been calculated using data from the Central Bank

of Turkey’s website, including weekend exchange rates that are calculated using the last

preceding working days’ exchange rate. In addition, The Turkish Power Market Monthly

Report examines total turnover changes together with DAM’s share in total forecasted

demand. The figures on economic parameters are based on Central Bank of Turkey’s

Monthly Price Development Report for July 2012 and its Inflation Report for Quarter III.

The remainder of this report is structured as follows. Section 2 provides a brief overview of

the Turkish energy economy and its main parameters. Section 3 provides an overview of

the Turkish DAM and basic statistical information for July 2012. In addition, a comparison

with June 2012 is conducted. Section 4 provides analysis of the Turkish DAM prices and

volumes within monthly, weekly and hourly intervals, together with DAM volume data

analysis. Finally, data sources and other relevant material are provided in the appendix.

1 Market Financial Reconciliation Center, http://dgpys.teias.gov.tr/dgpys/

3 | P a g e

2. Synopsis of Turkish Energy Economy

In July, inflation in Turkey continued its upward trend, with the Consumer Price Index (CPI)

rising to 9.07%, compared to 8.87% in June. According to the Central Bank of Turkey and

the Turkish Statistical Institute, in July energy prices were 1.03% lower in July compared

to June. This was attributed to the fall in municipal water tariffs and cylindered gas prices.

Despite the increase in international oil prices, fuel prices in Turkey decreased due to

appreciation of the Turkish lira.

In July, aside from changes in economic parameters, there were various developments in

the Turkish energy sector which are worthy of mention. According to press reports, Turkish

Power Company Akenerji plans to sell a 45% share of its distribution unit Akcez. The stake

will come from each of its parents, Turkey's Akkok Group and Czech energy giant

CEZ. The owners tried to sell a stake in the company last year but pulled the bid due to

poor market conditions. AkCez was formed following the purchase of the Sedas

distribution company from the state in 2009. The unit supplies electricity to about 1.3

million customers in the industrial areas of northwest Turkey.

Inter RAO is considering acquiring the Trakya Elektrik gas-fired power plant in Turkey. The

power plant is located 100 km to the west of Istanbul. The main shareholder is

international power company AEI Services Ltd. Inter RAO is negotiating to acquire 100%

of AEI, which entered the Turkish market two years ago when it bought a 90% stake in

Trakya Elektrik for 400 million USD. If the deal goes through, it is expected to be finished

in August or September.

According to data released by the Ministry of Energy and Natural Resources of Turkey,

Turkey broke its highest every daily electricity consumption record upon extremely hot

weather conditions in June, 2012. In July daily electricity consumption ranged between

546-695 kWh, while record braking electricity consumption on July 26th reached 695

million kWh. Increased electricity usage for agricultural irrigation, industrial production and

extreme weather conditions all contributed to the strong demand. As a result of increased

electricity consumption, Turkey faced an electricity shortage, and imported power from

neighboring counties. Electricity consumption in July increased by 7.8% compared to the

same month in 2011, reaching 22.5 TWh. This pattern is expected to continue over the

coming months.

The ratio of electricity produced from natural gas in Turkey from January to July 2012 fell

to 45% compared to 52-53% over the same period in 2011, due to abundant rainfall. In the

first seven months of this year, about 30% of electricity consumed in Turkey was produced

by hydro power plants while generation from natural gas accounted for 40%. Turkey is

highly dependent on external energy sources such as oil, petroleum and gas and it pays

about 25 billion USD for imported energy each year which in turn increases the country’s

current account deficit. By July 2012, total electricity generated from natural gas amounted

to 55 TWh, compared to 40 TWh from hydro sources. At the same time, due to extreme

weather conditions monthly electricity imports in July 2012 reached to 433.6 GWh while

exports amounted to 181 GWh.

4 | P a g e

Table 1. Turkey’s Electricity Generation by Primary Energy Sources, 2012

An overview of July’s and 7 month’s electricity generation by primary energy sources in

Turkey is provided in Table 1.

Energy Sources Generation in

July (GWh) Share (%)

Jan – July

Generation (GWh) Share (%)

Hard Coal and Imported Coal 2,924.87 12.81 17,154.30 12.07

Lignite 3,350.65 14.68 20,647.90 14.52

Liquid Fuels 362.64 1.59 2,124.42 1.49

Natural Gas 10,209.29 44.72 55,961.99 39.36

Renewables and Wastes 185.32 0.81 1,865.07 1.31

Hydro 4,828.44 21.15 39,974.68 28.12

Geothermal and Wind 712.94 3.12 3,652.95 2.57

Imports 596.10 2.61 2,920.19 2.05

Exports 342.39 -1.49 2,128.46 -1.49

Gross Demand 22,827.87 100 142,173.03 100

In general, electricity generated from TPPs accounted for 73% for July above the 63%

mark over the entire 7 month period. The main source of TPP fuel was natural gas, which

amounted to almost half of Turkey’s electricity generation. On the other hand, electricity

generated from hydro sources was 27% in July, compared to 37% for the first seven

months’ of the year. Exports and imports over the period were relatively minor.

When the data for the first 7 months of this year and examined period is examined, it can

be concluded that the electricity production by the generation entities in the Turkish

electricity market differs depending on seasonal changes. According to Table 2, there is a

slight difference between July as a stand-alone month and the full 7 month’s statistics.

Private sector generation companies accounted for 60% of total generation while share of

state owned power generation was only 40%. Share of state owned power generation was

decreasing annually starting from the Turkish electricity market liberalization while share of

private sector generation shows a tendency to increase in these years.

5 | P a g e

Table 2. Turkey’s Electricity Generation by Electric Utility Group

Generators

Generation in

July (GWh) Share (%)

7 Month

Generation

(GWh)

Share

(%)

EUAS 6,842.7 30.31 49,102.76 30.85

Affiliated Partnership of EUAS 1,978.5 8.76 13,089.85 8.23

Mobile Power Plants 0 0 0 0

Generation Companies 12,275.6 54.39 85,380.10 53.65

Autoproducers + TOOR 1,477.4 6.54 11,571.15 7.27

Total 22,574.2 100 159,143.86 100

The extreme temperatures in July and the excessive increase in electricity consumption

negatively affected some of the country’s electricity infrastructure. Several power outages

were reported, caused by high electricity demand. A similar problem occurred during the

past winter when cold weather caused gas shortages and power outages. Such outages

often reflect transmission network issues, including overloading in big cities that caused

transformers explosions. Electricity distribution companies operating in these areas were

facing problems in satisfying excess demand, as reflected in power shortages. This

situation indicates a need for increased investment across the power system.

In spite of the regular increase in electricity consumption, there has not been made

sufficient investment in transmission and distribution systems which disabled distribution

companies to satisfy increased demand. Voltage fluctuations and interruptions also

prevented operation of electrical appliances in homes as well as damaged many hospital

air conditioners, generators and medical devices and led to electricity corruption. During

this period water level and electricity produced from dams’ decreased which increased

cost of electricity from natural gas. Increased electricity demand also doubled production

of lignite for electricity production as well.

TEIAS’s research planning and coordination department recently released 10 year

generation capacity projections for 2012 - 20212. The forecasts also include projections for

transmission and distribution, installed capacity, and electricity demand and supply based

on different scenarios up to 2021. According to the data released in the report, Turkey’s

installed capacity will be increased up to 56,473 MW in 2012, while in 2021 it will reach

95,769 MW. Based on TEIAS’s projections, development of Turkish installed capacity is

shown in Table 3.

2 Data and information used in the report was extracted from the TEAIS’s report, Turkish Electrical Energy 10-year Generation Capacity

Projection (2012-2021), available on the following link: www.teias.gov.tr/KapasiteProjeksiyonuARALIK2012.pdf

6 | P a g e

Table 3. Development of Total Installed Capacity – 2012-2021

Table 4. Peak Load and Demand Forecast

Year Thermal Hydro Wind + Renewables Total

MW % MW % MW % MW

2012 34745 62 19667 35 2060 4 56473

2013 35108 60 20893 36 2434 4 58436

2014 36691 59 23085 37 2741 4 62516

2015 38397 57 25883 38 3028 4 67307

2016 40515 56 29143 40 3028 4 72686

2017 42403 54 31793 41 3775 5 77971

2018 45491 54 33988 40 4523 5 84002

2019 48580 55 34074 39 5271 6 87924

2020 51668 56 34160 37 6018 7 91847

2021 54756 57 34246 36 6766 7 95769

Source: TEIAS

In the report, TEIAS also provided high and low electricity demand growth scenarios over

the forecast period, envisaging an average growth rate of 7.5% and 6.5%, respectively. In

addition, TEIAS expects load curve characteristics to change, while peak load increases

annually, reaching to 71,985 MW by 2021. Detailed annual development of peak load and

electricity demand series in case of high demand scenario is provided in Table 4.

Year Peak Load Electricity Demand

MW Increase (%) GWh Increase (%)

2012 38000 5.2 244026 6.4

2013 41000 7.9 262010 7.4

2014 43800 6.8 281850 7.6

2015 46800 6.8 303140 7.6

2016 50210 7.3 325920 7.5

2017 53965 7.5 350300 7.5

2018 57980 7.4 376350 7.4

2019 62265 7.4 404160 7.4

2020 66845 7.4 433900 7.4

2021 71985 7.7 467260 7.7

Source: TEIAS

7 | P a g e

Figure 1. Peak Load and Demand Forecast

TEIAS’s study also analyzes how to meet peak load and demand series according to:

Existing plants at end 2011

State owned under construction power plants

Private sector owned under construction power plants granted by license and

expected to be in service on proposed date based on “January 2012 Progress

Report” of EMRA and prepared according to Scenario 2 considered with High

Demand Scenario by EMRA.

In this capacity projection study covering the period 2012-2021, it is analyzed how to meet

the demand safely, i.e. with a suitable reserve, by taking into account existing plants,

under construction plants and licensed projects which are expected to be in service on

planned date. Considering macroeconomic targets, supply and demand is calculated as

well as balance and electricity deficit is defined. According to high demand scenario

electricity demand in Turkey in 2012 will be 244 TWh while it will reach 467 TWh by 2021.

When the generation capacity is considered, a domestic supply shortfall exists from 2017.

In this study, the covering of demand according to average and firm generating amounts is

calculated by taking into account maintenance, planned outages, forced outages, hydro

conditions and rehabilitation schedule of power plants in the existing system. While

calculating generating capacity amount, it is also assumed that there will be no deficit in

fuel supply. Figure 1 describes development of electricity demand, production and

shortages during the period of 2012-2021.

Source: TEIAS

8 | P a g e

Table 5. Distribution of DAM Participants

3. Synopsis of Turkish DAM

The number of participants in the DAM increased by 5.1% during July to 556 compared to

the 545 DAM participants observed in July 2012.

License Type June 2012 July 2012

Public Private Public Private

Production 6 294 6 320

Auto Producers 1 113 1 114

Wholesale 1 108 1 109

Retail 9 12 9 12

Auto Producers Group 0 1 0 1

Total 17 528 17 556

In July, total turnover amounted to 444.2 million USD compared to 299.7 million USD in

June 2012. Total trading volume in the DAM was recorded at 4,602,043 MWh compared to

3,659,328 MWh in June, 2012. There was a significant increase in the figures caused by

extreme weather conditions during the examined period, which resulted in high electricity

demand. Overall, electricity consumption in July increased by 7.8% against June, 2012 to

a daily average of 27,169 MWh since the beginning of July, while DAM’s daily average

reached 6,185 MWh in the examined period.

8

Description 06/2012 07/2012 Change

Base Average (US c/kWh) 7.94 9.33 17.51%

Peak Average Price (US c/kWh) 9.07 10.35 14.11%

Off-Peak Average Price (US c/kWh) 5.27 7.03 33.40%

Shoulder-Peak Average Price

(US c/kWh) 8.64 9.9 14.58%

Highest Price (US c/kWh) 11.10 12.17 9.64%

Lowest Price (US c/kWh) 0.00 0.00 0%

Total Turnover (USD) 299,705,113 444,238,034 48.23%

Average Hourly Turnover (USD) 416,257 597,094 43.44%

Maximum Hourly Turnover (USD) 759,502 1,012,432 33.30%

Minimum Hourly Turnover (USD) 0.00 0.00 0%

Average Weekdays Price (US c/kWh) 8.21 9.52 15.96%

Average Weekdays Turnover (USD) 441,682 616,366 39.55%

Average Weekend Price (US c/kWh) 7.33 8.88 21.15%

Average Weekend Turnover (USD) 356,931 549,984 54.09%

Description 06/2012 07/2012 Change

Total Volume (MWh) 3,659,328 4,602,040 25.76%

Highest Trading Volume (MWh) 7,208 9,043 25.46%

Lowest Trading Volume (MWh) 3,558 2,603 -26.84%

Average Trading Volume (MWh) 5,082 6,185 21.70%

Highest System Demand Volume

(MWh) 31,486 33,481 6.34%

Lowest System Demand Volume

(MWh) 17,607 19,376 10.05%

Average System Demand Volume

(MWh) 24,765 27,169 9.71%

Average Weekdays Trading Volume

(MWh) 5,224 6,292 20.44%

Average Weekend Trading Volume

(MWh) 4,750 5,924 24.72%

DAM’s share in total forecasted

demand (%) 20.52 22.77 10.96%

Note:

Base average price contains an average of all the hourly prices in the examined periods. Peak, off-peak, and shoulder-peak average prices and the highest and lowest price contain

prices for already determined peak, off-peak and shoulder-peak hours and maximum and minimum prices during the examined period. Total volume determines the volume of

electricity traded in the DAM. System demand volume represents the total volume of electricity consumed in Turkey.

Table 6. Summary of Prices and Turnover

Table 7. Summary of Volumes

9

4. Analysis of Turkish DAM Activities in July 2012

The Turkish DAM is characterized by hourly and even weekly fluctuations in price

spikes and production volumes. However, in the aggregate, trading volumes and market

clearing prices continue to grow. In July 2012, electricity production increased by 7.8%

compared with the previous year. Based on HIPP’s previous studies, this report uses

three price clusters: peak, shoulder-peak and off-peak hours. During daytime, peak

hours were categorized in 11:00-19:00 hours, whereas off-peak hours were between

02:00-08:00 and shoulder peak hours were 08:00-11:00 and 19:00-02:00.

PMUM’s web site provides day-ahead demand and production forecasts. Data is also

provided on KGUP that is the final schedule of the next day’s production after day-

ahead bidding3. HIPP uses KGUP as a proxy for demand on the Turkish power market.

The data in Table 8 shows there were considerable y-o-y change in key market

variables. Despite the spikes in electricity supply and prices for July 2012, key market

variables continued to show y-o-y increases in July 2012. On average, SDV demand

increased by 6.38% in July 2012 while trading volumes and prices on the DAM tended

to increase as well. In the examined month, DAM’s trading volume on average more

than doubled compared to July 2011, while prices showed a slight y-o-y decrease.

3 We estimated the difference between actual monthly production and KGUP monthly production at around 10.5% in July. (Total

sum of KGUP production for July was 20,214 GWh, while for the same time period actual production was 22,574 GWh).

Year Variables on Hourly

Basis July, 2011 July, 2012 Change

DAM Price (US c/kWh)

Max 11.70 12.17 4.02%

Average 9.40 9.33 -0.74%

Min 0.11 0.00 -110.00%

Trading Volume on the DAM (MWh)

Max 6,408 9,043 41.12%

Average 2,930 6,185 111.09%

Min 373 2,603 597.86%

System Demand Volume (MWh)

Max 31,890 33,481 4.99%

Average 25,540 27,169 6.38%

Min 18,100 19,376 7.05%

Table 8. Comparison of DAM variables

10

0123456789

10111213

US

c/kW

h

Daily Min Prices Daily Average Prices Daily Max Prices

0

2

4

6

8

10

12

0

5

10

15

20

25

30

35

00

:00

-01

:00

01

:00

-02

:00

02

:00

-03

:00

03

:00

-04

:00

04

:00

-05

:00

05

:00

-06

:00

06

:00

-07

:00

07

:00

-08

:00

08

:00

-09

:00

09

:00

-10

:00

10

:00

-11

:00

11

:00

-12

:00

12

:00

-13

:00

13

:00

-14

:00

14

:00

-15

:00

15

:00

-16

:00

16

:00

-17

:00

17

:00

-18

:00

18

:00

-19

:00

19

:00

-20

:00

20

:00

-21

:00

21

:00

-22

:00

22

:00

-23

:00

23

:00

-24

:00

US

c/kW

h

GW

h

Average System Load in 2011 Average System Load in 2012

Average DAM Price in 2011 Average DAM Price in 2012

Figure 1 compares variations in average system loads and prices between July 2011

and July 2012. As can be seen, hourly system volume was higher in July 2012 than in

July 2011. On average, DAM prices are following the same trend for both years,

peaking smoothly during 09:00-18:00 hours, then down turning slightly for 2 hours

during 18:00-20:00 hours and peaking again from 20:00 to 24:00.

Figure 2. Average System Load and Prices by Hours

Figure 3. Daily Minimum, Average and Maximum Prices in the DAM

11

0123456789

10111213

00

:00

-01

:00

01

:00

-02

:00

02

:00

-03

:00

03

:00

-04

:00

04

:00

-05

:00

05

:00

-06

:00

06

:00

-07

:00

07

:00

-08

:00

08

:00

-09

:00

09

:00

-10

:00

10

:00

-11

:00

11

:00

-12

:00

12

:00

-13

:00

13

:00

-14

:00

14

:00

-15

:00

15

:00

-16

:00

16

:00

-17

:00

17

:00

-18

:00

18

:00

-19

:00

19

:00

-20

:00

20

:00

-21

:00

21

:00

-22

:00

22

:00

-23

:00

23

:00

-24

:00

US

c/kW

h

Hourly Min Prices Hourly Average Prices Hourly Max Prices

As can be seen in Figure 3, there were considerable price spikes during July 2012.

July’s peak hours were recorded during 11:00-16:00 when electricity demand in Turkey

reached 33,004 MWh on average and prices ranged between 11.33 - 12.17 US c/kWh

for these days in these hours. Off-peak hours were recorded during 04:00-08:00 when

electricity demand was 19,711 MWh on average and prices ranged between 0.00 - 1.94

US c/kWh within these days in the following hours.

Figure 4 provides the distribution of minimum average and maximum DAM prices within

24 hours. As can be seen, electricity spot prices in the DAM followed typical hourly

trends, however some fluctuations were experienced. Peak hours were during the

daytime when the highest electricity price recorded at 12.17 US c/kWh. Minimum hourly

prices demonstrate considerable downturn during off-peak hours while within shoulder-

peak and peak hours, prices hike significantly, ranging from 9.5 – 10.58 US c/kWh on

average. In general, maximum and average prices were noticeably high in July

compared to the previous month’s trend.

4.1. Price Sub Groups on the Turkish DAM

In Figure 5, we use PMUM data to group July’s hourly prices in four price bands. Based

on our analysis, prices below 3 US c/kWh and prices between 3-6 US c/kWh were only

recorded during off-peak hours and accounted for the smallest share of the four bands.

Prices between 6-9 US c/kWh were recorded in all hours accounted for the second

largest share of market volume but mostly contributed to off-peak hours. Prices above 9

US c/kWh demonstrated the largest share of the four price bands. Sales in this price

band mostly occurred during shoulder-peak and peak hours and had a significantly

higher share of total volume.

Figure 4. Hourly Minimum, Average and Maximum Price in the DAM, July 2012

12

0%

20%

40%

60%

80%

100%

120%

00

:00

-01

:00

01

:00

-02

:00

02

:00

-03

:00

03

:00

-04

:00

04

:00

-05

:00

05

:00

-06

:00

06

:00

-07

:00

07

:00

-08

:00

08

:00

-09

:00

09

:00

-10

:00

10

:00

-11

:00

11

:00

-12

:00

12

:00

-13

:00

13

:00

-14

:00

14

:00

-15

:00

15

:00

-16

:00

16

:00

-17

:00

17

:00

-18

:00

18

:00

-19

:00

19

:00

-20

:00

20

:00

-21

:00

21

:00

-22

:00

22

:00

-23

:00

23

:00

-24

:00

Pe

rce

nt

of

Tim

e

0 to 3 US c/kWh 3 to 6 US c/kWh 6 to 9 US c/kWh More than 9 US c/kWh

Below 3 US c/kWh. The total number of hours when prices were below 3 US c/kWh

was only 13 out of a total 744 hours under study. This price range was recorded during

off-peak hours only and can be considered as an insignificant.

3 to 6 US c/kWh. The number of hours electricity was traded in this range was 34. This

price band was also recorded during off-peak period.

6 to 9 US c/kWh. Prices in this band accounted for 152 hours during July 2012, 112 of

which occurred during off-peak, 35 during shoulder-peak hours and 5 occurred during

peak hours.

Over 9 US c/kWh. There were 545 hours in this price band. During off-peak hours this

price band was recorded for 27 hours. Consequently, the total number of peak and

shoulder-peak hours in this price band were 275 and 243, respectively.

Overall, peak prices were dominant during the examined period. Figure 5 provides

distribution by price band for the period under study.

Figure 5. Distribution of Price Ranges, July 2012

13

0%

10%

20%

30%

40%

50%

60%

70%

80%

0 to 3US c/kWh

3 to 6US c/kWh

6 to 9US c/kWh

More than 9US c/kWh

1.75% 4.57%

20.43%

73.25%

Pe

rce

nt

of

Tim

e

0123456789

10111213

Mon Tue Wed Thu Fri Sat Sun

US

c/kW

h

Minimum Average Maximum

4.2. Price Curve Dynamics by Week-Days

Figure 7 shows that maximum and average electricity prices are high during weekdays,

while electricity prices decrease during weekends, as electricity demand softens.

Figure 8 provides a comparision of price bands within weekdays. Prices below 3 US

c/kWh were recorded only on Sunday and Monday, however with an insignificant share.

Prices between 3-6 USc/kWh occurred on all weekdays and had a minor share. Prices

between 6-9 US c/kWh were the second largest contributor in price breakdowns with a

Figure 6. Distribution by Price Ranges

Figure 7. Price Dynamics by Weekdays, July 2012

14

0.00%20.00%

40.00%60.00%

80.00%100.00%

Mon

Tue

Wed

Thu

Fri

Sat

Sun

4.17%

6.67%

3.33%

5.21%

4.17%

3.33%

5.21%

4.17%

6.67%

20.00%

19.79%

17.71%

17.50%

17.71%

19.79%

29.17%

72.50%

75.00%

78.13%

79.17%

77.08%

76.04%

57.50%

0 to 3 US c/kWh 3 to 6 US c/kWh 6 to 9 US c/kWh More than 9 US c/kWh

20

22

24

26

28

30

32

34

36

38

40

0

100

200

300

400

500

600

700

800P

erc

en

t

GW

h

System Daily Production Share of DAM

20% share of the time. During the examined period, prices over 9 US c/kWh were the

mainstay of the market, occuring around 75% of the time.

4.3. DAM Volume Data Analysis

Figure 9 illustrates daily production in the entire Turkish power market and the share of

the DAM. As can be seen, system loads are significantly lower during weekends in

Turkey. However, trading volumes in the DAM did not follow this trend in July. This

explains why the dashed line on the graph is acyclic to the system load, thereby

indicating an increasing share of trading volume as a portion of total system load during

weekends.

Figure 8. Price Range Breakdown by Weekdays

Figure 9. Daily Electricity Production and Share of the DAM, July 2012

15

0%

5%

10%

15%

20%

25%

30%

35%

40%

0.94%

6.05% 10.75%

19.35%

35.75%

24.33%

2.82% Pe

rce

nt

of

Tim

e

Volume in Single Hour (MWh)

2000

3000

4000

5000

6000

7000

8000

9000

10000

00

:00

-01

:00

01

:00

-02

:00

02

:00

-03

:00

03

:00

-04

:00

04

:00

-05

:00

05

:00

-06

:00

06

:00

-07

:00

07

:00

-08

:00

08

:00

-09

:00

09

:00

-10

:00

10

:00

-11

:00

11

:00

-12

:00

12

:00

-13

:00

13

:00

-14

:00

14

:00

-15

:00

15

:00

-16

:00

16

:00

-17

:00

17

:00

-18

:00

18

:00

-19

:00

19

:00

-20

:00

20

:00

-21

:00

21

:00

-22

:00

22

:00

-23

:00

23

:00

-24

:00

MW

h

Min DAM Volumes (MWh) Average DAM Volume Max DAM Volume

Figure 10 provides distribution of trading volume by groups in the Turkish DAM.

Figure 11 represents minimum, average and maximum volume dynamics within 24

hours.

Figure 10. Trading Volume by Group in the DAM, July 2012

Figure 11. Hourly Minimum, Average and Maximum Volumes in the DAM,

July 2012

16

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

MW

h

Min DAM Volumes (MWh) Average DAM Volume Max DAM Volume

Figure 12 represents daily minimum, average and maximum volume dynamics within

the examined period.

Figure 12. Daily Minimum, Average and Maximum Volumes in the DAM, July

2012

17

Appendix

Source materials used in this report can be found at the following locations.

1. Hydropower Investment Promotion Project, www.hydropower.ge

2. Energy Market Regulatory Authority, www.emra.gov.tr

3. Market Financial Reconciliation Center (PMUM), dgpys.teias.gov.tr/dgpys/

4. Market Financial Reconciliation Center (PMUM), www.pmum.gov.tr

5. Turkish Electricity Transmission Corporation, www.teias.gov.tr

18

USAID Hydropower Investment Promotion Project (USAID-HIPP)

Deloitte Consulting Overseas Projects - HIPP

13th floor, 11, Apakidze str, Tiflis Business Center,

Tbilisi, 0171, Georgia