Investors warm to Turkey’s geothermal sector

Alamy via Reuters

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Turkey is planning to offset its hydrocarbons deficit by broadening its renewable energy base, with the country’s geothermal sector being targeted by investors as a strong growth market.

Turkey’s current installed capacity of 1700 megawatts (MW) – much of which is being used in agriculture to heat greenhouses – ranks it among the leaders in Europe for operational geothermal generation.

Its position will be bolstered if it meets government targets of 3000 MW of installed capacity by 2030. 

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This is still well short of the identified capacity available, which surveys have put at up to 33,000 MW, divided between heating and electricity generation, with additional resources expected to be found as surveys expand. 

Any increase in domestic energy capacity would help pare away at Turkey’s trade deficit, which ran to $106.6 billion last year, with oil and gas imports accounting for 50 percent of this total most years, according to central bank estimates.

One of the reasons Turkey is rich in geothermal resources has also been a cause for concern: its high level of tectonic activity, with most of the country a high-risk zone for earthquakes. 

“When it comes to geothermal energy your geography is your destiny,” said Selçuk Ilikcan, the CEO of Turkey’s Geo Energy Holding (GMK), one of the country’s leading operators in the sector. “We are in an advantageous position because we have the necessary geological conditions necessary for geothermal.”

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This includes hot fault lines and the necessary rock formations containing water that represents the geothermal energy source, he explained to AGBI.

The World Bank has also recognised Turkey’s geothermal potential, having provided grants and loans worth $600 million for the sector in recent years, with the funding to support new projects and help attract a further $550 million in private sector investments. 

According to the international lender, the developments it is supporting will reduce Turkey’s carbon emissions by 30 million tonnes over the lifetime of the projects, which will create a combined 380 MW of new capacity. 

Batuhan Toker/Alamy via Reuters Connect

One difficulty the geothermal segment has to overcome is low levels of public and investor awareness of the resource’s benefits, according to Ilikcan. 

“Every time Turkey opens a new oil well the country jumps in the air from joy, but when a new geothermal source is found we should rejoice doubly because it is renewable and sustainable and has added value,” he said.

That added value can extend to technology and skills exports. Since the beginning of the war in Ukraine, European countries have stepped up efforts to wean themselves off their reliance on Russian gas, with increased investments in renewables being a direct result. 

As a leader in geothermal energy development and having built up its technology base, Turkey wants to export its know-how, said Ilikcan, representing a reverse of the energy import drain.