A Nation at an Energy Crossroads

Turkey is one of the fastest-growing energy markets in Europe and the Middle East. Its economy, population, and urbanisation rate all drive rising electricity and heating demand — and satisfying that demand has, for decades, meant importing large quantities of natural gas, oil, and coal. The resulting import bill represents a major strain on Turkey's current account balance.

At the same time, global pressure to decarbonise — and Turkey's own 2053 net-zero target — means Ankara must chart a course that addresses both energy security and climate commitments. These goals do not always point in the same direction.

The Current Energy Mix

Turkey's energy system is characterised by high fossil fuel dependency, particularly in electricity generation and heating:

  • Natural gas accounts for a significant share of electricity generation, used widely in combined-cycle gas turbine (CCGT) plants
  • Coal — both domestic lignite and imported hard coal — remains a major generation source
  • Hydropower is Turkey's largest renewable source, though subject to drought risk
  • Wind and solar have grown rapidly but still form a minority of the total mix
  • Nuclear — Turkey's first nuclear plant, Akkuyu (under construction with Russian involvement), is expected to add capacity in coming years

The Gas Dependency Problem

Turkey imports approximately 97% of its natural gas needs. Gas imports cost Turkey several billion dollars annually in foreign exchange, which is a primary driver of the country's persistent current account deficit. Every rise in global gas prices directly worsens Turkey's trade balance and puts downward pressure on the lira.

The government's stated goal is to reduce this dependency through three parallel strategies:

  1. Domestic gas production — developing the Black Sea Sakarya field to substitute some imports
  2. Renewable energy expansion — reducing gas burn in the power sector through solar, wind, and geothermal
  3. Nuclear power — adding baseload low-carbon electricity via Akkuyu

Renewable Energy Progress

Turkey has made genuine progress in renewable energy deployment. It consistently ranks among the top markets for solar and wind installations in its region. Government support mechanisms — including the YEKDEM feed-in tariff scheme and the subsequent YEKA competitive tender model — have attracted both domestic and international investors.

However, integrating large volumes of variable renewables requires grid investment and storage capacity that is still catching up with generation additions. The transmission grid, managed by TEİAŞ, requires significant reinforcement to accommodate the renewable build-out pipeline.

Natural Gas as a "Bridge Fuel"

Despite the ambition to reduce gas imports, natural gas is expected to remain central to Turkey's energy system for the foreseeable future. Gas plants provide the flexible, despatchable generation capacity needed to back up intermittent renewables — a role that is difficult to replace quickly. Industry and district heating also rely heavily on gas.

Turkish policymakers have been careful to position gas as a bridge fuel rather than a long-term structural solution, but the pace of transition will be determined by economics, infrastructure, and domestic production success as much as by policy ambition.

Key Policy Documents and Targets

  • National Energy Plan: Turkey has published medium-term energy plans outlining capacity targets by fuel type
  • 2053 Net Zero Target: Turkey ratified the Paris Agreement and committed to net zero by 2053
  • MENR Strategy: The Ministry of Energy and Natural Resources publishes sector strategies covering upstream licensing, grid development, and efficiency

Challenges Ahead

Turkey's energy transition faces several structural challenges:

  • Financing large-scale infrastructure in a high-inflation, currency-volatile environment
  • Regulatory clarity for private investors in both upstream gas and renewables
  • Managing energy poverty — keeping electricity and gas affordable for lower-income households during the transition
  • Geopolitical complexity in maintaining diverse supply relationships

How Turkey resolves these tensions will shape both its domestic economy and its role as a pivotal energy actor in the broader European and Middle Eastern energy system.