The Turkish energy sector—companies involved in the exploration and development of oil or gas reserves, drilling and refining, or integrated power utility companies including renewable energy, coal or nuclear power—has experienced major and systemic transformation and growth since the early 2000s under the rule of consecutive Justice and Development Party (AKP) governments.
The state’s monopoly over energy distribution and retail sale has been broken and taken over by private companies, creating substantial privatization revenue for the treasury. Electricity generation capacity has grown almost three-fold as market forces have been allowed—and encouraged through a variety of incentives—to build and run private power plants and sell electricity to third parties.[1] State-owned power plants have been privatized as the state withdrew from energy production, except for a few strategic facilities. Mining rights in many coalfields have been leased to private management in return for fixed royalties. Following the enactment of the Renewable Energy Law (No. 5346) in 2005, renewables have attracted sizable private investment, resulting in delayed yet notable additions, particularly in small-hydro, geothermal and wind power.[2] Last but not least, the country’s long-awaited first nuclear power plant was launched in 2018, bringing five-decade-long dreams of state elites closer to realization.
Turkey’s rush to energy, however, is more than a story of a burgeoning energy market and the rapid expansion of the country’s infrastructural capacity. The field of energy has been central to the AKP’s hegemonic strategy in myriad material and symbolic ways as the party consolidated its rule, in part through a heavy emphasis on infrastructure provision. Opening up the energy industry created a new accumulation opportunity for shrinking sectors and struggling capital owners in the aftermath of the 2001 financial crisis. 82 of the 100 richest business people in Turkey have become active in energy, which was largely state-owned a decade ago.[3] Energy has become a sector not just for big business and the well-connected, but also for a wide-range of small players, including garment manufacturers, municipalities, soccer clubs and retired bureaucrats.
The energy boom also provides the government a new source of control over owners of capital through its allocation of production and distribution licenses. Expansion in electricity consumption and production consolidates both the country’s attractive emerging market image and the AKP’s reputation as the great reformer. Distribution of free coal to the needy is an integral part of the AKP’s welfare politics and emblematic of the party’s pro-poor rhetoric. New pipelines transiting through Turkey to connect Caucasus oil and gas to Europe are touted by the government as proof of Turkey’s rising status as a global power. Ribbon cutting ceremonies of power plants are regularly attended by President Recep Tayyip Erdoğan himself, broadcast live on national television. It is no accident that AKP’s rising star, and Erdoğan’s son-in-law Berat Albayrak, entered politics as the energy minister right after he was elected to the parliament in 2015.
Boosting the government’s image as an able service provider, chaser of energy-independence and a business-friendly sovereign, the rush to energy may seem a winning strategy. It is also fraught, however, with ambiguity, contradictions and risks. It provokes resistance, especially in the countryside by those whose lives and environment are disrupted. Government incentives make good business, but only if the forecasted growth rates are achieved and primary energy resources are supplied without the interruption of droughts, workplace accidents or local protests, for example. Becoming an “energy player” is a step-up in the global arena, yet this new status comes with responsibilities, such as active involvement in global efforts to mitigate climate change. Understanding how the rush to energy that has been so central to the AKP’s hegemonic success comes loaded with heavy socio-environmental costs and risks is central to unwrapping the techno-authoritarian package of energy politics and begin working for alternative energy horizons that are clean, democratic and fair.
Energized Dispossession
One harmful social by-product of the AKP’s much touted drive for energy growth and independence is that energy infrastructure expansion often leads to the dispossession of local landholdings and, subsequently, livelihoods. To build a power plant, investors must first secure often valuable rural land located either by a coastline or riverbank, or near an existing transportation network. In the business-friendly environment proudly provided by the AKP government, vacant or forest land, or river sections, are often generously leased by the state at low cost for periods up to 49 years. But in a country with sizable rural communities scattered across the countryside, tripling the installed electricity generating capacity is not merely a technical matter, but a matter of ownership and livelihood when land needed for projects belongs to rural residents and is collectively used for social gatherings or as pasture. When accumulation opportunities in energy dictate displacing locals in one form or another, infrastructure projects inevitably face resistance, which has been growing across Turkey over the past decade.[4]
Energy companies aggressively bargain with locals over rural land, often offering bids significantly above market rate. But when they fail to convince farmers to exchange well-kept family land for a one-time lump sum, which often happens, projects stall and investors turn to the state for support. In such cases, the government increasingly resorts to an aggressive land appropriation procedure called Urgent Expropriation (UE). What makes UE a hardy legal tool is that rather than the long and cumbersome legal process of the traditional expropriation procedure, UE is an administrative decision, agreed upon and signed off by the council of ministers, and now by the president alone since the April 2017 constitutional referendum transferred vast powers to the executive. Land transfers are finalized within seven days of a signed UE decision. The property owner is compensated at fair market value but only learns of the seizure after a lump sum is deposited in an account in a state-owned bank that is opened in their name. The state becomes the owner of the property and can then lease it to private entities.
The AKP’s use of UE far exceeds its original intent as an exceptional wartime measure enacted in 1940 to give the government a procedure to confiscate private land and property for military purposes under the imminent threat of World War II. Only nine UE cases were approved by cabinets prior to 1990, and six in the 1990s, but UE decisions have skyrocketed under AKP rule, reaching a whopping number of 834 between 2002 and 2014.[5] By the early 2010s, the UE procedure had almost entirely replaced the ordinary expropriation procedure in cases of energy related investments. According to one study, hydropower plants top the charts, corresponding to 30.6 percent of the 704 UE decisions signed by the cabinet from 1983 to 2015.[6] The cumulative share of energy related UE decisions amounts to 61 percent.
Contemporary environmentalism in Turkey, which today has a strong rural component in contrast to its largely urban-based history, is heavily rooted in these growing land-use disputes. This is one reason why ecological sensitivities in Turkey, which was a pronounced theme of the Gezi Park protests in 2013, has greater appeal and a broader base in Turkey today.[7] It is also clear that the rapid expansion of the country’s energy infrastructure central to the AKP’s popularity now appears to be one of the party’s greatest potential political weaknesses.
Vulnerabilities of Energy Economics
Environmental activists who struggle against power plants intruding into rural livelihoods and land dispossession in the countryside correctly blame the AKP’s neoliberal privatization and deregulation policies as well as greedy corporations. But while investing in energy promises significant accumulation opportunities, profits are not a given. The boom in energy infrastructure is subject to broader and sometimes unfavorable macro and micro-political and economic forces, which can become major sources of vulnerability and possible political resistance.
Critical economists have long pointed out that the so-called Turkish economic miracle that mesmerized international investors throughout the 2000s and early 2010s, was to a large extent fueled by debt, thanks to ample global liquidity available for emerging markets.[8] The majority of this debt is owned by private companies, placing a significant financial burden on the shoulders of the private sector, and is often cited as a dangerous risk factor for Turkey’s economy. The real problem many argue, however, is that this debt is often channeled into unproductive sectors such as real estate or speculative large-scale infrastructure endeavors.
While power plants are not unproductive per se (and they potentially lower the trade deficit) the success of private power plants depends on a number of factors, including local community acceptance, a healthy resource flow (e.g., cheap coal or sustained precipitation) and sustained economic growth (i.e., growing demand for energy). Investments in energy infrastructure can yield great returns when they meet these requirements and are actually built to match demand. In the presence of burgeoning grassroots activism, and more recently economic stagnation, however, projects are getting delayed, and delays in a debt-ridden economy pose huge risks for companies investing with borrowed foreign currency.
A noteworthy example of this macro and micro-level vulnerability is the dramatic decline in the investment to profit ratios in the hydropower sector since the early 2010’s. With the passing of the Market Law to deregulate this sector in 2001 and the distribution of new private energy licenses picking up speed in 2007, this industry was in its heyday until 2010, with investment payback periods as low as five to seven months for a small size hydropower plant. But with the emergence of opposition movements and administrative court cases, this period doubled in the early 2010s, and it even tripled in regions where resistance and/or drought was stronger. Several companies went bankrupt as a result, and numerous energy licenses changed hands, empowering more established players with a stable cash flow. The Energy Market Regulatory Authority (EMRA) has cancelled over 100 production licenses due to inaction. Companies have already poured millions of dollars into these projects, yet they are deemed infeasible due to problems with cash flow, local resistance, drought, or in preparation for an impending economic crisis.
The number is only expected to increase, given that since January 2018 the Turkish currency has lost roughly 40 percent of its value against all major currencies and some companies operating on foreign loans have already begun to declare bankruptcy. Worsening economic conditions and possible stagnation would not only bring the energy-led accumulation model into a halt, but also provide a painful reminder that the expansion of the industry has been based on speculation as much as a desire for energy-independence.
Shirking Climate Change
A final contradiction of Turkey’s energy boom is between its desire to be a major player in the global energy field and the increasingly global expectation of climate stewardship to forestall climate change, about which Turkey has been surprisingly resistant and laggard. Turkey remains remarkably hesitant about the global climate change regime and has failed to achieve meaningful domestic progress. Despite attending the 1992 Rio Earth Summit, which launched the United Nations Framework Convention for Climate Change (UNFCCC), it took Turkey 12 years to sign it, becoming the one hundred and eighty-ninth participant country. Turkey signed the 1997 Kyoto Protocol only in 2009 amidst major pressure from the European Union and the international community.
Even when Turkey became a party to global climate change frameworks, it refrained from binding commitments, negotiating to secure a special status. Turkey’s hesitation sounds similar to many countries in the Global South: As an emerging market economy, Turkey believes it is neither fair nor viable to expect from a developing country the kind of environmental commitment developed countries should undertake. This developmentalist stance, however, puts Turkey in a unique position in global climate change politics as the sixteenth largest economy and a founding member of the Organization for Economic Co-operation and Development (OECD). Under UNFCCC Turkey remains the only Annex I party without mitigation commitments. When OECD and European Union (EU) countries agreed to form the Annex II bloc to financially support non-Annex I countries in their efforts to reduce emissions, Turkey’s “special circumstances” were recognized by its counterparts and the country was omitted from the new bloc.
To what extent Turkey can keep playing the developing country card and remain a mere observer in global climate change politics without incurring global or domestic criticism and without addressing the real climate impacts that could affect its development? To be fair, having contributed only 0.7 percent of global greenhouse gas emissions between 1850 and 2010, Turkey’s historical responsibility in climate change is insignificant.[9] Yet, with its 110 percent increase in total GHG emissions between 1990 and 2013, it has the highest rate of emission rate increase among Annex I countries.
The new trajectory of global climate change governance renders Turkey’s special circumstances stance untenable.[10] With its target to limit global warming significantly below 2 degrees celcius, and if possible to 1.5 degrees celcius by the end of this century, the 2016 Paris Agreement demands a more dedicated and sustained commitment from all nations. It also terminates the developing vs. developed country duality and demands that parties adhere to mitigation goals and set for themselves a strict review mechanism, which compels nations to negotiate more actively and take part in alliances with comparable, like-minded counterparts.[11] Turkey’s continuing resistance—it has yet to ratify the agreement—positions the country as an outcast in the global climate change regime. This position is neither sustainable anymore—given the new regime set by the Paris Accord—nor desirable, considering the climate change-related environmental troubles Turkey is and will be facing, such as droughts and revived coal-related air-pollution in metropoles.
Energy Justice, Not Energy Independence
In addition to the vulnerabilities and costs that bedevil the AKP’s embrace of energy sector growth and independence as a major element of their hegemonic strategy, a deeper contradiction underlies the energy sector boom: Turkey imports more than three quarters of its primary energy—mostly natural gas and oil—from its neighbors. This amount has not changed much in the last decade. It has even slightly increased since 2010, despite the aggressive expansion in installed capacity and the degradation of the rural fabric and the environment that has accompanied its rush to energy. Public engineers have struggled to discover new deposits of raw energy resources, but there is little to be found inside Turkey. To make matters worse, to lower its dependency on foreign natural gas, Turkey invested in coal power only to see an increase in coal imports by 40 percent because domestic coal cannot compete with cheap foreign coal. Nuclear power is presented as the solution, yet the country’s first-ever power plant in Akkuyu will be constructed, run and partially owned by Russia.
Environmentalists rightfully point to renewables and conservation; yet these, too, rely on foreign technology, which is harder to sell now given the recent currency crunch. Smart policies and technologies could certainly improve life and possibly lessen energy dependency. Ultimately, rather than continuing to pursue the mirage of energy independence, countries like Turkey must strive towards energy justice, whereby citizens take part in energy politics and decide on the kind of environment they want to live in, on their own.[12] This requires engaging in conversations about rural development, smallholding farming, the future of agriculture, regional autonomy, workplace safety and environmental commons and making them integral to energy talk. If the rush to energy has been both a foundation for, and a symptom of, a new authoritarian Turkey, the way out of this impasse includes making energy part of everyday politics, not remaining aloof from it.
Endnotes
[1] Turkey’s installed capacity has more than doubled from 35,587 (December 2003) to 87,737 (August 2018) megawatts in 15 years according to the Turkish Electricity Transmission Company, official statistics.
[2] As of August 2018 the total share of renewables (wind, solar and geothermal) accounts for 14.4 percent of total installed capacity. See Ministry of Energy and Natural Resources, Info Bank, Electricity.
[3] Adil Uçar, “Enerjik Zenginler,” Forbes, March 2014.
[4] See Erdem Evren, “The rise and decline of an anti-dam campaign: Yusufeli dam project and the temporal politics of development,” Water History 6/4 (2014); Murat Arsel, Benji Akbulut, and Fikret Adaman, “Environmentalism of the malcontent: anatomy of an anti-coal power plant struggle in Turkey,” Journal of Peasant Studies 42/2 (2015); Sinan Erensü, “Turkey’s Hydropower Renaissance: Nature, Neoliberalism and Development in the Cracks of Infrastructures,” in Fikret Adaman, Benji Akbulut, Murat Arsel, eds., Neoliberal Turkey and its Discontents: Economic Policy and the Environment under Erdoğan (London: I.B. Tauris, 2017).
[5] Alp Yücel Kaya, “Sermaye-emek kutuplaşmasının yeniden üretimi: Acele kamulaştırma kararlarında HES’ler,” in C. Aksu, S. Erensü and E. Erdem, eds., Sudan Sebepler: Türkiye’de su-enerji politikaları ve direnişler (Istanbul: İletişim, 2016).
[6] Buket Karaman, “Acele Kamulaştırma,” (Unpublished MA Thesis, Ankara University, Turkey, 2015).
[7] Sinan Erensü and O. Karaman, “The work of a few trees: Gezi, politics and space,” International Journal of Urban and Regional Research 41/1 (2017).
[8] A. Erinç Yeldan, and Burcu Ünüvar, “An assessment of the Turkish economy in the AKP era,” Research and Policy on Turkey 1/1 (2016).
[9] Ethemcan Turhan, Semra Cerit Mazlum, Ümit Şahin, Alevgül H. Şorman, and A. Cem Gündoğan, “Beyond special circumstances: climate change policy in Turkey 1992–2015,” Wiley Interdisciplinary Reviews: Climate Change 7/3 (2016).
[10] Semra Cerit Mazlum, “Turkey and post-Paris climate change politics: still playing alone,” New Perspectives on Turkey 56 (2017).
[11] Ibid.
[12] Ethemcan Turhan, “Right here, right now: a call for engaged scholarship on climate justice in Turkey,” New Perspectives on Turkey 56 (2017).
