The upcoming general elections for both parliament and the presidency are the most significant event in Turkiye in 2023, and almost all policies are geared towards increasing the popularity of the ruling party. However, there is a risk associated with the imposition of populist policies by the government. On a positive note, a large natural gas reserve was discovered under the Black Sea last year, estimated to contain 700 billion cubic metres. The country plans to develop this reserve from 2023 onwards, to decrease its dependence on imported natural gas. The 2023 draft budget of Turkish President, Recep Tayyip Erdogan, includes a significant rise in energy subsidies, which could help to keep prices low and improve his chances in upcoming elections. Erdogan’s focus on the energy sector is an important part of his political platform and has significant implications for Turkiye’s economy and energy security.
Erdogan had requested the Central Bank of Turkiye to aggressively lower interest rates, which they did. This resulted in inflation reaching its highest level in 24 years, exceeding 85 per cent in October, before falling to around 50 per cent in March. This led to a cost-of-living crisis that affected Turkish households, reducing their purchasing power, and squeezing their earnings and savings. The ruling party’s manifesto aims to enhance investment through a structure based on a free-market economy that integrates with the world. To gain support from voters before a closely fought election, Turkish President Recep Tayyip Erdogan has announced plans to lower energy bills for both consumers and businesses. This move is aimed at addressing the ongoing cost of living crisis in the country. Turkey is set to receive its first shipment of natural gas from the Black Sea, which is part of President Recep Tayyip Erdogan’s efforts to boost his image before a closely contested election. The project is being developed in collaboration with a consortium that includes Subsea 7, a UK-based company, and Schlumberger, a US oilfield services group. The first delivery of natural gas from this ambitious project comes just weeks before the presidential election on 14 May, in which Erdogan faces a tough challenge from his main opponent, Kemal Kılıcdaroglu. Erdogan has announced that the government will reduce gas bills for consumers and businesses to ease the pressure on costs, especially as inflation has surged to over 50 per cent.
President Recep Tayyip Erdoğan has included the Black Sea gas discovery as a central theme in his campaign platform for the forthcoming May election, using it to demonstrate his government’s commitment to energy independence and vision for a more prosperous Turkiye. The gas find is also expected to have significant economic benefits by creating jobs, drawing in investment and decreasing Turkiye’s trade deficit. The gas deliveries are set to begin in 2023, with Turkiye aiming to generate up to 10 per cent of its energy needs using its own natural gas resources. Turkish state-owned energy company, TPAO, will extract the gas in collaboration with Norwegian energy firm, Equinor, and US-based energy company, ExxonMobil.
After election, the new administration will need to develop a new strategy for exploring and extracting energy resources in the Mediterranean Sea, as Erdogan has mainly focused on the Black Sea in recent years. Improved relations between Turkey and Greece regarding their issues in the Aegean Sea could make it easier to address problems in the eastern Mediterranean in a more multilateral format. Additionally, there is a chance that Putin may visit Turkiye on April 27 to attend the inauguration of the country’s first nuclear power reactor, which has been constructed by Russian state nuclear energy company, Rosatom.
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Nuclear energy is another key part of Erdogan’s energy agenda; despite opposition from environmental groups and some members of the Turkish public, Erdogan has remained committed to the project, arguing that it is necessary to meet Turkiye’s growing energy demands and reduce its dependence on fossil fuels. The unveiling of Turkiye’s hydrogen strategy provides another opportunity for Erdogan to advance his energy agenda and reduce Turkiye’s dependence on fossil fuels. The strategy is expected to have significant economic benefits, including the creation of jobs in the hydrogen industry and the reduction of Turkiye’s trade deficit.
Erdogan’s focus on the energy sector is a key part of his political agenda and has significant implications for Turkiye’s economy and energy security. The recent discovery of natural gas in the Black Sea, coupled with the promotion of EVs, the construction of Turkiye’s first nuclear power plant, and the unveiling of the hydrogen strategy, provide Erdogan with an opportunity to further advance his energy agenda and bolster his political standing ahead of the May election. The promotion of EVs is also seen as an important part of Turkiye’s broader energy strategy, as it will help to reduce the country’s dependence on fossil fuels and improve air quality in urban areas. The government’s target of having 30 per cent of all new cars sold in Turkiye to be electric by 2030 is a significant increase from current levels and is expected to have positive economic impacts.
The construction of Turkiye’s first nuclear power plant, Akkuyu, is which is being constructed with Russian assistance, will generate 4,800 megawatts of electricity, and provide a substantial source of baseload power for Turkiye. It will decrease Turkiye’s reliance on imports, enhance its energy security and create jobs and investment. It will also strengthen President Erdogan’s position in the May election, where energy independence and economic growth are likely to be crucial issues for voters. Turkiye has announced its plans to become a significant producer and exporter of green hydrogen through its recently unveiled a hydrogen strategy. Green hydrogen, which is produced by electrolysis using renewable energy sources, is considered essential to the transition towards a low-carbon economy, as it can replace fossil fuels in various sectors, such as transportation and energy production. Turkey’s hydrogen strategy aims to establish a domestic hydrogen market, support the production and export of green hydrogen and build the necessary infrastructure for its distribution and use. By 2023, Turkiye plans to achieve a production capacity of 1 GW of green hydrogen, equivalent to approximately 1 per cent of its total electricity generation capacity.
The government’s efforts to reduce dependence on imported energy and invest in renewable energy and clean technologies have the potential to create new jobs, boost economic growth and strengthen Turkiye’s position in the global energy market. The success of these initiatives could provide Turkiye with a much-needed economic boost, cementing Erdogan’s reputation as a capable leader and positioning Turkiye as a leader in the transition to a low-carbon economy. Even though extracting natural gas from the Sakarya field in the Black Sea may not be economically feasible soon, President Erdogan’s investment in the country’s energy sources can be seen as a move towards improving energy security and reducing Turkiye’s reliance on foreign energy sources. Erdogan appears to be prioritising Turkiye’s long-term interests in the Black Sea and may be using the development of the Sakarya field to gain support from Turkish voters in the upcoming presidential election.
Reducing dependence on imported energy, which accounts for more than 70 per cent of its energy needs, is seen as a critical step towards achieving energy security and stability. Furthermore, investing in renewable energy and clean technologies, such as green hydrogen, has the potential to create new jobs and boost economic growth. Turkiye’s emphasis on the energy sector, including the recent natural gas discovery in the Black Sea, the Akkuyu nuclear power plant, the promotion of EVs and the hydrogen strategy, is an essential part of President Recep Tayyip Erdogan’s plan to secure more votes in the May election and boost the Turkish economy.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor or Informed Comment.