Turkey aims to privatize all thermal power plants by 2015

Gas to Power Journal

Keen to fast-track the liberalisation process of the Turkish energy market, the government has set a timeline for divestment of state-owned power generation assets.

 "We hope to finish the privatization of Turkey's thermal power plants by 2015," Atif Kir, Head of Project Group, at the Turkish Ministry of Privatization Administration (OIB) told Gas to Power Journal in an interview.

To complete divestment of state-owned power plants, a total of 12,000 MW of state-owned coal- and gas-fired power plant capacity is up for auction.

"Private capital currently owns about 55 percent of power generation assets and our aims to get at least 85 percent of capacity to be run by private businesses in the near future," he said, implying that the remainder might be classified as 'strategic assets' which may remain in the hands of the state.

While some generators were put up for auctions as part of bundled assets, the ministry has chosen to privatize the two lignite-fired plants Kagal and Seyitimer as well as the 1,156 MW gas-fired Hamitabat power plants 'one-by-one'.

 

Limak, the private investor who chose to buy Hamitabat will have to upgrade the plant as its current efficiency level of around 45 percent is not enough to compete with modern gas-fired power plant installations with around 60 percent efficiency on average at current market conditions.

"We focus on privatizing assets, not on improving technologies, and following its divestment Hamitabat will no longer be a cost center for the government," Kir said, stressing that given Turkey's dependency on gas as the predominant source of power generation "upgrades of old plant assets are crucial".

To keep the aging power plant with over 1,000 MW of gas-fired capacity in continuous operation not only requires a technical upgrade but also investment in sufficient gas storage capacity adjacent to the plant.

"The transition process is a milestone and once this is over there are many gains for private energy consumers," Kir stressed, conceding that the privatization process is also a welcome way for the government to increase state revenues.

Source:http://gastopowerjournal.com/regulationapolicy/item/1537-turkish-ministry-aims-to-privatize-all-thermal-power-plants-by-2015