Cheap coal from Putin fires Turkey up the dirty power generation league

Cheap coal from Putin fires Turkey up the dirty power generation league
Nonstop wheeling and dealing. Turkey alone has offset the decline in Russian coal imports to Germany, Italy, Spain, Ireland and Belgium.
By Akin li in Belgrade March 18, 2024

Turkey last year overtook Poland to, for the first time, become Europe’s second largest generator of coal-fired power, according to Ember’s Turkey Electricity Review 2024.

In 2023, Turkey’s electricity generation from coal reached a record-high of 118 TWh. That level produced a second record—the burning of coal was responsible for an unprecedented 36% of the country’s combined electricity generation. That compares to the 12% figure recorded for the EU.

Just over a decade ago, in 2013, coal-fired plants took a 25% share in the electricity production of both Turkey and the EU.

The review showed that Germany remained the leader in coal-fired power generation in Europe, producing 121 TWh of electricity from coal in 2023, while Poland generated 97 TWh using coal.

Also in 2023, Turkey produced 72 TWh of electricity from imported coal. That represented a 22% share in the country’s combined electricity production. Of the coal imports shipped in for electricity generation, Russian coal accounted for 76%.

In August 2022, the EU banned Russian coal imports. The bloc also announced that it would gradually reduce the flow of Russian natural gas to Europe conducted via pipelines. As a result of these moves, coal prices fell more than natural gas prices.

Comparing the 17 months before and after these EU sanctions on the Kremlin came into force in response to the Ukraine invasion, Turkey emerged as the country with the largest increase in thermal coal imports from Russia (+17mn tonnes), followed by China (+11mn), India (+7.6mn) and South Korea (+7.2mn).

In the 17 months following the EU embargo on Russian coal, the EU-27 countries cut their total imports of Russian thermal coal by 35mn tonnes compared to the shipments received in the 17 months preceding it. The Netherlands, which reduced its imports by 15mn tonnes, made the largest reduction in this period.

However, Turkey alone offset the decline in Russian coal imports to Germany, Italy, Spain, Ireland and Belgium.

In 2022, coal prices on international markets reached a record high of more than $450 per tonne, more than double the January prices recorded before the Russian invasion of Ukraine in February of that year.

In 2023, the prices fell back to $120 per tonne, lower than what was registered before the outbreak of the war. Notably, there were additional price discounts provided on coal shipped from Russia’s Black Sea ports, especially following the embargo imposed by the EU. 

In 2022, Russia for the first time overtook Colombia to become Turkey’s largest coal supplier. Russia’s share of coal imports exported to Turkey for electricity generation was 49% in that year.

Prior to 2022, Turkey imported 4mn tonnes of Russian coal per year for electricity generation based on the average values recorded over the previous five years. This figure more than tripled to 12.4mn tonnes in 2022. In 2023, it expanded to 17.4mn tonnes in 2023. 

Turkey paid $3.7bn for its coal imports in 2023.

It was in 2015 that imported coal began to dominate coal-fired electricity generation in Turkey for the first time. Over the last decade, the amount of electricity generated from imported coal in the country has doubled, while generation from domestic coal moved up by 12%.

Also in the past decade, Turkey has built 8.6 GW of additional coal power plants, including 6.4 GW of imported-coal power plants.

In 2023, Turkey’s Hunutlu imported-coal plant, which came online that year, alone produced 10 TWh of electricity.

China’s state-owned Shanghai Electric (Shanghai/601727) holds a 78% stake in Hunutlu. It is fired by coal exclusively imported from Russia.

In 2023, Turkey added 2 GW of solar power capacity, bringing solar’s share in the country’s electricity production to 5.7% in 2023 versus 4.9% in 2022.

Europe’s top-ranked country for solar in total power generation was Greece in 2023 with 19% while Poland (7.3%) and Bulgaria (8.8%) overtook Turkey.

The UK (4.6%) and Switzerland (6.6%), which have significantly lower solar energy potential, were Turkey’s closest competitors.

Meanwhile, annual wind power installation in Turkey fell to a 13-year low in 2023 with 411 MW of new capacity.

Wind produced 34 TWh of Turkey’s electricity, marking a 11% share of electricity production.

Although Turkey was ahead of France (9.5%), Norway (9.3%) and Italy (9%) in terms of its wind share, it was overtaken by Austria (12%) and Estonia (11%).