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France's GDF-Suez is leading a consortium that plans to build a 1.32-gigawatt (GW) coal-fired power plant in Turkey, as the big push to develop the energy-hungry country's generation capacity turns back to coal in the face of continued high gas prices.

The Ada Enerji consortium - consisting of GDF Suez, International Power and Mimag Enerji - has applied to energy regulator EPDK for a licence to develop the plant at Yumurtalik on Turkey's east Mediterranean coast, an EPDK spokesman told Platts on January 28. The spokesman confirmed that the planned plant will burn imported hard coal.

The application represents the second such plan. Last week, Turkey's Bilgin Enerji Yatirim Holding confirmed that it has applied for a licence to develop a 1.37-GW plant at Yumurtalik burning imported coal, through subsidiary Suba Enerji Uretim. The two planned coal-fired plants are part of a growing trend in the development of the Turkish power market, which has seen annual investment totaling 4 GW over the past five years. EPDK President Hasan Koktas noted the same day, according to Hurriyet Daily News.

Struggling to convince major supplier Russia to lower gas prices, and facing difficulties in tapping sufficient sources in its strife-ridden neighbourhood, Turkey's gas bill is adding to the current account deficit. With that imbalance noted as the country's major macro-economic risk - in particular because it exposes it to any potential shocks in the precarious Eurozone banking sector - the government has launched a strategy to divert investment into power generation away from gas and back to coal.

Tactics including last year's cancellation of incentives of 20% or so for investors in gas-fired plants, the planned introduction of new incentives to encourage development of coal-fired capacity, liberalization of the country's coal fields, and a push to exploit overseas resources appear to be working. Applications for construction of gas-burning plants have decreased, while those for local and imported coal power plants have risen, the EPDK says. New applications for developing gas-fired plants - which had constituted the largest number of planned projects - have fallen, while investors are withdrawing and canceling current applications, the regulator reports.

"Using local resources to lower the production costs, as well as the energy ministry's new model that opened up coal reserves to exploitation by the private sector, contributes to creating considerable added value, which helps balance the current account deficit," EPDK said.