160 O. BAYULGEN
reports, newspaper articles and more than 35 semi-structured interviews
with policymakers, bureaucrats, renewable energy investors, and representatives of civil society organizations, I analyze the drivers of Turkish
energy policy in the past two decades.
Cornered by Crises
and Pressured by External Actors
It is safe to argue that the Turkish government’s interest in and reform
efforts to develop renewable energy have had little to do with concerns
about climate change and the environmental damage that arises from a
high addiction to fossil fuels. Otherwise, how can one explain the Turkish
government’s rather enthusiastic rush to develop and import coal, the
dirtiest fossil fuel, in the past two decades? 26 The development of the
renewable energy policy framework in Turkey needs to be seen, instead,
as part (and byproduct) of the reaction to the economic and energy crises
facing the country since the 1990s and as driven by a pragmatic need to
reduce vulnerability to price shocks, energy shortages, and high account
deficits. As the political economy literature has extensively shown, crises
create urgency for change, disrupt actors’ existing incentives, weaken the
resistance of those who prefer the status quo, and provide more political
space to implement policy reform than had existed before. 27
High levels of domestic and foreign debt, large fiscal deficits, high inflation, and periodic bank failures caused by weak governance of a series
of coalition governments, and the ongoing warfare with Kurdish separatists culminated in three economic crises in Turkey in 1994, 2000, and
2001. The last one especially was very costly in terms of the collapse of
output and high unemployment. The real GDP contracted by 7.5%, inflation reached 68.5%, and the Turkish lira depreciated by 115.3% against
the US dollar while the insolvent banks increased to 22 by 2003. 28 The
2001 crisis also made it obvious that the government could no longer
finance the capacity expansions necessary to meet future energy demand.
The state monopolies were unable to provide the investments to increase
efficiency in the generation and wholesale markets. 29 The crisis reinvigorated the privatization efforts which had started in the mid-1980s but
have been painstakingly slow and unsuccessful.
As a result, the Turkish parliament passed the 2001 Electricity Market
Law (#4628), which aimed at establishing a financially strong and
reports, newspaper articles and more than 35 semi-structured interviews
with policymakers, bureaucrats, renewable energy investors, and representatives of civil society organizations, I analyze the drivers of Turkish
energy policy in the past two decades.
Cornered by Crises
and Pressured by External Actors
It is safe to argue that the Turkish government’s interest in and reform
efforts to develop renewable energy have had little to do with concerns
about climate change and the environmental damage that arises from a
high addiction to fossil fuels. Otherwise, how can one explain the Turkish
government’s rather enthusiastic rush to develop and import coal, the
dirtiest fossil fuel, in the past two decades? 26 The development of the
renewable energy policy framework in Turkey needs to be seen, instead,
as part (and byproduct) of the reaction to the economic and energy crises
facing the country since the 1990s and as driven by a pragmatic need to
reduce vulnerability to price shocks, energy shortages, and high account
deficits. As the political economy literature has extensively shown, crises
create urgency for change, disrupt actors’ existing incentives, weaken the
resistance of those who prefer the status quo, and provide more political
space to implement policy reform than had existed before. 27
High levels of domestic and foreign debt, large fiscal deficits, high inflation, and periodic bank failures caused by weak governance of a series
of coalition governments, and the ongoing warfare with Kurdish separatists culminated in three economic crises in Turkey in 1994, 2000, and
2001. The last one especially was very costly in terms of the collapse of
output and high unemployment. The real GDP contracted by 7.5%, inflation reached 68.5%, and the Turkish lira depreciated by 115.3% against
the US dollar while the insolvent banks increased to 22 by 2003. 28 The
2001 crisis also made it obvious that the government could no longer
finance the capacity expansions necessary to meet future energy demand.
The state monopolies were unable to provide the investments to increase
efficiency in the generation and wholesale markets. 29 The crisis reinvigorated the privatization efforts which had started in the mid-1980s but
have been painstakingly slow and unsuccessful.
As a result, the Turkish parliament passed the 2001 Electricity Market
Law (#4628), which aimed at establishing a financially strong and