Turkey’s energy trade relations with Europe: The role of institutions and energy market

Abstract

Globally, the level of electricity grid interconnectedness between neighboring countries varies depending on the level of regional cooperation enabled by institutions. As suggested by previous research, in transboundary river basins, this variation affects the environment and the management of transboundary waters. In regions where all electricity utilities are connected and function at a synchronized frequency, and where integrated electricity market mechanisms function, the stress on the shared water resources tends to be less. Turkey shares river basins and power transmission lines in Europe both with the members of the European Union (EU) and with non-member states. The aim of this paper is to contribute to the literature on the geopolitics of renewable energy by comparing the level of Turkey’s electricity trade integrity with its EU-member European neighbors and with its non-EU-member neighbors and discuss the potential impacts of the transboundary electricity trade on the environment and the shared water resources. The main argument in this paper is that the higher level of electricity trade between Turkey and its EU-member neighbors is facilitated and boosted by Turkey’s membership to the European Network of Transmission System Operators for Electricity (ENTSO-E). The higher level of electricity interconnection leads to a higher level of cooperation in water and environment issues in the shared river basins between Turkey and Europe through the facilitating role of established institutions.

Energy and Environment in Turkish-Bulgarian Relations

“…On the other hand, there are no intergovernmental or regional organizations specializing in the integrated management of transboundary water resources. Examples from other parts of the world show that permanent intergovernmental bodies specializing in river basin management may facilitate water-related environmental issues (Sakal, 2020). The analysis of the bilateral agreements here shows that both countries' legislative organs took some crucial steps to establish grounds for regional cooperation to solve the regional environmental problems.…”

“…These regulations drove Turkey to integrate the electricity market with the EU. For Bulgaria, importing electricity produced from renewable resources became a viable policy option to reach the goals defined in the relevant directives (Sakal, 2020).…”

A comparative study on renewable and traditional electricity: The influence of the European Union framework and the impact of COVID-19

“…This sector needs institutional support to make the investment profile less risky [ 27 ], and the EU’s aim in this regard is precisely to promote renewable energy; our first hypothesis is thus supported, confirming that the institutional support provided by the EU helps to reduce the uncertainty and risk perceptions of the renewable EU companies. As the EU has set itself the goals of boosting renewable energy consumption, reducing production costs, implementing assessment and monitoring mechanisms, and lessening its energy dependency, EU policies prioritize environmental protection and the increasing use of renewables [ 20 ]. Public policymakers can lower the risk of clean energy investments, supporting them by means of grants, funding, and tax incentives aimed at start-ups, private investors, while also encouraging corporations to participate in clean energy practices [ 42 ].…”

“…Our findings are in line with previous empirical evidence showing that the renewable electricity sector needs support from public administrations to reduce the investment risk and change the risk-return association [ 27 , 42 , 61 ]. The EU aims to support and promote renewable energy, prioritizing the use of renewable electricity [ 20 , 39 ]. As such, it has developed different lines of action: promoting a taxonomy of clean energy investment to provide a legal framework, thereby boosting investors’ confidence; mobilizing funds to fill the renewable investment gap in the EU; and providing technical support for sustainable investments.…”

“…The so-called “European Green Deal” involves the target of achieving zero emissions of greenhouse gases in the EU by 2050, which represents a clear incentive to produce energy in a greener way. Nevertheless, the fact that the EU still depends on imports for energy [ 20 ] may jeopardize its strategy in this respect. In the heating sector for example, Europe is a net importer of gas from non-EU countries, which is not only an environmental issue but also an energy security issue [ 21 ].…”