Electricity distributors under heavy debt

The electricity sector in Turkey is $7 billion in debt and “every 10-cent increase in the [foreign exchange rate] means a $700 million lira increase in our debt,” Serhat Cecen, the president of the Electricity Distribution Services Association (ELDER), said in response to journalists’ questions at a press conference last week.

Cecen said distribution companies have tripled their network investments since privatization. “Either small or big, the sector is realizing nearly 10,000 projects a year,” he added. “As we always have been, we must be everywhere from Edirne to Kars, from central Izmir to Istanbul. As these investments are completed, the quality of service and satisfaction will also increase.”

Cecen reiterated that, according to legislation, electricity distribution companies could only recoup their investments in 10 years, saying: “We can only invest with foreign currency loans for this.” Stating that the electricity distribution sector had problems arising from exchange rate risk and that this situation directly affected the whole electricity sector, he added: “The sector has a $7 billion obligation to the banks. Every 10-cent rise in the dollar will mean an increase of 700 million

lira in our debt.”

Cechen said the sector is experiencing a serious transformation under the influence of rapid technological changes. “We will renew the old network until 2020 and we will get it smart after 2020. Of course, they are partly intertwined,” he said. The great technological changes taking place in mobile phones and computers will affect the electricity sector, he added. “We will forget about the electricity work we now know in the future. It will be unreasonable not to buy an electric car in 10 years’ time. Everyone will have electricity generation facilities on their roofs. Consumption per capita will be reduced thanks to energy efficiency,” he said.

Looking to the future, Chechen stated that the development that would facilitate electricity generation with rooftop solar systems is expected to come from energy storage technologies. “When the storage technologies become cheaper, many people will produce their electricity through roof panels without needing to sell to the network. The most critical technology of the near future will be storage technologies,” he said.