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© ICIS HEREN - Turkey link to EU grid may trigger Balkan price spikes
2010-09-01
Turkey is to connect to the European electrical grid this month, technology giant GE confirmed on Wednesday (1st September). This could potentially lead to a change in the dynamics of the Balkan power markets and push regional prices up by an average €5.00/MWh, according to participants. Traders said markets across the region are awaiting with "bated breath" the synchronisation of the Turkish grid with the territory served by the European Network of Transmission System Operators for Electricity. The move could see energy-hungry Turkey absorb "hundreds of megawatts of power" from the Balkans. "Turkish power prices are more expensive than in other regional countries. If prices remain as they are, it will be more convenient for counterparties to export electricity to Turkey than flow capacity into Greece, Serbia, Romania or Bulgaria." a Greek trading source said. Bulgarian traders speculated that regional Day-ahead Baseload prices, currently hovering in the €40.00-€50.00/MWh range, including export fees, could gain another €5.00/MWh once Turkey begins absorbing capacity from southeast Europe. The cross-border system may enable a new, cleaner energy mix for Europe, TEIAŞ, the Turkish grid operator, said in a statement. "There is a demand for renewable energy in European countries, and Turkey has massive renewable energy sources, which makes this new relationship mutually beneficial to both TEIAŞ and ENTSO-E," the statement added. Capacity flow It was not immediately clear what capacity will flow in both directions once the links become commercially operational. There are two existing 400kV cable lines between Bulgaria and Turkey, and a similar line between Greece and Turkey. ENTSO-E and TEIAŞ have already carried out localised operation tests in high-load and low-load conditions (see EDEM 7 June 2010). But the two bodies are now looking to start equivalent trial operations on the Turkish system with the Continental European synchronous area from September. Earlier this year, ENTSO-E said the test would comprise three phases. There will be an initial two-week stabilisation period, a two-week trial of non-commercial energy exchanges between Turkey, Greece and Bulgaria, and eventually the commercial exchange of a limited amount of capacity between Turkey and the synchronous area of Continental Europe. The commercial exchange is thought to be due to start in mid-October, although this could not be immediately confirmed (see EDEM 18 June 2010). Turkish annual power demand is expected to double to 499TWh by 2020, driven by economic growth. To match the rise in consumption, the country is seeking to double its production to 96GW over the same period. The new capacity will come from a variety of sources. It includes plans for an estimated 12GW of coal- and gas-fired production, an estimated 10GW of nuclear capacity and multiple projects in the renewables sector. But even with the new capacity coming online in the short run, Turkey will have to plug the gaping shortfall by importing power from southeastern Europe. AS (THE ICIS HEREN REPORTS - EDEM 14.168 / 1 September 2010)

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