Energy Transition

The Global Progress

Energy is at the centre of our modern daily lives. Our lives are filled with interactions and processes within the built environment, the manufacture of goods, transport, and communication. Three issues emerge as the global demand for energy is rapidly growing:

– Ensuring a reliable supply of energy as required by all consumers

– Ensuring affordable energy for households and for businesses that compete in global markets

– Minimising the environmental impacts and ensuring sustainability of energy production and consumption

At the core of these interconnected issues lies innovation and the accelerated deployment of low cost renewable energy, energy efficiency, electrification and digitalisation. Therefore, the cornerstones of the energy transition are:

– Choosing renewable energy technologies for the generation of electricity, heat and transport energy

– Utilising the energy efficiency potential to its full extent in the supply and demand of energy

– Shifting towards modern and clean energy technologies

The Sustainable Development Goals (SDGs) adopted by the United Nations General Assembly (UNGA) in 2015 provide a powerful framework for international cooperation to achieve a sustainable future for the planet. As one of the 17 SDGs, sustainable energy is central to the success of Agenda 2030. The global goal on energy – SDG 7 – aims to ensure access to affordable, reliable, sustainable and modern energy.

  • The Case of Turkey

    Turkey is experiencing a rapid and radical transition of its energy system with the growing economy and the subsequent energy demand, country-specific economic priorities and the markets that are becoming more competitive. Examples to this transition include the rapidly increasing renewable energy investments, on-site and distributed generation assets and the market model that is increasingly giving the opportunity to the consumers to make their own energy choices.

    The “National Energy and Mining Policy” is of paramount importance to pave the way for energy transition in Turkey as it prioritises the use of local renewable energy resources, development of grids and predictable markets. Likewise, The National Energy Efficiency Action Plan that was released at the beginning of 2018 puts forward concrete steps about how to improve and create a market for energy efficiency. Therefore it is an essential part of the energy transition. The recent auctions for renewable energy resource-zones and the tenders for pre-licensing show that renewable energy-based electricity generation has a strong cost advantage. In addition, substituting imported fuels with their domestic equivalents and the use of local technology will contribute to the national economy of Turkey by reducing current account deficit, creating economic activity and new job opportunities.

    Turkey has also the potential to become a leader in reshaping the energy landscape thanks to its diverse and abundant availability of renewable energy resources, the industry that can offer solutions to improve energy efficiency and the investors that are ready to utilise the opportunities offered by flexible and new business models. By turning this potential into reality, energy transition can contribute to economic growth as low-carbon technologies become more cost-competitive and enable the well-being and a sustainable future for its citizens.

    In order to utilise these opportunities, many actors of the public sector, energy sector associations, private sector, universities and the civil society are carrying out valuable research and activities to operationalise the targets and roadmaps of the Turkish energy transition. On the other hand, so far no platform exists that can facilitate the exchanges of views and enable the energy transition to be positioned on unbiased and independent pillars. To shape the energy transition that it is rapid, efficient and beneficial for all stakeholders and to contribute to the on-going debate, there is a need for a think-tank that focuses on topics related to energy economics and policy and that carries out research and technical analysis.

  • Benefits

    The transition to a more secure, affordable, cleaner and sustainable energy system comes with multiple benefits:


    Increased used of local renewable energy resources will diversify the energy mix and the sources of supply. It will localise energy production and reduce import requirements and costs. It will reduce risks of supply chain disruption and technical system failure, and reduce price volatility. A more efficient energy system will demand less resources and together with a more renewable energy system will ensure a more secure energy supply.


    Carbon dioxide that is released from the combustion of fossil fuels is regarded as the main driver for climate change. Fossil fuels also release various types of air pollutants that are harmful to human health. A more renewables-based and efficient energy system that relies less on fossil fuels will put the world on a pathway that limits the global temperature increase in line with the goals of the Paris Agreement and a cleaner local environment.

    Human health:

    Pollution from the extraction of resources, indoor and outdoor air pollution from fuel combustion cause adverse effects on human health. Energy transition will help improve human health and reduce health-related expenditures on the government budgets.


    The energy sector today employs more than 40 million people (direct and indirect jobs) of which nearly 10 million work in the renewables sector. Increased share of renewables and a more efficient energy system enabled by energy transition will create new employment opportunities across the entire supply chain of low-carbon technologies.

    Economic activity:

    Energy transition will boost economic activity through the investment stimulus and policy efforts that can enable the transition such as carbon pricing. These will be captured by the growing gross domestic product (GDP) of countries. But not all benefits can be measured by GDP alone. An improved environment, more jobs and better comfort and performance of our modern lives thanks to the energy transition will improve the overall human welfare.

  • Renewable Energy

    Renewable energy can be sourced from various resources: hydro, solar, wind, geothermal, biomass and ocean. Renewable energy technologies can be used to generate electricity, heating and cooling in buildings and the manufacturing industry as well as motor fuels for transport.

    Renewable power has a strong business case and globally it is well on track. Since 2009, solar PV costs have seen an impressive decline of 80% and this trend is continuing. Wind turbines costs were halved in the same period. In 2017, costs of electricity generation from wind averaged USD 6 cents per kilowatt-hour (kWh) worldwide. Several solar projects have also been offered at USD 3 cents per kWh. As a result, most advances in the renewable energy are seen in the power sector where bulk of the capacity additions have been in renewables capacity since the past 5 years.

    There is also a significant potential of renewable energy for non-power sectors. The success that has been achieved is mixed: solar water heater use in buildings is commonly applied across many countries. Geothermal and heat pumps are only used in few through enabling policies and energy pricing or where resources are available. Transport biofuel investments have been stagnant over the past years due to sustainability constraints, low crude oil prices and the high upfront costs of advanced biofuel pathways. Electric vehicles are showing promising developments where their sales have exceeded the 2 million threshold at the end of 2017.

  • Energy Efficiency

    Energy efficiency has been at the centre of the national energy strategy and policies of all countries for decades. Available technologies are plenty, they are affordable, and solutions are practical offering multiple benefits to the energy producers and users.

    The SDG target is to increase the rate of energy intensity improvements to 2.6% per year through 2030. The current rate remained at 1.8% compared to the year before despite energy prices remained low. This was among the main reasons that helped to maintain the global CO2 emission flat over the recent years. Until 2010 the energy intensity improvement rate was lower at 1.3%. This shows significant progress has been made, but there is lots of room to ramp up the current efforts. This can only be enabled by developing and deploying technologies and new policies, regulations and financing models. The synergies with the renewable energy technologies should also be utilised to expand low-carbon solutions and energy efficiency business models need to be integrated with the energy sector that is being increasingly digitalised.