World energy demand is projected to increase 45% by 2030, with coal accounting for over a third of the rise. This level of growth in coal is unsustainable. Turkey's current energy profile relies heavily on thermal sources like coal, gas, and oil to generate electricity. However, Turkey has abundant renewable resources like solar, wind, hydro, and geothermal. The cost of solar power is decreasing and it is projected to reach grid parity within a few years without subsidies. For Turkey to meet its growing energy needs sustainably, it will need to incentivize investment in renewable sources like solar to take advantage of its resources.

1. TURKISH ENERGY OUTLOOK data retrieved from IEA, EMA (EPDK), McKeinze, World Energy Outlook 2008, Renewable Energy Outlook 2008 reports

2. WORLD PRIMARY ENERGY DEMAND World energy demands expand by 45% between now and 2030 (less than 2% a year), coal accounting for more than a third of the overall rise. This is unsustainable

3. Energy Related CO2 Emissions 97% of the projected increase in emissions come from non OECD countries mostly from China and India

4. 2008 TURKEY’sPROFILE Total Installed Capacity 42,000 MW (42 GW) 28 GW Thermal (Coal, Gas, Oil) 14 GW Hydro 0,363 GW Wind Total Electricity Generation 200,000 GWh Average Capacity Factor 55%* *Some plants are not available during the whole year (-30%) *Therefore average capacity factor may increase to 78% approx,

5. Transmission Superstructure 380 kV Very High Voltage line 10 000 miles 154 kV High Voltage line 20 000 miles 66 kV and less line 300 miles Power Transformers; 174 ea 380 kV total power 33220 MVA 1010 ea 154 kV total power 55584 MVA 57 ea 66 & less total power 672 MVA Distribution Network Total of 600 000 miles line More than 300 k transformers

6. Total Installed Power (GW)* *Based on existed operating and license granted projects

7. Engaged Total Installed Power (GW)*

8. Engaged Yearly Dispatchable Energy (TWh)

9. Engaged Yearly Dispatchable Energy (TWh)

10. Energy Demand Projection* *Energy demand expands with a CAGR of 7.4%

11. Demand not matched with engaged structures* The year where demand not matched with exisiting *100% availability considered (in fact deficit is more than this) Actual under constr.by state, by private energy dm

12. New Investments are must to meet the demand As seen from previous slide there is no spare installed capacity to match the demand At least 15 % over capacity needed to serve a reliable industry. Starting from 2011 new installed capacity must start servicing. Today is the right time to plan new energy investments.

13. Effects of Global Economic & Financial Crisis Crisis is driving down demand,prices & investments for now,rapid economic recovery could easily squizee supply capacity in the midium term.

14. TURKEY’s ENERGY RESOURCES Abundenthydro potential, over 100 billion kWh 70 % already engaged until 2015 Coal resources are not sufficient and poor quality; power plant cost goes high Imported good quality coal used for certain power plants Oil is fully imported Natural Gas heavily dependent on Russia Renewable energy resources are very abundent; solar, wind, geothermal & biomass

15. A new era for solar power is approaching Long derided as uneconomic It is gaining ground as technologies improve and cost of traditional energy sources rises Within few years unsubsidized solar power could reach the grid parity With competition solar power equipment manufacturers cut their costs by improving processes and in investing in R&D Government policies influences the sector development heavily By 2020 global installed solar capacity could be about 30 times its level today

16. Important role of Government subsidies in the growth of solar power Many countries with their feed-in tariffs requires electricity distributers to pay above-market price Germany, Spain, Italy, Grece, France, etc .. are the most prominent countries U.S. gives tax credit (FIT in some states, Fl) No way to compete now with traditional energy sources without such policies

17. Sector’s economics are changing Over the last two decades cost of manufacturing and installing PV solar power systems has decreased prominently By contrast, cost of generating electricity by natural gas fired plants has been rising (with the exception of global crisis period) continuously Even the cost of electricity by planned nuclear power plants seems to be very high Rising fuel prices, future regulations aiming to limit greenhouse gas emission and the need to build more power plants to keep up with the growing demand could push cost of conventional electricity higher globally and in Turkey too

18. Growing Competitiveness of Solar Turkey

19. Global Solar Demand Demand is forcasted by estimating payback time in different countries and regions Payback estimates rest on projected system cost, power prices, local sunlight and incentives By 2020, at least 10 regions by strong insolation will have reached grid parity, with the price of solar electricity falling from 30 cents/kwh to 10 c Until 2020, installed global solar capacity will grow by 30-35% a year, from 9 GW to 200 GW requiring capital investments of more than $500 billion

20. Global Solar Market

21. Yearly PV Demand in Europe

22. Installed Capacity in TURKEY & EU

23. Conclusion Conventional energy prices are getting higher Reaching grid parity is few years ahead Turkey signed Kyoto Agreement Turkey possesses abundent hydro, biomass, solar&geothermal resources Turkey is urgently in need of new installed electric power capacity Solar business is capex intensive but doesn’t need fuel Interest rates are reasonably coming down Industry needs a stimulus package and an incentive scheme Foreign&localinvesters are ready to take initiatives Banks need power purchase agreement (PPA)