Turkish state power firm weighs in to help limit soaring prices

Turkey's state power generation firm EUAS is offering electricity direct to the market to help limit soaring prices, industry sources and traders said on Friday, as demand from households surges due to cold weather. EUAS usually sells the bulk of its production to state power distributors which then sell it on to private companies. "Prices have rallied to historical levels," one industry source said. "The state authority is getting involved to stabilise the price around 235 lira per megawatt hour as yesterday's levels are not sustainable."
The day-ahead electricity price at Turkey's energy exchange (EPIAS) rose to 586 lira ($166.98) per megawatt hour on Thursday with hourly prices rising as high as 1,900 lira, data from the exchange showed. Such levels were the highest in years, traders said. On Friday, the day-ahead average price was 227 lira.
Turkey's daily natural gas consumption has risen to record highs in December, largely due to colder-than-usual weather, higher power consumption and what traders describe as poor supply planning and lack of coordination by the state energy authorities. State pipeline operator Botas has cut supply to gas-fired power plants across the country by 90 percent and advised some industrial firms such as in the cement sector to cut back production.
The Chamber of Electrical Engineers (EMO) said Turkey sticking with a summer time zone to make more use of daylight had in turn boosted demand for electricity by 6.5 percent in November as the sun did not rise until after 0830 am local time. Turkey has nearly 80,000 megawatts (MW) of electricity production capacity but cuts in gas supply means those plants cannot operate, thereby reducing supplies.
"Many companies are making hefty losses because of these prices," a power trader said. "They can't operate their plants due to lack of gas supplies so they have to buy electricity from the market at these elevated prices." On average, 29 percent of Turkey's power generation is from natural gas, but in winter it is still 40 to 50 percent. A lack of sufficient gas storage poses a risk to supply security. Speaking at the opening of Turkey's first Floating Storage and Regasification Unit (FSRU) in the Aegean province of Izmir, President Tayyip Erdogan said Ankara needed to prioritise investments in liquefied natural gas to help meet gas demand.