The Effect of Utilization of Domestic Coal Resources on Turkey’s Current Account Balance: An Example of Afsin-Elbistan Lignites

Abstract

The purpose of this study is to detect how much current account deficit burden could be reduced if we utilize Afşin-Elbistan lignites which are local energy sources. In this study, firstly literature survey in energy economics are made. After the literature survey; structure, characteristics and historical improvement of the electricity energy sector are explained. In addition to them, data on energy and electricity energy sector at the world and Turkey level are presented from a historical perspective and energy policies of important countries are included in order to see the current situation. Furthermore, the role of energy dependency on the current account deficit of Turkey is investigated by analyzing data. In this study, it is assumed that the lignite-fired power plants, which are expected to be established in Afsin Elbistan region, will be operational as of 2023 and the positive effect of the said power plants on the current account balance is calculated. The findings indicate that utilizing lignite sources will decrease the amount of natural gas consumption and it will have a positive effect on the current account balance of Turkey. This will also increase the share of the lignite in total electricity mix and decrease the share of the natural gas in the total electricity mix. Calculations utilized in this study also takes into account nuclear power plants which will be into operation in the following years. The reason why we do this is that they will affect the total electricity energy mix.