Natural gas demand in Turkey

Erdogdu, Erkan (2009): Natural gas demand in Turkey. Published in: Applied Energy , Vol. 87, No. 1 (January 2010): pp. 211-219.

Abstract

On average, energy demand of Turkey is mounting by 8% annually, one of the highest rates in the world. Among primary energy sources, natural gas is the fastest growing one in Turkey. Gas consumption started at 0.5 bcm (billion cubic meters) in 1987 and reached approximately 35 bcm in 2007. Turkish natural gas usage is projected to further increase remarkably in coming years. The present paper focuses the characteristics of this demand and estimates short and long-run price and income elasticities of sectoral natural gas demand in Turkey. The future growth in this demand is also forecasted using an ARIMA modelling and the results are compared with official projections. The paper reveals that natural gas demand elasticities are quite low, meaning that consumers do not respond possible abusive price increases by decreasing their demand or substituting natural gas with other energy sources. Since consumers are prone to monopoly abuse by incumbent, there is a need for market regulation in Turkish natural gas market. Based on forecasts obtained, it is clear that the current official projections do not over/under-estimate natural gas demand although past official projections highly overestimated it.

• Item Type: MPRA Paper
• Language: English
• Keywords: Turkish natural gas demand; Elasticity; ARIMA modelling
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q47 - Energy Forecasting; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy

References

[1] Erkan Erdogdu, Electricity demand analysis using cointegration and ARIMA modelling: a case study of Turkey, Energy Policy 35 (2) (2007), pp. 1129–1146. Article | PDF (1654 K) | View Record in Scopus | Cited By in Scopus (12)

[2] CIA (Central Intelligence Agency). The world factbook, 2007. <http://www.cia.gov>[accessed 26.12.2007 at 15:56].

[3] IEA (International Energy Agency). 2004 Energy Balances for Turkey, 2007. <http://www.iea.org> [accessed 30.12.2007 at 18:02].

[4] J. Bentzen and T. Engsted, Short- and long-run elasticities in energy demand: A cointegration approach, Energy Econ 15 (1) (1993), pp. 9–16. Abstract | PDF (826 K) | View Record in Scopus | Cited By in Scopus (28)

[5] G. Kouris, Elasticities – science or fiction?, Energy Econ 3 (2) (1981), pp. 66–126.

[6] L.P. Drollas, The demand for gasoline: further evidence, Energy Econ 6 (1) (1984), pp. 71–82. Abstract | PDF (1431 K) | View Record in Scopus | Cited By in Scopus (21)

[7] J. Stewart, Econometrics, Philip Allan, Hemel Hempstead (1991).

[8] C. Dahl and T. Sterner, Analysing gasoline demand elasticities: a survey, Energy Econ 13 (3) (1991), pp. 203–210. Abstract | PDF (839 K) | View Record in Scopus | Cited By in Scopus (85)

[9] R.S. Pindyck, The structure of world energy demand, MA.: MIT Press, Cambridge (1979).

[10] R. Wolffram, Positivistic measures of aggregate supply elasticities: some new approaches—some critical notes, Am J Agr Econ 53 (2) (1971), pp. 356–359. Full Text via CrossRef

[11] B. Traill, D. Colman and T. Young, Estimating irreversible supply functions, Am J Agr Econ 60 (3) (1978), pp. 528–531. Full Text via CrossRef

[12] J.M. Dargay, The irreversible effects of high oil prices: empirical evidence for the demand for motor fuels in France, Germany, and the UK. In: David Hawdon, Editor, Energy demand: evidence and expectations, Surrey University Press, London (1992).

[13] D. Gately, Imperfect price-reversibility of U.S. gasoline demand: asymmetric responses to price increases and declines, Energy J 13 (4) (1992), pp. 179–207.

[14] J.M. Dargay and D. Gately, The response of world energy and oil demand to income growth and changes in oil prices, Annu Rev Energy Env 20 (1995), pp. 145–178.

[15] J.M. Dargay and D. Gately, The imperfect price reversibility of non-transport oil demand in the OECD, Energy Econ 17 (1) (1995), pp. 59–71. Abstract | PDF (1181 K) | View Record in Scopus | Cited By in Scopus (10)

[16] R. Haas and L. Schipper, Residential energy demand in OECD-countries and the role of irreversible efficiency improvements, Energy Econ 20 (4) (1998), pp. 421–442. Article | PDF (404 K) | View Record in Scopus | Cited By in Scopus (40)

[17] D.L. Ryan and A. Plourde, Smaller and smaller? The price responsiveness of nontransport oil demand, Quart Rev Econ Fin 42 (2) (2002), pp. 285–317. Article | PDF (582 K) | View Record in Scopus | Cited By in Scopus (3)

[18] R.F. Engle and C.W.J. Granger, Co-integration and error correction: representation, estimation, and testing, Econometrica 55 (2) (1987), pp. 251–276. MathSciNet | Full Text via CrossRef

[19] S. Johansen, Statistical analysis of cointegration vectors, J Econ Dyn Cont 12 (2–3) (1988), pp. 231–254. Abstract | PDF (1106 K) | MathSciNet | View Record in Scopus | Cited By in Scopus (2909)

[20] V.S. Ediger and H. Tatlidil, Forecasting the primary energy demand in Turkey and analysis of cyclic patterns, Energy Convers Manage 43 (2002), pp. 473–487. Article | PDF (452 K) | View Record in Scopus | Cited By in Scopus (44)

[21] H. Ceylan and H.K. Ozturk, Estimating energy demand of Turkey based on economic indicators using genetic algorithm approach, Energy Convers Manage 45 (2004), pp. 2525–2537. Article | PDF (302 K) | View Record in Scopus | Cited By in Scopus (36)

[22] Utgikar and Scott, Energy forecasting: predictions, reality and analysis of causes of error, Energy Policy 34 (2006), pp. 3087–3092. Article | PDF (165 K) | View Record in Scopus | Cited By in Scopus (6)

[23] B. Gilland, Population, economic growth, and energy demand, 1985–2020, Popul Dev Rev 14 (2) (1988), pp. 233–244. Full Text via CrossRef | View Record in Scopus | Cited By in Scopus (5)

[24] Z. Gungor and F. Arikan, A fuzzy outranking method in energy policy planning, Fuzzy Sets Syst 114 (1) (2000), pp. 115–122. Abstract | PDF (103 K) | View Record in Scopus | Cited By in Scopus (14)

[25] A. Demirbas, Energy balance, energy sources, energy policy, future developments and energy investments in Turkey, Energy Convers Manage 42 (10) (2001), pp. 1239–1258. Article | PDF (141 K) | View Record in Scopus | Cited By in Scopus (95)

[26] Isik, Y. Turkey’s energy prospects in the EU–Turkey context, EU–Turkey Working Papers, No. 9, Center for European Policy Studies; 2004.

[27] V.S. Ediger and U. Camdali, Energy and exergy efficiencies in Turkish transportation sector, 1988–2004, Energy Policy 35 (2007), pp. 1238–1244. Article | PDF (194 K) | View Record in Scopus | Cited By in Scopus (10)

[28] V. Unler and R. Alper, Improvement of energy demand forecasts using swarm intelligence: the case of Turkey with projections to 2025, Energy Policy 36 (2008), pp. 1937–1944.

[29] G.P.E. Box and G.M. Jenkins, Time series analysis: forecasting and control, Holden Day, San Francisco (1978).

[30] IEA (International Energy Agency). International Energy Agency Data Services, 2008. <http://data.iea.org> [accessed 24.03.2008 at 10:25].

[31] BOTAS (Turkish Pipeline Corporation). Natural Gas Market Activities, 2004. <http://www.botas.gov.tr> [accessed 24.03.2008 at 10:42].

[32] IEA (International Energy Agency). Energy policies of IEA countries: Turkey. 2005 review. Paris, France: International Energy Agency; 2005.

[33] MENR (Ministry of Energy and Natural Resources). Annual activation report of 2002, Ankara; 2002.

[34] A.M. Kilic, Turkey’s natural gas necessity, consumption and future perspectives, Energy Policy 34 (2006), pp. 1928–1934. Article | PDF (287 K) | View Record in Scopus | Cited By in Scopus (10)

[35] H.K. Ozturk, H. Ceylan, O.E. Canyurt and A. Hepbasli, Electricity estimation using genetic algorithm approach: a case study of Turkey, Energy 30 (7) (2005), pp. 1003–1012. Article | PDF (251 K) | View Record in Scopus | Cited By in Scopus (26)

[36] Erdogdu, Erkan. Turkey and Europe: undivided but not united. Middle East review of International Affairs (MERIA) 2002; 6(2): 40–51 <http://meria.idc.ac.il/journal/2002/issue2/jvol6no2in.html>.

[37] Erkan. Erdogdu, Nuclear power in open energy markets: a case study of Turkey, Energy Policy 35 (5) (2007), pp. 3061–3073. Article | PDF (395 K) | View Record in Scopus | Cited By in Scopus (6)

[38] H. Ceylan, H.K. Ozturk, O.E. Canyurt and A. Hepbasli, Electricity estimation using genetic algorithm approach: a case study of Turkey, Energy 30 (7) (2005), pp. 1003–1012.

[39] S. Haldenbilen and H. Ceylan, Genetic algorithm approach to estimate transport energy demand in Turkey, Energy Policy 33 (1) (2005), pp. 89–98. Article | PDF (256 K) | View Record in Scopus | Cited By in Scopus (22)

[40] L.W. Hobbs, C.E. Jesurum, V. Pulim and B. Berger, Topological modeling of cascade amorphization in network structures using local rules, Materials Science and Engineering A 253 (1–2) (1998), pp. 16–29. Article | PDF (945 K) | View Record in Scopus | Cited By in Scopus (9)

[41] A. Sözen, E. Arcaklıoğlu, M. Özalp and N. Çağlar, Forecasting based on neural network approach of solar potential in Turkey, Renewable Energy 30 (7) (2005), pp. 1075–1090. View Record in Scopus | Cited By in Scopus (22)

[42] N. Sözen and E. Arcaklioğlu, Exergy analysis of an ejector-absorption heat transformer using artificial neural network approach, Applied Thermal Engineering 27 (2–3) (2007), pp. 481–491.

[43] D.M. Toksarı, Ant colony optimization approach to estimate energy demand of Turkey, Energy Policy 35 (8) (2007), pp. 3984–3990.

[44] V.S. Ediger and S. Akar, ARIMA forecasting of primary energy demand by fuel in Turkey, Energy Policy 35 (3) (2007), pp. 1701–1708. Article | PDF (296 K) | View Record in Scopus | Cited By in Scopus (18)

[45] D. Akay and M. Atak, Grey prediction with rolling mechanism for electricity demand forecasting of Turkey, Energy 32 (9) (2007), pp. 1670–1675. Article | PDF (153 K) | View Record in Scopus | Cited By in Scopus (11)

[46] Yumurtaci Z, Asmaz E. Electric energy demand of Turkey for the year 2050. In: Energy Sources, Part A: Recovery, Utilization, and Environmental Effects, 1556–7230, 2004;26(12):1157–64.