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Energy market reforms in Turkey: An economic analysis

Erdogdu, Erkan (2005): Energy market reforms in Turkey: An economic analysis.

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Abstract

In the early 2000s, the Republic of Turkey has initiated an ambitious reform program in the most important segments of her energy market; namely, electricity, natural gas, petroleum and liquefied petroleum gas industries, which requires privatization, liberalization as well as a radical restructuring of these industries. However, there is no consensus that the measures introduced are optimal. The present dissertation attempts to answer, first, whether or not recently introduced energy market reforms in Turkey are optimal from an economic perspective to ensure a fully functioning energy market; and second, what still needs to be done to improve them. The dissertation not only provides an economic analysis of these reforms but also lists some policy suggestions with crucial importance. Since the rapid electricity demand growth is the most contentious reason behind the recent reforms; the dissertation specifically focuses on the issue by both providing an electricity demand estimation and forecast, and comparing the results with official projections. The study concludes that despite relatively good legislative framework, in practice, the reforms in Turkey are far from ideal as they are mainly in the form of "textbook reforms"; and therefore a significant amount of work still lies ahead of Turkey to set up a fully-fledged energy market.

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