GLOBAL ENERGY OUTLOOK WEO 2020 and TÜRKİYE

ONLINE

3 NOVEMBER 2020

Mr. Fatih Birol, President of the International Energy Agency,

Our Esteemed Committee Members,

Esteemed Participants,

I say welcome to our meeting, organized by our MÜSİAD Mining, Energy Management and Investments Committee, and I respectfully greet you all.

Esteemed Participants,

According to the World Energy Outlook report published by the International Energy Agency (IEA), the decline in energy demand caused by the coronavirus pandemic is expected to overshadow the crisis of 2008.

While energy demand is estimated to fall by 6 percent in 2020, this figure is 7 times the decline experienced after the crisis of 2008.

In other words, this decline is equivalent to the entire energy demand of India, the world's third largest energy consumer.

When the sources of the energy consumed are examined, we see that the absolute dominance of the trio of oil, natural gas and coal continues.

On the other hand, in the general framework, while the share of nuclear energy is decreasing, a significant increase is striking in the use of renewable energy sources.

Renewable energy, which in 2019 surpassed the figures for electricity generation from coal for the first time, is expected to reach a share of 40 percent in electricity generation in 2020.

According to the International Energy Agency, renewable energy will be the only energy source that will grow in 2020.

The share of coal and natural gas in global energy production, on the other hand, is expected to fall to levels not seen since 2001.

While solar, wind and geothermal energy sources are expected to grow by an annual average of %6.6 until 2045, it is estimated that renewable energy sources will leave all energy sources behind in terms of rate of increase.

The share of renewable energy sources, which provided %2.1 of global energy in 2019, is expected to rise to %8.7 in 2045.

As Türkiye, with the investments we make in the field of renewable energy, we are working to be an important actor in this increase.

Esteemed Participants,

According to estimates, global energy demand will show an increase of %50 in 2050 compared with 2018. It is foreseen that the main source of this enormous increase will be the countries outside the OECD members.

The question of by what means the demand that will be created when the strong economic growth trend in these countries combines with the rising population should be met stands out today as a question that needs to be answered.

According to OPEC's 2020 Annual Report, on the other hand, oil will continue to remain the largest energy source until 2045.

Türkiye, partly owing to being a developing economy, is a country that is growing faster than the world average.

Energy consumption is also rising steadily in parallel with this trend. Türkiye's total energy consumption, which was the equivalent of 73.5 million tons of oil in the year 2000, had by the end of 2018 more than doubled in volume, rising to 154 million tons.

When the annual changes in energy consumption are examined, an average growth of %4.4 in the 2000-2018 period is striking. This rapid growth also causes Türkiye's share of total global energy consumption to increase.

For Türkiye, whose external dependence in the matter of energy sources has historically run high, the energy demand brought about by the growth trend is among the heaviest burdens in its foreign trade items.

For Türkiye, in which approximately %75 of primary energy consumption is imported, growth means energy demand, and energy demand means foreign trade and a current account deficit. For this reason, the risks that affect or that have the possibility of affecting global

energy prices have a significant impact on the country's financial assets and its general fragility.

As you know, Türkiye pays an annual average of USD 12-13 billion for natural gas.

The good news of 320 billion cubic metres and subsequently of 85 billion cubic metres of natural gas given by our President Mr. Recep Tayyip Erdoğan is expected to offer Türkiye significant gains in terms of energy independence.

When the amount consumed annually is taken into consideration, the discovery in question, which is large enough to meet Türkiye's natural gas consumption for 9-10 years, is expected to play a very important role in the financing of Türkiye's current account deficit.

Türkiye ranks 19th in the world in the ranking of renewable energy investments, with the investment of more than USD 2 billion that it made in 2018.

When we take into account that our investments in this field are increasing day by day, we can say that in the near future our country will rise to far higher places in renewable energy investments.

While the investments made in the field of renewable energy are increasing, it is also a duty of ours to raise its recognition and to ensure that our investors turn towards this field.

We, as MÜSİAD, act in awareness of our responsibility in this regard.

Together with our members, as much as the importance and the investment we give to renewable energy sources, we also attach importance to and follow battery technology, carbon capture and storage technology and hydrogen technology, which are described as the energy sources of the future.

On this occasion, I congratulate MÜSİAD members on their sensitivity and their success in this matter, and I offer them my thanks.

I should like to state that we, as MÜSİAD, will not hesitate to put our shoulder to the wheel when it comes to increasing renewable energy investments, which are among the future goals of many countries in the field of energy.

Esteemed Participants,

As I complete my words, I hope that this fine meeting, at which we have addressed in detail the subject of energy, one of the strategic sectors for our country, will prove extremely fruitful.

I thank everyone who has laboured for it, above all the chairman of our MÜSİAD Energy Management and Investments Committee, Cihad Terzioğlu.

Abdurrahman Kaan

President of MÜSİAD