Turkish spot soars as outages ordered across the country

Aura Sabadus

22-Dec-2016

The Turkish power spot price soared to near-record levels on Thursday, as brownouts were implemented for several hours on a rotating basis due to a shortage of natural gas.

Despite the crisis, described by traders as ‘one of Turkey’s worst’, there is currently no public information regarding gas consumption, pipeline and LNG imports, system balance or storage levels.

Gas incumbent BOTAS has not responded to information requests from ICIS, but market sources contributed information to help piece together the current supply-demand picture.

Electricity price surge

The Friday Baseload electricity price soared to TL586.56/MWh (€159.85/MWh) on the exchange EPIAS, TL100.00/MWh less than the all-time high recorded on 14 February 2012.

The average December delivery price to date is TL224.41/MWh, TL63.16/MWh higher than the market’s forward expectations.

There were hardly any price quotations on the over-the-counter market, as trading stopped across all broker screens.

“This is killing my business,” a trader said on Thursday.

Other traders echoed the view, noting that current bullish prices could lead to a spate of bankruptcies in the new year, as many cannot afford to buy at these levels.

A government source told ICIS that temporary power outages were implemented for an average of two hours across the country.

A market source noted that in some parts of the southwestern Toroslar region, outages of up to eight hours were expected, according to the website of the local power distribution company.

All public and private gas-fired plants were ordered by the transmission system operator BOTAS to reduce gas consumption by 90% from Thursday morning.

Peak consumption at 12:00 Istanbul time stood at 41.352MW, according to the source. A total 3.58GW of gas-fired capacity was in operation, although some of that was running on secondary fuels.

The country’s total installed gas-fired capacity stood at 22.5GW at the end of November.

Import options

The market source said export capacity from Bulgaria and Greece was increased by 200MW to 850MW.

The electricity market is tight in these markets due to high consumption and supply concerns linked to low regional hydro production.

A local trader said Bulgaria was exporting to Turkey at the maximum possible capacity, currently 432MW. Greece was also exporting to Turkey, but at more moderate levels, traders said, due to high local demand.

Gas shortage

The tightness is reportedly caused by soaring household gas consumption, which on Wednesday exceeded 140 million cubic metres (mcm), nearly 70% of the total demand. This information was not be officially confirmed.

Linepack levels were thought to be around 340mcm, which a source described as within normal levels. Linepack is a procedure whereby the transmission system operator squeezes more gas into the system that can be withdrawn at a later stage. This means the system is effectively used as storage.

“Because BOTAS issued a curtailment order to power plants some ten days ago, linepack levels are pretty good at the moment,” a shipper said.

There are five LNG cargoes expected to reach Turkey between 22 December and 3 January, according to ICIS LNG Edge. aura.sabadus@icis.com





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