Energy transition and the external balance: The net currency effect and payback period of renewable electricity generation in Türkiye, 2018-2026

Abstract

Renewable electricity generation is widely described as a source of foreign exchange savings, yet the claim has not been converted into a monetary magnitude for Türkiye, and the currency outflow generated by imported equipment is routinely left out of the calculation. This study measures the net effect of renewable generation on the external balance by constructing a physical counterfactual rather than estimating an elasticity. For each of the 101 months between January 2018 and May 2026, the volume of natural gas and imported coal displaced by incremental renewable generation is computed from plant thermal efficiencies and fuel calorific values, then valued at monthly import unit prices. Equipment imports required for capacity installation are deducted, and the month in which the cumulative net balance first turns positive is defined as the foreign exchange payback period. Incremental generation reached 234.8 TWh and displaced 15.7 billion dollars of fuel imports, while net equipment outflows amounted to 11.6 billion dollars, leaving a cumulative net effect of 4.1 billion dollars. The balance crossed zero in February 2024, implying a payback period of 6.1 years. The marginal plant assumption on which the accounting rests is tested econometrically: one additional gigawatt-hour of renewable generation reduces gas-fired generation by 0.742 and imported-coal generation by 0.141 gigawatt-hours, and the implied marginal gas share of 0.840 does not differ statistically from the assumed 0.80. The sign is unchanged across the physical, substitution and price scenarios examined, within which the cumulative net effect ranges from 2.3 to 5.9 billion dollars and the payback period from 4.5 to 7.2 years. The cumulative saving corresponds to roughly three per cent of the energy import bill on average, rising to close to six per cent in the most recent twelve months.

Keywords

• Energy transition
• Foreign exchange savings
• Energy imports
• Current account
• Payback period

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