Maximizing exploitation of domestic primary energy resources and securing sufficient, reliable and affordable energy to a growing economy in an environmentally sustainable manner has been, and remains, the Turkish government’s core energy policy priority.
Besides the enhanced regulatory framework by the Turkish government over the last decade, exploration activities conducted by the Mineral Research and Exploration General Directorate (MTA) have been a critical driver behind geothermal development in Turkey. MTA was until 2007 responsible for the exploration and mapping of geothermal resources in Turkey and has traditionally been the main institution advancing the development of geothermal utilization. Out of a total of 190 geothermal sites discovered, MTA prioritized 25 sites which were considered suitable for electricity production. At the end of February 2018, geothermal generation capacity in the country had reached a total of 1,064 MW. All current installations are located in the Aydin, Denizli and Manisa provinces. Most of these sites were initially explored by MTA after which the resource risk was largely mitigated with additional drilling. As of 2007, MTA no longer has the required resources or the mandate to undertake extensive geothermal exploration drilling. Moreover, 72% of 1,799 active geothermal exploration licenses have been issued to the private sector with no substantial increase in exploration activities. The significant slowdown in new geothermal exploration activities is primarily due to the high risk of exploration drilling being shifted from the MTA onto the private investor. This situation is further compounded when commercial debt is generally not available to the private investor until the geothermal resource has been validated through exploratory drilling.
The RSM aims to facilitate private sector investment in geothermal exploration projects in Turkey. The program consists of a mechanism through which the developer’s exploratory drilling cost is substantially reduced in the event of an exploratory drilling failure.