R&D expenditures in liberalized electricity markets: The case of Turkey

2The views expressed here are those of the authors and do not necessarily represent Energy Market Regulatory Authority.Current problems in the electricity sector require deployment of new technologies which are the outcome of research and development (R&D) mostly. On the other hand, figures show that government energy R&D expenditures have declined in many developed countries which mostly resulted from liberalization and restructuring. Moreover, studies indicate that private energy R&D expenditures have also been affected by the reform process. As a result, there are concerns about the declines in government and private energy R&D expenditures which may hamper the deployment of sustainable energy technologies. Similar to other countries, Turkey has initiated electricity market reforms, and it has been trying to establish a competitive electricity market since 2001. Moreover, it has increased its efforts to develop domestic low-carbon energy technologies. An assessment of the relation between R&D expenditures and liberalization in the Turkish power market shows that market reforms have created new demand and opportunities for equipment manufacturers, and there have been an increase in R&D expenditures performed by these companies. On the other hand, power companies have mostly refrained from performing R&D expenditures due to their perception of R&D expenditures as unnecessary as well as insufficient incentives, lack of funds and uncertainties stemming from liberalized market framework.