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

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.