Electricity, Gas, Steam and Air Conditioning Supply industry

Industry definition

Within the Electricity, Gas, Steam and Air Conditioning Supply industry, Division 35 includes all generation of bulk electric power, transmission from generating facilities to distribution centres and distribution to end users. This includes operation of generation facilities that produce electric energy; including thermal, nuclear, hydroelectric, gas turbine, diesel and renewable but production of electricity through incineration of waste. Operation of transmission systems that convey the electricity from the generation facility to the distribution system, operation of distribution systems (i.e., consisting of lines, poles, meters, and wiring) that convey electric power received from the generation facility or the transmission system to the final consumer, and; sale of electricity to the user, activities of electric power brokers or agents that arrange the sale of electricity via power distribution systems operated by others, and operation of electricity and transmission capacity exchanges for electric power are all included within the  industry. 

This industry  also includes the manufacture of gas and the distribution of natural or synthetic gas to the consumer through a system of mains. Gas marketers or brokers, which arrange the sale of natural gas over distribution systems operated by others, are included but separate operation of gas pipelines, typically done over long distances, connecting producers with distributors of gas, or between urban centres, is excluded from this group and classified with other pipeline transport activities. Production of gas for the purpose of gas supply by carbonation of coal, from by-products of agriculture or from waste and manufacture of gaseous fuels with a specified calorific value, by purification, blending and other processes from gases of various types including natural gas are within the activity area of the industry but  production of crude natural gas, operation of coke ovens, manufacture of refined petroleum products, and manufacture of industrial gases are excluded. Distribution and supply of gaseous fuels of all kinds through a system of mains. sale of gas to the user through main, activities of gas brokers or agents that arrange the sale of gas over gas distribution systems operated by others, and commodity and transport capacity exchanges for gaseous fuels but wholesale of gaseous fuels, retail sale of bottled gas, direct selling of fuel, are activities of the industry. 

Key industry statistics

As the current state of the Turkish economy is at expansion stage on the business cycle, TurkAnalitik expects that the Electricity, Gas, Steam and Air Conditioning Supply industry is experiencing high levels of demand for its products as the continuing economic growth is keeping the demand for industry's products increasingly high. Enterprises in the industry are increasing their output. It is also expected that existing businesses increase their spending on new capital expenditure as a natural consequence of this. Due to the level of business activity during an expansion, employment levels are also high in the industry. This is making it more difficult for enterprises to attract and employ qualified staff.   

Total consumption of electricity in Turkey between 2010 and 2017 increased about 37 per cent reaching to 290 million MWh whilst the total consumption of natural gas increased about 43 per cent in the same period reaching to about 53.5 billion m3. The large and continuing growth rates in consumption of electricity, natural gas, and other gaseous sources have been a function of consumer demand in both industrial production and household consumption in Turkey.

The Electricity, Gas, Steam and Air Conditioning Supply industry is the fifth largest industry in Turkish economy (except Agriculture and Financial Services industries) in terms of industry's share of turnover. In 2017, the industry generated about 220 billion TL in turnover. The industry makes a major contribution to the overall performance of the Turkish economy. The industry’s total output (value added at factor costs) in 2017, from 4,161 enterprises and about 113,762 persons employed was over 39 billion TL.

Industry outlook

This section considers the factors which affect the environment in which the wholesale and retail trades operate. As capital intensive industries, they are vulnerable to macroeconomic landscape in particularly the availability of finance. Faced with cost pressures and consumer resistance to increased prices, the electricity wholesale and retail trade sectors need to rely on some combination of cost containment and/or increased productivity to maintain or improve profitability. The changes affecting the sector derive from diverse sources such as technological advances, privatization, and macroeconomic landscape and, importantly, striking changes in consumers’ incomes, lifestyles and preferences.  

Electrification, decentralization and digitalization have been converging to create a smarter and more connected electric system in the industry. Distributed systems have made the electricity grid in the industry moderating the daily peak demand problem. The players in the electricity sector widely incorporated the concept of smart grids and the accompanying new business models in its business processes, which resulted in increasing efficiencies.