The year 2020 was defined by the effects of the COVID-19 pandemic, which affected the entire world and caused radical economic, social and political changes. Affecting many sectors and countries in a short period, the pandemic created a great deal of uncertainties for both the Turkish and global economies. The preventive measures and restrictions imposed by the countries due to the pandemic led to a decline in production and employment in many sectors and caused a global recession.
To mitigate the negative effects of the pandemic, governments implemented conventional and unconventional expansionary fiscal and monetary policies such as direct cash support, credit support and tax deferrals. According to the IMF, the ratio of financial support to national product in 2020 was 24% in developed countries, and 6% in developing and middle-income countries. Despite these supportive policies, all economies contracted significantly in the second quarter of the year. The OECD changed its 2020 contraction forecast for the global economy to 4.2%. For the years 2021 and 2020, the OECD anticipates that the global economy will grow by 4.2% and 3.7%, respectively, in line with the increasing availability of the vaccines and stimulus packages.
With the first cases observed in March, Turkey was not significantly affected by the pandemic in the first quarter of the year, recording a 4.5% growth yoy. After contracting by 9.9% in the second quarter due to the pandemic-induced global economic crisis, the Turkish economy grew by 6.7% in the third quarter, ranking as the second country in Europe in terms of economic growth.
The recent economic decisions and the steps taken in regards to the monetary policy and the banking sector, particularly those taken by the Central Bank, led to a decrease in the country’s risk premium, and thus long-term interest rates. Accordingly, it is estimated that the growth in 2021 will reach 5% provided that there are no major unexpected shocks, while the growth expectation for 2022 is set at 4.5%. The Turkish economy is expected to reach its true growth potential of 4% in 2023 and beyond.
As in every other sector, the COVID-19 outbreak created major consequences for the global energy sector. The preventive measures taken to slow the spread of the pandemic have had a significant impact on energy demand, the likes of which have not been seen in 70 years.
The decline in demand for chemicals and refined products, triggered by the industrial recession and travel restrictions, caused an imbalanced supply/demand for oil. The demand for electricity has also declined significantly due to the industrial recession, as well as restrictions and social isolation.
The pandemic has highlighted the importance of reliable and sustainable energy sources. These developments have triggered a worldwide green transformation. With the effects of the pandemic, the carbon emission rates in 2020 showed the biggest decline since the World War II. The issues of CO2 emissions and combating climate change will remain on the agenda for some time to come. Although the fossil fuels are expected to maintain their dominance for the foreseeable future, efforts to minimize their damage to the planet will intensify, and government policies and incentives will be shaped accordingly.
Thanks to its investments in renewable energy in recent years, Turkey supplied 41% of its total electricity generation from renewable energy sources in 2020. While almost all of the 4,853 MW of new installed capacity commissioned during the year came from the renewable energy sources, this amount surpassed the total installed renewable capacity of 20 countries in Europe.
With increasing demand for “cleaner” energy sources, the nationalization of technologies used in renewable energy investments remains a hot topic.
As Zorlu Enerji, we continued to focus on renewable energy in 2020. The share of renewable energy in our total installed capacity has increased regularly in recent years, thanks, in particular, to our investments in geothermal energy.
As of the end of 2020, 62% of our 991 MW of total installed capacity comes from renewable energy sources.
As one of Turkey’s renewable energy pioneers, we completed another investment in 2020.
In line with our goal of consolidating and diversifying our investments in clean solar energy, we commissioned the 2 MW Dead Sea Solar Power Plant, which was built in Jericho, Palestine by ZJ Strong Energy For Renewable Energy Ltd. Co. in which Zorlu Enerji has a 75% stake.
While continuing our operations with the awareness of our environmental and social responsibilities, and with the vision of becoming the energy company of the future, sustainability continues to top our agenda. We carry out all our activities in line with the UN Sustainable Development Goals, and under Zorlu Holding’s “Smart Life 2030” motto and focus on sustainability.
As a company that adapts rapidly to technological developments, we endeavor to provide “sustainable solutions” based on the future welfare of people, the society and the entire planet.
With the investments we undertake in Smart Systems to provide the latest technologies for our country, our activities in the field of digitalization, R&D and innovation continue at full steam.
With our ZES brand, we continue to expand our national EV charging station network in an effort to contribute to the widespread use of electric vehicles. To carry our projects and activities in this field to the European Union and neighboring countries, we founded ZES B.V. under 100% ownership of Zorlu Enerji in the Netherlands in 2020.
In line with our sustainability-oriented change and transformation movement, we propelled our sustainability efforts to the next level in 2020 by becoming a signatory to the United Nations Global Compact, which guides our principles and operations. As a signatory to the UN Global Compact, we are part of the world’s largest corporate sustainability initiative, and we continue our activities in line with the principles that address the fundamental responsibilities of the business world in the fields of human rights, labor standards, environment and anti-corruption. Gender equality and equal opportunity form the basis of our management understanding with respect for employee and human rights.
Operating in the energy sector, we have been at the forefront of the pandemic that has affected our country and the entire world, right behind healthcare professionals. With an awareness of its social responsibilities, Zorlu Enerji has worked to provide continuous energy for our country during a challenging year defined by the pandemic.
As we continue our activities in the field of renewable energy in 2021, we will continue to grow with firm steps while representing our country with our expertise and know-how with our investments abroad.
We prioritize carrying out environmentally-friendly operations that benefit human life in line with our goal of becoming the energy company of the future, as we enrich our national economy and the energy sector with value-added projects.
I would like to take this opportunity to express my gratitude and wish a healthy year to all Zorlu Enerji employees working diligently under difficult circumstances; to our shareholders, who provide us an ever-increasing support; and to all our business partners and stakeholders.