How will political unrest such as Turkey’s attempted coup impact its renewable marketplace?

Earlier this year, Turkish officials were lauded for their Renewable Energy Action Plan, which sets the ambitious goal of 61GW (or roughly 30% of demand) of renewable energy by 2023. However, earlier this month, Turkish officials were sent scrambling when a failed military coup left hundreds dead and thousands detained. While leadership has retained control, many outsiders now see the country as unstable, casting doubt on their ability to meet their lofty renewable energy goals.

Historically, political instability has been a dubious foundation for a renewable energy market. However, as the framework for renewable energy markets have gotten stronger and more self-sustaining, bureaucratic unrest is no longer a death sentence.  

As recently as 2012, political turmoil in Israel (an eternally unstable region) was viewed as an impossible hurdle for emerging renewable markets. But the renewable landscape is changing quickly– government subsidies are becoming less and less critical to the survival of these industries. We see this in the US, with the solar ITC being phased out in the coming years.    

This idea was raised as early as 2014 when energy experts in Egypt, then going through trying times themselves, claimed that their political problems would not impact investments in renewable markets. This was based largely off of the idea that, absent government subsidies, customers wanted to pay renewable rates. They then argued that the market had reached a point where it was competitive under it’s own merits. If the demand is there, the industry will always flourish.

Going back to Israel, anyone with a basic knowledge of world events can tell you that they remain as conflict-torn today as they have for the past 70 years. Despite this instability, renewable markets have taken root. Were they wrong in 2012? Not exactly– the politics have not changed, but the renewable market has. The framework for renewable industries is no longer a house of cards, and it can often survive an unstable bedrock, just as the traditional energy industry can.

A recent assessment by PV Magazine agrees, saying that the attempted coup in Turkey shouldn’t impact solar financing. The country has an energy demand and excellent renewable resources, which are not dependent on the political situation. To quote the article, “If the sun shines in a real democracy, this is even better. Investors will likely remain in Turkey whatever happens, however.”

In most countries with emerging renewable markets, energy is not a luxury. Rather, it is a necessity of modern life. Even in heavy turmoil, a modern nation will not falter in its hunger for energy. The question has been and still is whether renewable energy is a luxury. While the answer has historically been “yes”, this is shifting. In a short history lesson, we’ve seen renewable markets worldwide go from houses of cards to a houses of, well, wood (if not yet bricks).

As renewables get more competitive in the general energy marketplace, they are less at risk is tumultuous areas. This is not to say that investments in general are less risky in troubled regions. While Turkish renewable investments may not be at risk by virtue of being renewable, they are higher risk by virtue of being in a rocky economy. For this reason, foreign investors and asset owners must have a firm grasp of externalities. Having a clear view of pipeline development is key, and strong investment lifecycle management tools will help projects attract funding and stay under control, despite murky waters.