Evaluation of reform in Turkish electricity sector :A CGE analysis

Abstract

Turkey's electricity market has undergone extensive reform since 2001 through market liberalization unbundling privatization and establishment of organized power markets retail market opening and the establishment of an independent energy regulatory authority. i employ a static computable general equilibrium (CGE) model to test the impact of power sector reform on the economy. Major findings suggest reform has been beneficial to the economy. Market liberalization has a positive impact on gross domestic product when implemented on all state-run companies simultaneously. Stronger participation of state-run companies in the day-ahead market generates a positive effect on the economy similar to that of larger private participation in the sector with the GDP turning around 0.2-0.3% above its base levels after each shock. Stronger demand-side participation also affects the economy positively. A simulation of all reform elements combined generates a deviation of GDP by 0.2% above its baseline.