ESCON Report: Turkish industry invests in clean energy but cannot reduce its consumption

According to the second ‘Energy Efficiency Report of Turkish Industry’ published by ESCON Energy, Turkey’s first and only global energy service company, industrial enterprises cannot use their energy efficiency potential sufficiently, that is, they cannot reduce their energy consumption. According to the report, in which 411 factories and 23 commercial buildings from a total of 14 sectors in 51 cities of Turkey were examined, the energy efficiency potential in the Turkish industry is 32 percent. 185 of the enterprises examined in the report are in the ISO 500, and 69 are in the 2021 list of the ISO Second 500.

Onur Ünlü, CEO of ESCON Energy, said that investments aimed at using clean resources in energy and reducing costs are increasing and said, “However, these investments are currently mainly made in the field of renewable energy. This reduces the energy cost of businesses and provides a clean energy source, but does not change the amount of energy used. However, in order to reduce the amount of energy used by our industry, it must first make energy efficiency investments. Because, with investments to be made within the scope of energy efficiency, it is possible to reduce energy consumption by 20 to 50 percent, depending on the type and scope of the application,” he said.

Energy, which is the source of 75 percent of global greenhouse gas emissions; Along with the effects of climate change and the supply, security and cost problems experienced around the world, it has become one of the priority agenda items of both countries and companies. In solving these problems in energy, energy efficiency, which enables the recovery of waste heat, modernization and automation of energy-consuming systems such as cooling, air conditioning, pumps and fans, and reducing energy consumption, plays a critical role. So much so that it is predicted that 40 percent of the emission reduction needed by 2040 will come from energy efficiency. ESCON Energy, which prepared the ‘Energy Efficiency Report of Turkish Industry’, a first in Turkey in 2021, to measure the energy efficiency in the industry, where approximately one-third of the energy consumed in Turkey is used, and to reveal the potential in this field, published its second report in this field. The report, in which 411 factories and 23 commercial buildings in 14 sectors were examined, also included the results of the studies carried out within the scope of Energy Performance Contracts, which provide financing for efficiency investments. 185 of these enterprises, which continue their operations in 51 cities, are on the ISO 500 list, and 69 are on the ISO Second 500 list for 2021.

Average breakeven period is 2.7 years

According to studies conducted in a total of 434 enterprises, including factories and commercial enterprises, the annual energy consumption of these enterprises was 6.92 million TOE, while the average energy efficiency potential was measured as 32 percent. The average payback period of energy efficiency projects is 2.7 years, and the emission reduction that can be achieved by implementing these projects is determined as 1.2 million tons of carbon dioxide.

Onur Ünlü: “Energy consumption can be reduced by up to 50 percent with efficiency work”

Evaluating the report, ESCON Energy CEO Onur Ünlü stated that awareness in the field of energy efficiency has increased, but investments are mostly made in renewable energy, and said: “However, energy efficiency and renewable energy investments are different issues. When a renewable energy investment is made in a business, the source of the consumed energy changes. For example, while fossil fuel was previously used, with this investment energy is now provided from a clean source such as the sun. However, although this reduces the energy cost of the business and provides a clean energy source, it does not change the amount of energy used, that is, the same amount of energy is consumed. However, first it is necessary to reduce energy consumption. Because, with investments in energy efficiency, it is possible to reduce energy consumption by 20 to 50 percent, depending on the type and scope of the application. For this reason, we recommend that businesses reduce their energy consumption by investing primarily in energy efficiency, and then supply this reduced electricity use from renewable energy sources. “Thus, the cost of renewable energy investment can be significantly reduced,” he said.

“Our export markets, the EU and the USA, focused on energy efficiency”

Pointing out that reducing energy consumption is of critical importance for Turkish companies to be competitive, especially in trade with the EU, Ünlü said, “Energy efficiency is at the center of the policies implemented all over the world in the transition to a carbon neutral economy. The EU’s target of reducing energy consumption by 11.7 percent by 2030 and the USA’s allocation of a budget of 900 billion dollars for energy efficiency and energy transformation also show this. Therefore, providing energy from clean sources is very important but not sufficient. In order to take part in export markets and contribute to resource efficiency and circular economy, it is necessary to reduce consumption by ensuring energy efficiency. Otherwise, we may lose our competitiveness. In fact, Türkiye, according to 2022 data It has the highest energy efficiency rate in the world with 2.7 percent, but according to 2021 Eurostat data, our energy intensity is approximately 28 percent higher than EU countries. This shows the abundance of our energy-intensive sectors. Energy intensity can only be reduced through energy efficiency studies. “Especially when we consider the Border Carbon Adjustment Mechanism, which started to be implemented as of October 1, the importance of energy efficiency for trade becomes clearer,” he said.

The highest improvement in food, the greatest potential in commercial buildings

In the Energy Efficiency Report of Turkish Industry, ‘Packaging – Plastic’, ‘Base Metal’, ‘White Goods’, ‘Glass’, ‘Cement’, ‘Food,’ ‘Pharmaceutical’, ‘Paper’, ‘Chemistry & Petrochemical’, ‘ 13 industrial sectors including ‘Forest Products’, ‘Automotive’, ‘Ceramics’, ‘Textile’ and ‘Commercial Buildings’ were examined. Accordingly, the food sector showed the biggest improvement in energy efficiency in the last two years. The savings potential in this sector in 2021 was 44.7 percent. With the studies carried out, as energy efficiency increased, the saving potential was reduced to 39 percent. In the paper industry, it decreased from 45.07 percent to 40.2 percent, and in pharmaceuticals, it decreased from 22.5 percent to 19.2 percent. Commercial buildings, on the other hand, reached 67.4 percent with a change of 0.1 percent, becoming the sector with the highest energy efficiency potential among 14 sectors.

7 thousand tons of emission reduction and 2 million dollars of savings per year without spending a penny of capital

The report also included the studies carried out within the scope of Energy Performance Contracts (EPS), which are considered the ‘most creative financing solution’ in the field of energy efficiency and enable investment in this field without spending a penny from the company’s capital. One of the examples in the report was the work carried out in a factory among the top 10 companies in the ISO 500, covering efficiency increase, waste heat recovery, revision of cooling systems and optimization of air handling units. Accordingly, the factory reduced emissions by approximately 7 thousand tons in one year and saved 2,911 TOE of energy, equivalent to approximately 2 million dollars.