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Message from the CEO
In parallel with the ongoing global economic turmoil, 2014 was a difficult year for developing countries, and Turkey in particular. Fluctuating exchange rates, natural gas cuts and current subsidies, as well as the common occurrence of adverse factors such as drought and falling electricity demand, have all impacted the energy sector adversely. This has placed the power plants, which have just completed their investment and bear a huge debt repayment burden, in a difficult position.
As economic activity, a key determinant in electricity demand, lost impetus, it also exerted downward pressure on prices in 2014. The surplus resulting from high capacity investments that became operational emerges as one of the factors affecting the investment plans of sector players.
The energy sector was heavily influenced by changes in exchange rates in 2014, due to the fact that the majority of investments are based on imported technologies, loans are borrowed in foreign currency, and sales incomes are in TL. Moreover, the exchange rate sensitivity of the energy sector was further exacerbated by the higher than expected fluctuations in foreign currency, and alterations in the FED’s bond tapering policies throughout the year.
The amount of power generation obtained from hydroelectric power plants demonstrated a considerable slump Turkey-wide, on the back of above the norm 2014 seasonal temperatures and inadequate precipitation.
In spite of these adverse conditions over the previous year, the industry’s contribution to economic growth will be a determinant for the electricity sector in 2015. Turkey still maintains its potential in demand owing to its dynamic structure, which has not yet reached the level of OECD and EU economies, in electricity consumption per capita.
In order to sustain its robust position in the sector, and to stabilize its electricity supply, Akenerji aims to maintain a balanced portfolio structure. Within this scope, Erzin Natural Gas Combined Cycle Power Plant, with a total capacity of 904 MW, construction of which was commenced by the end of 2011 in Hatay, was completed and became operational in Q3 2014. With annual generation capacity of 7.4 TWh, Egemer is one of the key projects of the Akkök-CEZ strategic partnership. Akenerji created a huge resource towards meeting Turkey’s power need after Erzin Natural Gas Combined Cycle Power Plant, the biggest one-off investment by our company to date, became operational. Akenerji doubled its installed power with a major investment, and disabled its lower-efficient power plants such as Kemalpaşa and Bozüyük, in light of current market conditions.
Akenerji’s transaction volume in bulk electricity trade grew by 1.5 TWh compared to 2013, reaching 9.1 TWh, and our Company consolidated its leading position in 2014.
Project design works for Kemah Hydroelectricity Power Plant, planned for Erzincan, with a capacity of 198 MW, continue. Kemah is also Akenerji’s biggest renewable resource investment.
While it is envisaged that 2015 will be a challenging year for Turkey and the global economy, Akenerji will efficiently conduct the optimization operations that it started in 2014, and risk management in order to work more effectively. This will help to adapt easily to the changing conditions with its rising trade volume and costs appropriate for the current competitive conditions.
EPİAŞ, which is slated to become operational in 2015, will be one of the flagships of the electricity market by enhancing both transparency and liquidity. As one of the Group C stakeholders of EPİAŞ, Akenerji will reinforce its presence in the Turkish electricity market.
Akenerji’s expert staff recognizes the sectors in which its customers operate, understands their needs, and offers the most innovative and appropriate products and services, with the right analyses and strategies. As well as new power generation plants, we aim to boost sales volume in 2015, and consolidate our leading position in the power sector, within the scope of purchase agreements signed with various power companies. As a Company, we updated our Sales and Marketing strategy, and developed our processes in accordance with intensifying competition, and abruptly changing market conditions. We designed new products and services oriented to economic and correct energy consumption, thanks to our Smart Electricity approach. Accordingly, Akenerji aspires to build up the profitability of our customers by reducing their energy consumption costs, which makes up a major part of their expenses.
Akenerji commenced agency selection and development works by creating an agency network infrastructure in order to reach more loyal and profitable customers, and to expand the market share.
As of end 2014, we crowned the sustainability of our certifications obtained for Ayyıldız, Uluabat, Akocak, Burç, Bulam and Feke II with zero non-compliance in external audit, within the scope of ISO 9001, ISO 14001, OHSAS 18001 Management Systems. Moreover, our Feke I, Himmetli and Gökkaya Hydroelectricity Power Plants were included in the certification.
For the last two years, we have published our practices and performance in the environmental, social, ethical and economic areas as a Sustainability Report, as per the Global Reporting Initiative, within the scope of sustainability.
Akenerji supports its customers’ sustainability activities, thanks to its Carbon Neutral Electricity product, with which it presents emission reduction certifications zeroing carbon footprints occurring through electricity usage.
Participating voluntarily in Turkey’s report in the Carbon Disclosure Project since 2011, we report our climate strategy and carbon emission performance to international investors.
Our company continued its social responsibility projects in 2014, throughout all the regions it operates in. In order to provide information about hydroelectric power plants, and to answer locals’ questions about the possible dangers, meetings were organized in Trabzon and Adıyaman, and a total of 673 students and 38 teachers were helped to understand the issue.
At Akenerji, we will continue our social responsibility and informative engagements in 2015 to the same high standards we maintained in 2014.
I express my sincere gratitude to all of our employees, who endeavor with determination, discipline and self-devotion throughout the year, in the face of challenging market conditions. Akenerji will continue to consider innovative and profitable investment options in 2015, and to reinforce its reliable, leadership position in the industry by enhancing its competitive edge at every step of the way. I would also like to thank all our shareholders, suppliers, customers, financers and social stakeholders, who encourage and motivate us greatly in this journey with their support and commitment.
Ahmet Ümit Danışman