Fatih Yücelik, Chairman of the Board of Directors of TÜRKÇİMENTO, Appears as a Guest Live on Bloomberg HT

Fatih Yücelik, Chairman of the Board of Directors of TÜRKÇİMENTO, appeared as a guest of Zeliha Saraç  in the “60 Dakika (60 Minutes)” show aired live on Bloomberg HT TV. In the show where the global energy crisis experienced recently was discussed, Yücelik shared the causes of the energy crisis and his forecasts on the issue.

In his statement upon Saraç ’s question “What has caused the energy crisis experienced on a global scale and how was your sector affected from it?” Yücelik said the following: “As this year was hotter and drier than expected in China, a colossal rise in energy consumption was experienced. Naturally, it brought along the need for coal in thermal power plants, as China is a country dependent on coal at a ratio of approximately 55-60% in its national energy needs. Even though it is among the richest countries when it comes to coal reserves, China is the first country in global carbon emissions at a ratio of approximately 27%. Nevertheless, an increase, compared to 2019 figures, was observed in China in 2020 but coal production could not be carried out to fulfill the energy needs. Moreover, when also the restrictions brought by the regulations became in question, the coal supply was unable to meet the demand.

Upon China’s switch to coal imports, the wick of the increase in global coal prices had already been ignited. Upon that, the decline in production in some coal-producing countries like Russia and South Africa caused the crisis in the coal markets to slump to these levels.

This time, The rise in coal prices and the fact that supply was insufficient caused many countries, particularly once again China, to steer themselves to natural gas. In addition to the rise in demand, with the decrease of the gas coming from Russia and with the fact that the natural gas stocks in Europe saw lowest levels in the last 10 years, the price of natural gas in forward contracts in Europe has increased by nearly seven times in the last year. This situation increased the electricity prices in Europe much more than expected and also caused the power plants producing with natural gas to create additional coal demand.

Price increases on both the coal and natural gas side this time caused the demand oriented to consumption to switch to oil. OPEC’s highlight that the demand will be higher than the supply until the end of the year and its statement that it will be below the daily oil production needed in 2022 have increased the oil prices above US$80. On the other hand, the US refineries’ suffering from the impact of the hurricane in September was also recorded as an important factor in the decline of oil production.”

Yücelik continued as follows: “We predict that in the cement sector for the time being, in all future scenarios, this trend of increase will continue and the crisis may grow bigger if production cannot be increased in coal-producing countries. Nevertheless, the fact that coal, whose average was US$177 in September 2021, saw the figure of US$280 in the international markets yesterday morning increased our concerns a lot. Also, the price of natural gas in Europe increased by over 20% in just one day. This crisis can be expected to accelerate the energy investments of countries toward green transformation, but of course, the fact that significant periods are still needed for the targeted transformation must not be overlooked. At this point, we would like to underline particularly that as the cement sector, we have been insisting on providing incentives for investments in waste heat recovery facilities for years and we mention this insistence of us on every platform. In fact, the current crisis has in a sense demonstrated how right we are in our insistence.

We kept saying again and again that in parallel with renewable energy investments, it is possible to convert industrial hot gases, which are released into the atmosphere from chimneys, into value as heat and electricity by means of using existing technologies and with more affordable costs than the construction of a new power plant. As the sector, we have commissioned 141.5 MW power with no incentives received. Owing to the waste heat, we fulfill the electricity need, which corresponds to the daily consumption of approximately 570 thousand households, only with the waste heat coming out of our process. We have the potential to invest this much once more.”