Largest-Ever Power Cuts Hit Turkey’s Industrial Production

(Bloomberg) -- Turkey slashed electricity supplies to industry after Iran announced a temporary halt in natural gas exports, a move that threatens to hit critical sales abroad. 

The government has imposed three days of power outages a week in the country’s hundreds of organized industrial zones. The main electricity distribution company TEIAS verbally informed zone managers over the weekend and said written notices would follow. 

Car maker Renault SA announced it will stop production at its Bursa plant for 15 days, according to reports in the Turkish press, as the outages compound the global chip shortage already battering the automotive industry. Turkey’s automotive sector is the country’s top exporter, accounting for 11% of all exports in 2021. 

More than half of the country’s electricity is produced in gas-powered plants, and the disruptions of flow come at a critical time, as Turkey struggles to cover the surging cost of gas imports with a badly weakened lira. Turkey had 1.2 billion cubic meters of gas in storage as of Jan. 18, 42% less than a year earlier, according to Energy Exchange Istanbul data. 

Iran, a major supplier of gas to Turkey, suspended the gas flows to Turkey for 10 days on Thursday, citing technical failures. It later said it restarted them, but Turkish officials denied that and sent a delegation to Tehran to try to sort things out. 

This is the first time that Turkish industrial companies have experienced power outages of this magnitude. Industry accounts for nearly a quarter of economic output, and nearly 10% of the country’s workforce is employed in more than 300 industrial zones. 

Listed companies across the manufacturing spectrum announced power or gas cuts in stock exchange filings over the weekend. Riot control trucks manufacturer Katmerciler said it’s halting work for four days starting Monday, while Kutahya Porselen said its output would fall due to the fuel cutback. 

“Industrialists are appalled, disheartened and demoralized,” Dunya newspaper cited Mujdat Kececi, the head of a local industry trade association, as saying. “No one knows where the solution lies or when it will come.”

(Recasts lead, updates with gas reserves data in fourth paragraph)

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