Abstract
Increase of mass production with the industrial revolution has increased the country's dependence on energy. Even today, energy constitutes the main weight of industrialization. Especially for countries dependent on energy from abroad, energy prices are very important, and fluctuations in energy prices are decisive for the economies of these countries. Fluctuations in energy prices make the future course of energy prices important for both energy demanding countries and energy-supplying countries. There are many methods in the related literature. Our estimate of energy prices for Turkey will be based on the Nash-Cournot framework. In the Nash-Cournot framework, energy is considered as a homogeneous commodity and market equilibrium is determined by the capacity-setting decisions of the suppliers. The model indicates that competitors aim to produce more by reacting to higher prices. A fundamental offer-based stochastic model is being put forward in order to predict the energy prices and the mean price in a given period. Two ambiguous sources are addressed, these are energy producers and demand. Studies have shown that the expected number of prices increases significantly with the decrease in the number of firms in the market. Within this framework, factors determining the energy prices in Turkey will be determined and forecasts for the future will be made.
Highlights
The energy has become one of the indispensable sources for the countries in all periods of history
The energy prices have become important for many countries as well as the production of energy in this framework
Equilibrium approach uses processes based on equilibrium models for the market while forecasting energy prices
Summary
The energy has become one of the indispensable sources for the countries in all periods of history. The energy demand of the industrial cities and the metropolitan cities, which have emerged along with the industrialization process, have rapidly increased. The great increase in the energy demand which has started in the 20th century has still been important in the 21st century (Chart 1). The energy market has grown considerably in terms of the companies that generate, transmit, and distribute power over the years. Such developments are called vertically integrated structures. The number of companies in the energy sector in Turkey is 289 as of 2016. 5 energy and 3 electricity companies are traded in the Istanbul Stock Exchange. The number of energy companies traded in NASDAQ in the US is 319. The following table shows the largest energy companies in terms of earnings
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