Filevault 2

I cannot turn on Filevault as I get an error message as follows:

Filevault can't be turned on for the disk Mac SSD
Some disk formats don't support the recovery partition required by encryption. To use encryption reinstall this version of OS X on a reformatted disk.

I'm using macOS Sierra
My SSD has a capacity of 239.2 GB but only 59.13GB is available.
Could this error be because there is insufficient space to do the encryption?

Yes you need to free up space to encrypt the drive. Encryption adds overhead to the data and will use a bit more space.