Turkey Entering a New Energy Era

Turkey is on the cusp of a new energy era. With changing policies and new laws, renewable energy generation is encouraged like never before. Recently, Turkish Deputy PM, Ali Babacan stated that several governmental assistances have been given to the purchase of electric power production on the foundation of renewable energy.

New Policies for Renewable Energy Generation

Turkey also recently amended its policy on unlicensed renewable energy production and made it much more profitable. The policy which was updated in October this year enables owners of small solar PV systems to sell their surplus to the government.

Unlicensed systems plugged to the national grid and producing up to 1 mw of energy are eligible for payments up to $0.133USD under the new regulation. This opens up new opportunities for solar energy within the Turkish market. According to Solarplaza.com, an independent global platform for knowledge, trade and events for the photovoltaic solar energy (PV) industry, this move is to eliminate the mass import of fossil fuels into the country that is creating an imbalance in the local economy. It will also help incorporate renewables into its energy mix.

Dr. Aygün Keser, the country representative for Turkey at global management consulting firm Apricum estimates that there are already 10-15 unlicensed solar PV projects running in Turkey and this policy offers a big advantage to them. The Mediterranean location with its high degree of solar radiation offers great possibilities for solar energy in Turkey, he adds. Moreover, Turkey has a growing energy demand that is increasing by about 8% every year.

A study published by consultancy Deloitte recently identified Turkey as the country with the highest solar potential in Europe, surpassing Spain, Germany or the Czech Republic. The country’s ambitious solar goals can be seen in various projects it has undertaken in the last several years. Recently, Ozyegin University located on the Anatolian side of Istanbul had set up a 376kw rooftop project. Burak Sefer, general manager for Reengen is the man behind this undertaking that consists of 21kw, 95kw, 135kw and 135kw modules spanning four buildings. Most of the energy generated from this will be used by the University and any extra energy will be sold on to the national grid. The biggest project so far is the 5MW solar plant project that will be set up at the Turut Ozal Medical Center of İnönü University, Malayta. According to PV-Tech.org, a leading source for solar-related news, the contract for building the solar plant was signed early this month with renewable energy project engineer, Anel Telekom. Once completed, this would be the largest solar installation in the country.

An example of a recent commercial development along these lines comes from Adana Cement, which has constructed a 499-kW PV project near a number of its production sites. Claiming the title of the first solar power plant to be approved by distribution grid operator TEDAS, the bid for the plant was conducted in July 2012 and operations began in May 2013.

Solar Support Programmes

Turkey also launched its first-ever solar support programme in mid-June this year. More than 9 GW of applications have been submitted for this programme, which was set to provide licenses for up to 600 MW of solar capacity. It was planned to be issued across 27 regions.

According to Senior Editor of Renewable Energy World, David Appleyard, this programme follows the introduction of the Regulation on Certification and Support of Renewable Energy Resources, a feed-in tariff scheme in 2011.

The the feed-in tariff scheme also provides additional benefits like assessment and using of state-owned lands for reduced costs and grid-connection priority states Ekin Inal, a senior associate with the Istanbul-based law firm Çigdemtekin Sahbaz Avukatlik Ortakligi.  Renewable generators are also largely exempt from license application fees and annual license fees.

Inal adds that more than 600 interested parties have reportedly applied to the Directorate of Meteorology to initiate a solar measurement process. This process takes around one year and is a prerequisite to the license application. After getting an authorization from the Directorate of Meteorology to set up a measurement station on the site, measurement procedure can begin. Once on-site data for six months has been secured, the rest can be procured from Directorate meteorology stations.

After the measurement period comes the evaluation period. It was initially 30 days but inorder to accelerate the licensing process, the Directorate shortened the evaluation process to 10 days in late March 2013.

Solar power plants that qualify the evaluation get a minimum feed-in tariff of US$133/MWh and provisions to support domestic manufacturing. This support can reach as much as $200/MWh in photovoltaic plants and $225/MWh in concentrating solar plants, Inal adds.

Even though Turkey’s future in renewable energy appears bright, there could be challenges states George Hotar, chief executive officer of Czech-based project developers Photon Energy. In his interview with Renewable Energy World, he said that Turkey needs to stabilize its fast-changing regulatory framework. He adds that long term project debt financing could also be a problem with the high interest costs and limited tenor as the cost of capital is the most substantial cash cost item over the lifetime of a PV plant. Moreover, Turkey is still highly dependent on fossil-based imports to meet its increasing energy needs. In this context, solar energy has high significance, not only as a cleaner alternative but also to make Turkey less energy-dependent.

Despite these challenges, Inal expects the countrywide total solar power capacity to reach up to 3,000 MW by 2023 or perhaps even more based on the amount of applications they received.