Green electrical power tariffs, 1 GW solar tender 'light at the end of the tunnel' for Turkish PV

Jul 3, 2020 04:14 PM ET
  • The brand-new 1 GW Yeka tender in Turkey is more than welcome, claims KRC Consulting's Hakki Karacaoglan and Life Enerji's Ramazan Aslan. Laws to allow "environment-friendly electrical power" tariffs, additionally revealed this month, include additional energy to the nation's solar industry-- permitting Turkish consumers pick renewable resource for their power supply.
Green electrical power tariffs, 1 GW solar tender 'light at the end of the tunnel' for Turkish PV
Image: IBC Solar

Turkey's Ministry of Energy and Natural Resources has actually officially released the details of its 1 GW solar public auction. The smallest task permitted under the tender is 10 MW in dimension, while the biggest is 20 MW.

According to the news released in today's problem (03/07/2020) of the Official Gazette, the public auction will be held over a four-day period in between October 19-23, 2020, for jobs situated in 36 cities, and also across 74 grid connection points.

The starting ceiling price in the auctions will be 0.3 TL/kWh (US$ 0.044/ kWh), and the winners will certainly get a 15-year power purchase assurance. All projects should utilize in your area generated components.

The complying with cities have been designated jobs under the tender: Adıyaman, Ağrı, Aksaray, Ankara, Antalya, Batman, Bayburt, Bilecik, Bingöl, Bitlis, Burdur, Bursa, Çankırı, Çorum, Diyarbakır, Elazığ, Erzurum, Eskişehir, Gaziantep, Hakkari, Iğdır, Kahramanmaraş, Kars, Kırşehir, Kilis, Malatya, Mardin, Mersin, Muş, Nevşehir, Osmaniye, Siirt, Şırnak, Uşak, Van and also Yozgat.

This 1 GW auction is like the light at the end of the passage for the Turkish solar industry, which had been in decline even before the impacts of Covid-19 were felt.

In the first 5 months of 2020, total set up PV capability for the year stood at simply 157 MW contrasted to in 2014's virtually 1 GW for the full year. This was a decline from 1.6 GW in 2018. Turkey's solar market has been frantically seeking preparing security during Covid-19. Such public auctions are more than welcome, since roof covering top self-consumption versions are evidently not moving ahead quickly enough.

While the auctions are a favorable step, financing tasks will certainly still stay tough. As stated, the public auction will certainly be held in Turkish Lira as well as ceiling price is already as low at US$ 0.044/ kWh. Considering that locally-manufactured modules need to be made use of, which they are around 30% extra expensive than those created elsewhere, project programmers and taking part parties will have troubles in defining the best prices. On the other hand, since the auction is in Turkish Lira, fundraising will certainly be in Turkish Lira. As a result of the high rising cost of living rate-- presently going for 10-12%/ a-- financing prices will be higher than if the public auction was in euros or U.S. dollars.

Added plan measures to introduce "eco-friendly tariffs" for power consumers might provide another boost to solar programmers-- possibly driving demand.

Within the framework of reforms to Turkey's electrical power market, there has actually been a need to amend the Regulation on the Renewable Energy Resource Guarantee Certificate in the Electricity Market and also the Regulation on the Documentation and Support of Renewable Energy Resources. For this purpose, a draft was released on July 1, 2020, modifying the regulations concerned. The Draft Regulation will certainly be open to public opinion and also analyses till July 28.

The tariff regulative reform looks for to introduce an electrical energy tariff for Turkish consumers based upon renewable resource resources. It introduces a legal structure for a "eco-friendly tariff", permitting electrical power consumers the opportunity to purchase certified clean power. It makes use of similar relocate various other countries.

To present such tariffs, new laws are called for. Accordingly, the "Draft of Renewable Energy Resource Guarantee Certificate Regulation in Electricity Market" (REC Regulation) has been prepared. In terms of conformity with this new law, some amendments were made in the Regulation on Certification and also Support of Renewable Energy Resources.

At the same time, Turkey's Ministry of Energy is preparing a "Green Tariff"-- expected to be announced following month-- which will be a brand-new end-user tariff for those seeking to resource their electrical energy from 100% renewable resources. Providers of this tariff will be needed to issue as well as retire RECs for each and every MWh to be offered in accordance with the REC Regulation.

As is known, Turkey's existing feed-in-tariff program (YEKDEM) finishes at the end of 2020. It is not specific what form YEKDEM's replacement will take-- although the 1 GW public auction provides some certainty. The Green Tariff as well as RECs appear to be the major instruments to be made use of by the ministry for fostering eco-friendly development.

It is clear that the Turkish federal government does not intend to proceed with the state supported YEKDEM plan, rather aiming to divert demand-side measures in the market. Participation to both Green Tariff and RECs are voluntary as for now, hence passion of the general public to these brand-new instruments is in concern. However, the Energy Ministry might enforce some REC allocations on electrical power suppliers or provide some motivations for the REC individuals in future-- which may after that be a reliable boost for renewable resource financial investments in Turkey.