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Turkey To Cut Feed-In Tariffs For Wind And Solar After 2020 #Energy

Turkish Minister of Energy Berat Albayrak, confirmed that the YEKDEM mechanism that regulates feed-in tariffs for renewable investments would not continue after 2020 and said, “No… We will not continue.”

 (Enerji IQ – 1 Nov. 2017) Turkey’s Minister of Energy Berat Albayrak, commented on renewable energy investments at the 6th Wind Energy Conference, organized by Turkish Wind Association at Ankara.  Last month, Minister of Energy, Berat Albayrak stated that, “we don’t really plan to continue YEKDEM after 2020.” Albayrak gave clear messages this time about the YEKDEM not continuing after 2020 by saying:

“YEKDEM will end after 2020 and ‘no’ we will not continue. Significant contributions were made despite the conditions that day; however, its term was completed. With YEKA tenders, we will continue with a more competitive process because at this point, we will enter a process that will support public finances favorably in terms or support and incentives.”

2,300 MW wind capacity auctions to start around November – December

Minister Albayrak, saying “Next year, YEKA tenders will continue with surprising steps in wind” also emphasized that the steps will be taken for the remaining wind capacity tenders. Albayrak continued by saying that, “Steps will be taken on capacity tenders around November – December.  We will complete the process for these capacities before the end of the year and we will quickly open up the way for the sector, continuing on in a very clear and concrete manner into 2018.”

Turkish regulator EMRA accepted pre-license applications for wind plant projects in 2015 but the auctions for 3,000 MW capacity started in 2017 and completed only for the 700 MW. This procedure is crucial for the investors who plan to enter the market as YEKA tenders block the market entry with their huge connection capacity.

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“We are working on new models in solar and wind”

Minister Albayrak, who stated that they are working on new models in solar and wind energy, said: “We have to maximize competition by using every source to its maximum efficiency. Significant measures will continue to be taken in regards to technology transfer and domestic production. We are planning for next 10-20-30 years with a different approach from the past 15 years.   

YEDKEM may continue for geothermal and biomass, while wind and solar can be indexed to domestic equipment

Minister of Energy and Natural Resources, Berat Albayrak’s statements on YEKDEM ending in 2020, is being carefully followed by renewable energy investors and financial institutions which finance these projects.

YEKDEM (Renewable Energy Support Mechanism) regulates feed-in tariff for the renewable energy plants for their first 10 years. The feed-in tariff in U.S. Dollars is accepted as the major guarantee that enabled banks to supply project finance for these investments. However, the deadline for YEKDEM is set as the December 31, 2020 in the Renewable Energy Act of Turkey.

Within the last two years, feed-in tariffs offered by YEKDEM is systematically obligated to a reduction by amending the secondary legislation such as setting up the balancing liability for the power plants. This year, 647 facilities with 17,400MW installed capacity benefit from YEKDEM.

According to the insight, received by Enerji IQ from the sources at the Ministry of Energy, YEKDEM will not continue for wind and solar investments after 2020. But market players and banks try to offer a new incentive model to the Ministry to enable sustainable financing models for the future projects. But Ministry of Energy, prioritizing local coal investments do not agree on implementing a new feed-in tariff model for solar and wind projects. Despite the concrete statements of the ministry, sources closed to these discussions highlight the possibility of a new model, which will support the projects with respect to the locally manufactured equipment rate.

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A senior source from the Ministry of Energy pointed out that that the YEKDEM will continue decreasing the amounts in geothermal and biomass.


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Enerji IQ

Enerji IQ is the Turkey’s first local energy market intelligence and information provider, established as an independent dedicated company on October 2012. Enerji IQ published the first weekly issue in November 2012 and the first bi-weekly English issue in April 2013 and successfully formed a regional subscriber portfolio, with the genuine operational news, in-depth trend and regulatory analysis with commentary on price drivers.

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