More than 9 GW of applications have been submitted to Turkey’s first FIT scheme, set to support just 600 MW of solar capacity. Nonetheless, from its tentative beginnings Turkey’s new renewable policy is already driving the first flicker of a major market
LONDON --
Mid-June saw Turkey open applications for its first ever solar
support programme, with licenses for up to 600 MW of capacity set to be
issued across 27 regions.
The move follows the introduction of a feed-in tariff scheme — the
Regulation on Certification and Support of Renewable Energy Resources
— by the country’s Energy Market Regulatory Authority (EMRA) back in
July 2011 and a license application process which was launched in May of
the following year.
Ekin Inal, a senior associate with the Istanbul-based law firm
Çigdemtekin Sahbaz Avukatlik Ortakligi explains that the renewable
energy law, as amended to provide a feed-in tariff for generators who
opt in, also provides other benefits, such as reduced costs in accessing
and using state-owned land and grid connection priority. Renewable
generators are also largely exempt from license application fees and
annual license fees.
Under the terms of the new law, developers holding a generation
license — potential generators are obliged to obtain a Renewable Energy
Resource Certificate — whose renewable energy-based facilities are
operational between mid-May 2005 and the end of December 2015 may
benefit from the support mechanism for a minimum period of 10 years,
starting from the date of operation. The scheme lasts for a maximum of
49 years.
The new electricity market law also introduced a number of other
changes, Inal adds, including a pre-licensing mechanism. Going forward,
each generator will be issued a preliminary license during the
pre-construction stage that will be replaced by a permanent license at
the beginning of construction.
License applications must pertain to a specific site and during the
pre-licensing period of two years, the generator must obtain the
required permits, approvals and licenses to start construction.
To date, says Inal, more than 600 interested parties have reportedly
applied to the Directorate of Meteorology to initiate a solar
measurement process — a one-year solar radiation measurement is a
condition of the license application. Generators must first get
authorization from the Directorate of Meteorology to set up a
measurement station on the site. Once at least six months of on-site
data has been secured, data pertaining to the remainder of the one-year
period may be obtained from Directorate meteorology stations.
In a bid to accelerate the licencing process, in late March 2013 the
Directorate shortened the evaluation process following the measurement
period from 30 days to 10.
Although it has not set out technology preferences, meaning license
holders are free to choose either photovoltaic or concentrating solar
power technologies, EMRA did include a number of terms and conditions
for licensing. For instance, a maximum of two hectares can be allocated
per MW while the total annual solar radiation must be 1,620 kWh/m2 or
more. Agricultural land has not been made available for solar projects
qualifying under the scheme.
Considering some technical constraints, the total installed capacity
of the supported generation facilities based on solar power to be
connected to the transmission system shall initially not exceed 600 MW
through to the end of this year, EMRA says. However, they add that the
Board of Ministers is entitled revise this decision after then. The
actual licenses under this first phase are expected to be awarded in the
first half of 2014.
Feed-in Tariffs Supporting Domestic Production
Qualifying solar power plants are guaranteed a minimum feed-in tariff
of US$133/MWh and coupled with a number of provisions to support
domestic manufacturing this support can reach as much as $200/MWh in
photovoltaic plants and $225/MWh in concentrating solar plants. The
incentives for using domestically-manufactured components are available
for five years after a project commences operation.
Inal says: “Under the new regime, bidders will bid to pay TEIAS an
amount per megawatt of capacity for the license, and TEIAS will award
the license to the bidder offering the highest price. The price offered
by the successful bidder will be paid to TEIAS within three years (at
the latest) after the plant goes operational. If there are no
competing bids for the same area or substation, then applicants
proceed with the licensing and interconnection formalities.
“Generators that do not opt into the renewable energy support
mechanism will sell the power to the national grid or through bilateral
trading acting through the Market Financial Settlement Center operated
by the state-owned electricity transmission company TEIAS.
TEIAS itself is due to be taken over by the Energy Market Operation
Co. or EPIAS, the new energy trading exchange, which is expected to be
operational within the next few months.”
Outlook
Electricity demand in Turkey is growing at an annual rate of almost 8
percent and currently the country is highly dependent on fossil-based
imports to meet its burgeoning energy needs.
Indeed, George Hotar, chief executive officer of Czech-based project
developers Photon Energy tells REW that although Turkey has
introduced the renewable energy law with a feed-in-tariff, based on
solar irradiation and current electricity costs, Turkey is already at
grid parity for private households and commercial users. Furthermore,
Hotar says, strong peak time demand renders PV the
most effective ‘antidote’ to frequent black outs or grid instability.
As Hotar explains: “Given the strongly growing energy demand in
Turkey, we expect PV installed at or near the electricity users to drive
very dramatic growth by PV installations, reaching multiple GWp
annually within the next three years.”
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.
AÇS 499 kWp SPP
The project, with an annual production capacity estimated at 775 MWh,
is expected to meet 42 percent of the electricity consumed in the
general administrative functions of the Central Adana facility and 82
percent of the electricity in the demand from general administrative
operations at its ?skenderun grinding facility.
A total of 2088 polycrystalline modules manufactured by Zhejang
University Sunny Energy and 30 SMA inverter units are used in the plant.
The system is connected to the Adana Cement Plant line and the return
on the investment is estimated at 11 years.
However, Hotar also warns of challenges which need to be overcome for
Turkey to meet its solar PV potential. Next to a stabilization of the
fast changing regulatory framework, says Hotar, long term project debt
financing will be an issue given the limited tenor (typically not longer
than seven years) and high interest costs as the cost of capital is the
most significant cash cost item over the lifetime of a PV plant.
Despite such challenges and although the Turkish renewable energy
market has focused more on hydropower and wind to date, there is
nonetheless significant solar power potential, theoretically estimated
at some 380 TWh with an annual solar insolation of around 2,640 hours.
As Inal says: “Given that much of this potential is expected to
remain untapped after the first round of bids and the large number of
interested parties, this indicates a genuine interest in Turkey’s solar
resources.”
Inal argues that there is no real logic behind this initial 600-MW
figure: “No-one really knows why this is so limited in the beginning.
Approximately 9 GW of licence applications have been submitted.”
Indeed she contends that, overall, the countrywide total solar power
capacity is expected to reach up to 3,000 MW by 2023 and “maybe even
more from the high number of applicants that we have seen.”
Given the evidence, there’s every reason to believe it.
http://www.renewableenergyworld.com/rea/news/article/2013/09/solar-power-surges-on-turkish-policy-backing
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