The exponential increase of Turkey’s energy demand over the last decade, as the sixth largest economy in Europe and the seventeenth largest in the world, has put further strain on the country for the utilization of domestic energy resources especially in renewable energy.
With an estimation of four to six percent of annual growth in energy demand, the Turkish Ministry of Energy and Natural Resources estimates that by 2023, Turkey will be in need of around US$110 billion of investment to meet its energy demand which has been driven particularly by rapid urbanization and economic growth. To create additional economic value and to meet the soaring electricity demand while diversifying away from costly imported fossil fuels, Turkey has given the highest priority to maximize the use of local and renewable energy resources.
From the technical point of view, Turkey has substantial potential for renewable resources in wind, hydro, solar and geothermal. With the exception of hydropower, other resources have not yet been playing a noteworthy role towards the total volume of domestic electricity supply.
However, Turkey has ambitiously targeted reaching 20,000 megawatts (MW) in capacity of wind power by the year 2023. The Renewables International Magazine data clearly demonstrates the incremental increase in wind capacity in recent years. In 2008, installed capacity of wind energy was only 364 MW but this increased to 2,312 MW in 2012.
Historically, the first small-scale power plant in Izmir back in 1986 had a capacity of 55 kilowatts (kW), while the first large-scale electricity generation from wind realized in 1998, in Cesme-Garmiyan has a much bigger capacity of 1.74 MW. The biggest wind energy power plant constructed in Manisa in 2012 has a 140.1 MW wind capacity. With regards to the distribution of total installed wind power among major Turkish cities, in 2012 Balikesir ranked first with a total capacity of 20 percent and Manisa and Izmir followed second and third with 17 and 16 percent of total installed wind capacity respectively.
Although there is still room for improvement to reach the proposed capacity of 10 gigawatts (GW) of wind capacity connected to the grid in 2020, the law on the Utilization of Renewable Energy Resources for the Purpose of Generating Electricity (5346) has been a significant step towards the realization of a better market-based policy for renewable energy. With the enactment of this regulation, it aims to incentivize the generation of electricity, diversify energy sources, and mitigate the overall hazardous effects of greenhouse gas emissions as well as ease the establishment of a manufacturing industry for renewable energy. In order to support the nascent renewable industry, legal entities that own a retail sale license are obliged to purchase electricity generated from renewable energy at a higher price than the average wholesale electricity price as part of this specific incentive. Currently, the Energy Market Regulatory Authority (EPDK) is in charge of promoting renewable energy for the electricity market.
Turkey’s electricity market has passed through a transformational period from being a totally state owned structure to a fully liberalized market. Renewables have been the center of attraction for private investors, in particular wind power plants. The most significant factor attributed to the attraction of wind energy in Turkey is down to the country’s unique geographic character with its high concentration of wind resources as well as its evolving renewable market regulations. The construction of a wind farm is capital intensive investment since nearly 75 percent of its installation cost is directly related to upfront cost, including the grid connection, turbine and foundation system.
Turkey has come a long way since the installation of its first wind power plant back in 1986. However, some of the bottlenecks encountered at local level, such as the lack of management know-how, difficulties in finding staff with sufficient technical operational knowledge of power plants and the scarce availability of credit facilities for small-scaled projects are some of the hurdles that the wind industry faces.
Additionally, at an institutional level, better cooperation and coordination is needed to smooth over the hurdles. Technical interaction analysis procured from the Technological Research Council of Turkey in consultation with the EPDK as well as the Turkish General Staff regarding wind projects interference with radar, navigation and communication systems stand as a deterrent to newcomers to the field since 2010.
On the other hand, the feed-in-tariff mechanism, which guarantees a set price coupled with local content support, have created an attractive investor friendly environment for wind power investment in Turkey.
The ambitious vision to achieve the total installed capacity of thirty percent of renewable energy by 2023 is both challenging and promising for Turkey. Given Turkey’s vibrant energy sector and high renewable energy potential, it is within the realm of possibility to bring online a commercially viable and economically sound renewables portfolio.
