Investing in sustainable energy in Turkey remains a strategic priority for the European Bank for Reconstruction and Development (EBRD), Adonai Herrera-Martinez, associate director of the Energy Efficiency and Climate Change Team, said.
“Sustainable energy has always been and remains a key focus for the EBRD in Turkey,” Herrera-Martinez said in a recent interview with Anadolu Agency. “It is part of our efforts to help the country meet growing electricity demand and diversify away from expensive imported fuel, while addressing climate change.”
Almost half of EBRD’s total portfolio in Turkey promotes the sustainable use of energy because “it makes environmental and economic sense,” he said.
Since 2009, the bank has invested over €3 billion in more than 75 sustainable energy projects in the country. These include two of Turkey’s largest wind farms – Bares and Rotor in western and southern Turkey respectively – and the western Efeler geothermal power plant, Turkey’s largest and Europe’s second biggest.
EBRD’s investments in Turkey have helped reduce greenhouse gas emissions by more than 8.5 million tonnes of carbon dioxide per year, according to Herrera-Martinez.
- Market demand for MidSEFF 'impressive'
The EBRD is also happy to expand financing in Turkey through its Mid-size Sustainable Energy Financing Facility (MidSEFF) to meet local demand, and the bank has so far been impressed with the market response to this offer, Herrera-Martinez said.
The program totals €1.5 billion and up until now has been used to finance 47 projects in the country, helping build over 800 megawatts (MW) of additional renewable energy capacity.
The European Union supports MidSEFF with a combined €6.8 million in grant funding, enabling the EBRD to provide expert advice to both partner banks and their clients.
The EBRD has also helped develop Turkey’s first National Renewable Energy Action Plan to attract more investment in renewable energy projects, Herrera-Martinez said.
The plan was promoted by the Ministry of Energy and Natural Resources with support from the EBRD and grant financing from the Spanish government.
“These investments have also benefited from rapidly declining costs for renewable technologies,” he said.
“The falling specific prices for these technologies are complemented by a strong regulatory framework in Turkey, offering reasonable returns to investors through its renewable energy support mechanism, especially via the feed-in tariff system,” he added.
At the moment 1 MW of installed capacity for solar and wind power in Turkey costs less than US$1 million, making the cost of energy for these technologies competitive compared to fossil fuels, according to Herrera-Martinez.
Turkey currently enjoys the lowest geothermal drilling costs globally and has a target of 1,000 MW capacity for 2023.
“At the moment we stand at 712 MW. We expect the target to be hit before 2018 and overachieved in 2020,” he added.
- 'Goals challenging but achievable'
The renewable energy licensing regime has to be streamlined to help genuine developers accelerate investments, according to Herrera-Martinez.
“A post-2020 renewable energy support mechanism has to be defined, to provide certainty to investors. Turkey could also benefit from the example of countries where the renewable licensing process has been successfully reformed,” he asserted.
“Turkey’s energy targets for 2023 are challenging but can be achieved if all stakeholders work together.” he said, adding that to achieve these targets, the inclusion of 20 gigawatts (GW) of wind and 5 GW of solar capacity would benefit the Turkish economy as a whole as well as help preserve the country’s natural environment.
Turkey has shown a stable economic growth rate, averaging close to 5 percent in the last 15 years and energy demand has steadily increased by 6 to 7 percent per year over the same period. As a result, he said "this makes Turkey’s energy sector a very attractive one for investors, particularly for clean energy.”
The EBRD remains engaged and committed to Turkey and will continue financing new energy projects, in the aftermath of the failed coup attempt of July 15, he emphasized.
By Sibel Akbay and Zeynep Duyar
Anadolu Agency
enerji@aa.com.tr