RENEWABLE ENERGY IN TURKEY
ANNUAL BOOK 2020
EMBASSY OF THE REPUBLIC OF KOREA JULY 2021
Authored by: TUGBA GULEN
1. OVERVIEW
Turkey has substantial amount of renewable energy potential and utilization of renewable energy has been increasing over the last decade.
Turkey is working to expand its renewable energy capacity to reduce its heavy reliance on imported energy that causes current account deficit, as well as for creating jobs and reducing the national carbon footprint.
According to reference scenario of General Directorate of Energy Works, annual electricity demand would reach 370 billion kWh (370 TWh) by 2025, 440 billion kWh by 2030, 507 kWh by 2035 and 591 kWh by 2040.
In line with 2023 Targets and New National Energy and Mining Strategy, Turkey continues its efforts to increase the share of renewable energy sources in the energy mix in order to reduce its energy dependence and current account deficit and to decrease its carbon emissions.
➢ The renewable energy potential of Turkey as per resource is as follows1:
• Hydro: 160,000 GWh/year (economic potential)2
• Wind: 48,000 MW (+10,000 MWh Offshore)
• Average annual radiation intensity = 1527.1 kwh / m2-year
• Biomass: 8.6 MTEP (120,000 MWh)
• Biogas: 1.5-2 MTEP
• Geothermal: The potential for electricity generation in Turkey is estimated at 2000 MWe and also heat potential is 31.500 MWt. (visible potential: 35,500 MWt)
➢ Turkey is a founding member of International Renewable Energy Agency (IRENA) since 26 January 2009.
➢ Renewable energy resources in Turkey are utilized mainly for electricity generation and heating purposes.
➢ As of 2020 year-end, the total installed capacity of renewable resources based electricity generation facilities is 26,287 MW excluding reservoir hydro and 49,212 MW including reservoir hydro. Annual electricity generation from renewable resources (incl. res. hydro) was 129,469 GWh which constitutes 42.4% of Turkey’s total annual electricity generation.
1 Ministry of Energy and Natural Resources (MENR)
2 Turkey's theoretical hydroelectric potential is 1% of the world's theoretical potential, and its economic potential is 16% of the European economic potential. – Ministry of Energy and Natural Resources
2. SECTORS IN RENEWABLE A. POWER
3INSTALLED CAPACITY
➢ The total installed capacity of Turkey reached 95,891 MW by the end of 2020. The share of renewables (including reservoir hydro) in the total installed capacity is 51.3% with 49,212 MW.
➢ The installed capacity of reservoir hydroelectric power plants was recorded as 22,925 MW and constitutes alone 23.9% of the total installed capacity in Turkey.
➢ When reservoir hydro plants are excluded; the total installed capacity of the renewables, as of 2020 year-end, was recorded as 26,287 MW and constitutes 27.4% of Turkey’s total installed capacity.
RESOURCE
2019 2020
Change in Capacity
(%) Installed
Capacity (MW)
Nb. Of Powerplants
Installed Capacity (MW)
Nb. Of Powerplants
Reservoir Hydro 20,643 124 22,925 133 11.1%
Run-of-River
Hydro 7,861 558 8,059 577 2.5%
Geothermal 1,515 54 1,613 60 6.5%
Biomass 802 181 1,116 275 39.2%
Wind 7,591 275 8,832 332 16.3%
Solar 5,995 6,901 6,667 7,518 11.2%
TOTAL
RENEWABLES 44,406 8,093 49,212 8,895 10.8%
TOTAL RENEWABLES (excluding Reservoir Hydro)
23,763 7,969 26,287 8,762 10.6%
TURKEY TOTAL 91,267 8,589 95,891 9,402 5.1%
SHARE IN TOTAL INSTALLED CAPACITY TOTAL
RENEWABLES 48.7% 51.3% -
TOTAL RENEWABLES (excl. Res. Hydro)
26.0% 27.4% -
➢ An estimated 0.1 GW of new geothermal power generating capacity came online in 2020 during which relatively little growth in capacity realized compared to recent years (attributed in part to pandemic-
3 EMRA Monthly Electricity Sector Reports
related disruption), with almost all new facilities located in Turkey4. As seen in the table above, the installed capacity for geothermal power plants increased almost 100 MW within 1 year in Turkey.
➢ In 2020, Turkey still ranked fourth globally for total geothermal power capacity, with 1.6 GW.
Geothermal power supplies around 3% of the country’s electricity demand.
ELECTRICITY GENERATION
EMRA provides statistics regarding the installed capacity for run-of-river and reservoir hydro seperately.
However; it does not provide electricity generation statistics individually for run-of-river and reservoir hydro but only provides total electricity generation from hydro resources. Therefore there is a a difference from the previous report “ Renewables 2019”.
TEIAS provides very extensive annual statistics regarding electricity sector. Unfortunately TEIAS report for the year 2020 is not published yet.
▪ The total electricity generation from renewable resources (including reservoir hydro) in 2020 was recorded as 129,469 GWh which constituted 42.4% of the total electricity generation of Turkey. As seen in the table below, the share of electricity generation from hydro resources is the highest in total renewables generation with 60%, followed by wind with 19.1% and geothermal by 7.7%.
Renewable Resources (incl. Reservoir Hydro)
2019 2020
Change Generation (%)
(GWH)
Share in Renewables
Generation (GWH)
Share in Renewables
Hydro 88,884.6 66.5% 78,114.9 60.3% -12.1%
Geothermal 8,929.7 6.7% 9,929.4 7.7% 11.2%
Biomass 4,521.8 3.4% 5,501.9 4.2% 21.7%
Wind 21,749.9 16.3% 24,680.8 19.1% 13.5%
Solar 9,620.3 7.2% 11,242.5 8.7% 16.9%
Total Renewable
Generation 133,706.3 129,469.6 -3.2%
Renewables' Share in Total
Generation 44.0% 42.4% -
4 REN21- Renewables 2021 Global Status Report
B. HEATING
GEOTHERMAL HEAT
➢ As a consequence of the efforts of the Ministry of Energy and Natural Resources to improve the existing resources and to search for new resources/fields, Turkey’s total geothermal heat capacity (visible amount of heat) reached to 35,500 MWt5.
Turkey is quite rich in terms of geothermal energy resources and has approximately 1,000 geothermal springs with various temperatures, located mainly in Western Anatolia.
90% of the geothermal resources in Turkey are low and medium enthalpy geothermal areas which are suitable for direct applications such as heating, thermal tourism, industrial usage, etc. while 10% are suitable for indirect applications such as electricity generation.
Direct use of geothermal energy for thermal (heat) applications is highly concentrated geographically, with only four countries – China, Turkey, Iceland and Japan – accounting for three-quarters of the energy consumed. In 2020, Turkey 2nd top country after China for geothermal direct use.
Turkey is in the top five countries in the world in terms of geothermal heating applications.
➢ Greenhouse heating area in Turkey increased from 500 decares in 2002 to 3,931 decares in 2017 and reached 4,052 decares in 20196.
➢ Residential heating increased from 30,000 RE7 in 2002 to 125,00 RE in 20198.
SOLAR THERMAL HEATING
➢ An estimated 25.2 gigawatts-thermal (GWth) of new solar thermal capacity was added in 2020, increasing the global total 5% to around 501 GWth, with China, Turkey, India, Brazil and the United States leading in new installations9.
➢ As mentioned above, China again led in new solar thermal installations, followed by Turkey, India, Brazil and the United States. Most large solar thermal markets were constrained by COVID-19-related challenges, and in some cases commercial clients postponed investment decisions. However, the reduction was smaller than expected due to stabilising factors such as on-going business in the construction sector and higher demand from residential owners, many of whom spent more time at home and invested in infrastructure improvements.
5 MENR https://www.enerji.gov.tr/tr-TR/Sayfalar/Jeotermal
6 MTA http://www.mta.gov.tr/v3.0/arastirmalar/jeotermal-enerji-arastirmalari
7 RE: Residence Equivalent, 1 RE =100 m2 heated area
8 MTA http://www.mta.gov.tr/v3.0/arastirmalar/jeotermal-enerji-arastirmalari
9 Renewables Global Status Report 2021
➢ Turkey’s solar thermal market is the second largest one for new sales worldwide and the market expanded slightly (up 2%) in 2020, following stagnating sales the previous year, resulting in 1.35 GWth of newly installed capacity.
➢ Solar thermal capacity in operation in Turkey by the end of 2020 is recorded as 18.4 GWth that accounts for 4% of the global total.
➢ The pandemic affected Turkey’s market in two opposing ways. In the residential sector, sales of solar water heaters increased as Turkish residents moved away from urban areas and apartment buildings to villages and individual houses, boosting the renovation business and the prefabricated housing market and triggering solar thermal sales. Meanwhile, sales of solar thermal systems for hotels and resorts declined.
BIO-FUEL
Biofuels are bioethanol, biodiesel, biohydrogen and biomethane. In Turkey, biodiesel is a fuel which can be used in every area where diesel is used, except for our very cold regions; therefore, it can be considered as a proper alternative fuel for diesel fuel.
The biodiesel is produced from waste oil and from oil seeds such as soybean, peanut, sunflower, sesame, safflower, canola, cottonseed, flaxseed, hempseed and poppyseed; however, majority of the oil seeds are imported. Therefore; in order to foster energy-agriculture in Turkey, the Government made use of biodiesel from locally produced oil seeds mandatory in diesel fuel at a ratio of 0.5%.
Turkey’s average diesel consumption is 25 million tons annually. As mentioned before, as of 1 January 2018, EMRA10 announced that it is mandatory to blend 0.5% biodiesel into the diesel fuel. It is important to note that the biodiesel that is blended should be produced from waste oil and locally produced oil seed products.
The amount of the biodiesel blended in Turkey is 118,389 tons in 2019 and despite the pandemic, the production realized at 74,575 tons in 2020. The sector aims to produce 500 million liters in 2023.
The graph below displays historical data:
Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Blended
Biodiesel (ton)
7,463 11,732 17,732 21,379 32,877 60,945 64,103 74,000 108,373 118,389 74,575
10 Energy Markets Regulatory Authority
3. ECONOMIC CONTRIBUTION
According to Deloitte Turkey Energy and Natural Resources section, a total amount of USD 6.5-7 billion investment was made to the renewable energy sector in Turkey in 2020. This relatively high amount of investment is attributed to expiration of the existing Feed-in-Tariff mechanism by the year-end (2020) and implementation of a new one. However; as will be explained further in this report, the deadline for the expiration was extended until 30 June 2021.
4. POLICY
As mentioned before, one of the major policy of the Turkish Government is to increase the share of renewables and local resources in electricity generation in order to decrease the energy bill that causes current account deficit in the balance of payments of Turkey. Increasing the share of renewables is aimed also for the reduction of carbon emissions.
In the Strategic Plan 2019-2023, the Ministry of Energy and Natural Resources (MENR) aims to increase the share of renewable and local resources installed capacity to 65% by 2023.
➢ The renewable energy goal of the Government by the year 2023 in MENR’s 2019-2023 Strategic Plan is as follows:
• 11,883 MW installed capacity of wind power
• 10,000 MW installed capacity of solar power
• 32,037 MW installed capacity of hydro power
• 2,884 MW installed capacity of geothermal power and biomass power (including biogas)
5. LEGISLATION
Turkey has efforts to increase the share of renewable energy sources in energy supply and reorganize the legal infrastructure. The important legislation in Turkey valid for the renewable energy sector consist of the following laws and regulations:
Laws:
▪ Electricity Market Law (Law Nb. 6446)
▪ The Law on Utilization of Renewable Energy Resources for the Purpose of Generating Electrical Energy (Nb. 5346) “Renewable Energy Law”
▪ The Amendment of “Renewable Energy Law” (Law Nb. 6094)
▪ Law on Geothermal Resources and Natural Mineral Waters (Nb. 5686)
▪ The Law Amending the Electricity Market Law and Certain Other Laws (Nb. 6719) “Amendment Law”
▪ The Law Amending the Electricity Market Law and Certain Other Laws (“Law No. 7257“)
Regulations:
▪ Regulation on Certification and Support of Renewable Energy Resources (“YEKDEM Regulation”)
▪ Electricity Market License Regulation: Electricity Market License Regulation was amended on 16 February 2019 to enable share transfer and ownership structure change, only for YEKA projects.
▪ License Exemption Regulation
▪ Regulation on Supporting the Local Components Used in the Electricity Generation Facilities Generating Electricity from Renewable Resources
▪ Renewable Energy Resource Areas (YEKA) Regulation: issued in the Official Gazette on 9 October 2016
New Renewable Energy Support Scheme (YEKDEM) and Feed-in Tariffs
As recalled, according to the Law No. 5346 on “Utilization of Renewable Energy Sources for the Purposes of Generating Electrical Energy” that was adopted in 2005, the feed-in tariff levels for different renewable energy technologies were as follows:
Renewable Energy Incentives Feed-in Tariff as per Renewable Resource
Renewable Resource Feed-in Tariff (USD cent/kWh)
Hydroelectric Power Plant 7.3
Wind Power Plant 7.3
Geothermal Energy Plant 10.5
Biomass Supplier (incl. landfill gas) 13.3
Solar Power Plant 13.3
According to Law No. 5346, the electricity generation beneficiary projects should be in operation before December 31, 2020 to be eligible for YEKDEM benefits and to be awarded the right to sell power at prices determined as above.
The Turkish Government initially planned to end its “Renewable Energy Support Scheme (YEKDEM)” by 2020 and replace it with a more updated and efficient one which was subject to heavy criticism from market players.
On 18 September 2021, the President Decision to extent the YEKDEM benefits with the existing FIT until 30 June 2021 was published in the Official Gazette.
• Accordingly, the price support determined for the production facilities with Renewable Energy Resources (YEK) certificate subject to YEKDEM, which will be put into operation from January 1, 2021 to June 30, 2021, will be applied until December 31, 2030. In other words, if the renewable power plant is commissioned before 30 June 2021, the old prices in the table
above will be valid. This had increased the renewable energy investments in the first half of 2021.
On 2 December 2021, the Law No. 7257 Amending the Electricity Market Law and Certain Other Laws (“Law No. 7257“) was published in the Official Gazette and became effective on the same date. The Law No. 7257 introduced significant changes to the Turkish Renewable Energy Resources Support Mechanism (tr. YEKDEM) through amendments to the Renewable Energy Resources Law No. 5346 (“Law No. 5346“).
• The most important change in the law is the implementation of the YEKDEM Support Mechanism and local component support in Turkish Lira instead of USD for the electricity generation facilities that will come into operation after 30 June 2021. The President was authorized to determine the procedures and principles regarding the updating of prices and domestic component support.
On 30 January 2021, the long-awaited President Decision Nb.3453, which introduces relevant regulations on the support mechanism (YEKDEM) was published in the Official Gazette.
➢ What Does the Decision Introduce?
YEKDEM will be applicable for electricity generation facilities holding a renewable energy resource certification and commissioned between 1 July 2021 and 31 December 2025 as follows:
Period: 10 years for feed-in tariff and 5 years for domestic production incentives.
Feed-in tariff and domestic production incentives: The prices are determined in Turkish lira, as listed in Table 1 below. They will be subject to an escalation mechanism calculated quarterly and based on the producer price index, consumer price index, US dollars purchase rates and euro purchase rates.
Feed-in tariff caps: The Decision provides caps for feed-in tariffs in US dollars, as listed in Table 1.
Accordingly, the corresponding value of an updated feed-in tariff cannot exceed the relevant cap. The corresponding value will be calculated based on the average daily US dollar purchase exchange rates published by the Turkish Republic Central Bank for the second, third and fourth months prior to the first month of the relevant calculation period.
6. DEVELOPMENTS IN HYDROGEN ENERGY
Like several other countries, Turkey has also announced to develop the national hydrogen strategy to diversify its energy mix and reduce its current account deficit. Minister Dönmez has announced that the country will develop a national hydrogen strategy till the end of this year by incorporating feedback from businesses and consumers.
Background:
• The date of 2 May 2007 stands out as the first date of entry of hydrogen energy into official documents. In the "Energy Efficiency Law" published in the Official Gazette on the same date, the use of hydrogen and biofuels was determined as alternative fuels that should be encouraged.
• Turkey tried to increase its research and development (R&D) activities on hydrogen by supporting ICHET, which was established in Istanbul in the early 2010s under the leadership of UNIDO. In this context, the "Bozcaada Hydrogen Island Project" was carried out in 2011 with the support of the Ministry of Energy and Natural Resources (MENR). With the project, which was put into operation on October 7, 2011, the electricity demand of the Bozcaada District Governor's Office and the health center were met with the hydrogen produced. Despite this, the continuation of the project was not carried out and the hydrogen production has been terminated.
• In addition, a regulation on hydrogen fueled vehicles was enacted in 2011. With the said regulation, a regulation was made for the type approval of vehicles running on hydrogen fuel, and a preliminary preparation was made with the expectation that these vehicles would be on the agenda after a while.
Although hydrogen energy took its place in Turkey's energy policies, it did not receive serious attention until January 2020.
The importance of hydrogen was firstly explained to the public with the "Hydrogen Search Conference"
organized by MENR on January 15, 2020. Minister of MENR, Fatih Dönmez held a speech at the meeting and drew attention to the fact that as the Ministry, they aim to obtain hydrogen through 4 main benefits.
• to include more renewable energy in the system,
• to make the heat sector carbon-free,
• to produce hydrogen from domestic coal,
• to increase the use of boron as a hydrogen storage and scavenger.
Minister Dönmez added that storage technologies should be used in order to balance electricity production from renewable energy sources and stated that one of the methods for this is mixing 2% to 6% hydrogen into natural gas distribution lines. He added that in Turkey, hydrogen entry into the distribution lines is aimed at the end of 2021 at the latest.
Incorporation and Integration of Hydrogen into Natural Gas Lines Project was initiated in 2018 and responsibility was given to the Turkish Natural Gas Distributors Association (GAZBIR) by the MENR.
On April 2, 2021, GAZBİR's technical center GAZBİR-GAZMER Clean Energy Technology Center was opened in Konya.
Minister Dönmez stated that the facility was completed with a total investment of 6 million TL, and that the project of feeding household appliances by blending natural gas with hydrogen was implemented for the first time in Turkey.
For test purposes in the laboratory, an average of 5% to 20% hydrogen and 95% to 80% natural gas were mixed and this mixture was burned for test purposes.
According to the first results of the project, without the need for a significant change in natural gas indoor installations and consumer devices, hydrogen can be combined with natural gas in distribution networks with a maximum of 20%.
As stated by Minister Dönmez;
• Turkey will benefit from hydrogen applications in LNG- and CNG-powered trucks.
• Heavy vehicles and hydrogen-powered trains are also on the agenda.
• Turkey works towards making hydrogen by using domestic coal with capturing carbon dioxide (grey hydrogen).
• Several foreign organisations showed great interest in Turkey’s hydrogen export potential
7. RENEWABLE ENERGY RESOURCE ZONE (YEKA) PROJECTS
The Ministry of Energy and Natural Resources issued a Regulation on Renewable Energy Resource Zones on October 9, 2016 in the Official Gazette.
The Regulation introduced a new investment model to support renewable energy investments and incentivize local manufacturing of renewable energy generation assets (components).
The main purposes of the Regulation have been identified as follows:
➢ to commission renewable energy resources much more efficiently and effectively through identification of renewable energy zones;
➢ to realize the renewable energy investments much more rapidly;
➢ to manufacture renewable energy equipment in Turkey;
➢ to use locally-manufactured equipment/ components;
➢ to contribute to research and development activities through technology transfer.
A renewable energy resource zone (YEKA) and its electrical connection capacity utilization rights can be offered to an eligible entity with a tender under the “Allocation on the Condition of Local
Manufacturing” or “Allocation on the Condition of Using Locally-Manufactured Equipment”
mechanisms.
1st Solar YEKA Tender
On 20 March 2017, Turkey finalized the largest-ever solar power reverse-auction. A consortium of Turkey’s Kalyon Enerji and South Korea’s Hanwha Q CELLS won the tender for the construction of a 1,000 MW solar power plant in the Karapinar district of the Central Anatolian province of Konya.
The winning bid was a price of USD 6.99 cent/kWh.
The tender called for 1 GW of installed capacity along with a manufacturing factory for photovoltaic (PV) equipment.
Under the terms of the tender, the power purchase contract will be valid for 15 years, and the solar equipment used must be domestically produced.
The total investment in this solar mega project is USD 1.3 billion. According to the contract, the solar power plant will be operational for 30 years and meet the energy needs of more than 600,000 households.
The project company will also be conducting R&D activities in Turkey for at least 10 years with the employment of at least 80% local staff.
After the building of the solar panel factory and R&D center in Ankara was completed, Hanwha Q-Cells sold its shares to Kalyon and quitted the project.
Afterwards, Kalyon became partners with Chinese China Electronics Technology Group Corporation (CETC) and sold Hanwha’s shares to them.
The solar panel factory with an annual production capacity of 500 MW in Ankara was opened on 20 August 2020 and on 11 November 2020, the annual production capacity of the factory was increased to 1,000 MW.
So far, within 1 year, the factory produced 1 million solar panels. 996 thousand of those panels were used in the 1st phase of the solar power plant in Konya Karapınar. The factory will gradually increase its production capacity.
2nd Solar YEKA Tender - cancelled
The tender announcement was made for the second solar YEKA tender on 5 October 2018 and the tender was planned to be held on 31 January 2019. On 13 January 2019, the tender for the second solar YEKA that was for 1,000 MW capacity was cancelled.
1st Onshore Wind YEKA Tender
Siemens Gamesa - Türkerler - Kalyon consortium won the tender with the lowest bid of USD 3.48 cent/kWh that was launched for 1,000 MW capacity on 3 August 2017. The 1000 MW capacity is dispersed as such: 406 MW in Kirklareli and 294 MW in Edirne, 160 MW and 90 MW in Sivas and 50 MW in Eskisehir.
The tender stipulated that upon signing the agreement, the winning consortium is required to construct a wind turbine factory in Turkey in the following 21 months in order to meet 65% local component requirement set by the tender specification.
On 8 November 2019, Siemens opened the wind turbine factory and R&D center with an investment of USD 100 million.
The consortium applied for pre-license of the 6 wind power plants for the regions listed above on 13 November 2018 and received the pre-licenses on 24 September 2020.
1st Offshore Wind YEKA Tender-cancelled
In June 2018, a YEKA tender for a 200 MW capacity Offshore Wind was announced to be held on 23 October 2018; however, the tender was cancelled.
2nd Onshore Wind YEKA Tender
The second onshore wind tenders for four 250 MW plants to be located in the western provinces of Balikesir, Canakkale, Aydin and Mugla were held on 30 May 2019.
A total of nine local and global companies participated in the 1,000 MW tender, which was held in a reverse auction.
• Turkish energy company Enerjisa offered the lowest price of $4.56 and $3.67 per kilowatt-hour of electricity production in Aydin and Canakkale, respectively.
• German Enercon offered the lowest price of $4 and $3.53 per kilowatt-hour of electricity production in Mugla and Balikesir, respectively.
The tender winners will be able to sell electricity for 15 years with a purchase agreement that will be effective from the date the YEKA tenure contract is signed. In the tender specification, the local component ratio is 55%.
On 5 November 2020, YEKA tenure agreement was signed.
3rd Solar YEKA Tender
The tender announcement for the third Solar YEKA was made in the Official Gazette on 3 July 2020.
According to the announcement, 74 competitions are to be held for a total capacity of 1,000 MW in 36 regions throughout Turkey.
As is known, the second solar YEKA tender was cancelled. Following this cancellation, there was a policy shift in the government from large scale renewable power plants to more dispersed and smaller scale power plants; in other words from mega YEKA tenders (such as 1,000 MW) to mini YEKA tenders. Energy Minister Fatih Donmez said the tenders are important for deploying more solar energy investments in the country, particularly for small to medium-sized energy sector enterprises.
The first part of 74 competitions started with the tenders held on April 26, 2021. It is important to note that this was the first set of YEKA tenders in which the competion was held in Turkish Lira terms rather than USD.
Competitions that were initially scheduled after 29 April 2021 have been postponed to the period after 17 May 2021 due to COVID-19 lockdown.
The postponed competitions were initiated on 24 May 2021 and completed on 27 May 2021.
3rd Wind YEKA Tender
The Ministry of Energy and Natural Resources (the “Ministry”) announced the third onshore wind YEKA tender on 29 May 2021. According to the announcement, the tender will be held on 12 October 2021.
A total capacity of 2,000 MW in 42 regions will be tendered. The bidding will be in Turkish Lira terms.
4th Solar YEKA Tender:
On 14 July 2021, the 4th Solar YEKA tender was announced. According to the announcement, the tender will be held on 30 March 2022. A total capacity of 1,000 MW will be tendered in 15 competitions.
