Turkey takes #15 place by the experienced developments in the electricity sector

The electricity generation capacity based on the new solar energy is growing at a rapid pace in the emerging markets. According to the comprehensive Climatescope Survey, which deals with clean energy activities in key emerging countries by Bloomberg New Energy Finance (BNEF), behind this growth lies low-cost equipment and innovative applications that provide millions to access energy. Turkey, evaluated within the scope of Climatescope for the first time, achieved 1.58 points in 2017 and took 15th place among 71 countries assessed in the Climatescope.

Installed solar power rises 1.5 times in emerging countries

According to the annual ClimateScope Survey released at the BNEF Energy Future Summit in Shanghai, new solar power plants with a total installed capacity of 34 GW were introduced in 71 developing countries observed by BNEF in 2016. The installed capacity of the new solar power plants was 22 GW in 2015 and 3 GW in 2011. Total cumulative installed solar energy power increased by 54 percent in one year, while it increased at least three times in three years. The installed power installed only in 2016 is sufficient to cover the total annual electricity needs of 45 million homes in India or all residences in Peru or Nigeria.

A large portion of the 27 GW added in 2016 is by far in China. Significant growth in other countries has also been observed. While India added 4.2 GW, Brazil, Chile, Jordan, Mexico, Pakistan and 9 other countries increased their photovoltaic power by at least two folds in 2016. Generally speaking, solar energy accounts for 19 percent of all new electricity production capacity added in Climatescope countries last year. This rate was 10.6 percent in 2015 and 2 percent in 2011.

Today, more than 1.5 million homes in Africa use a home solar power system purchased with a mobile payment financing plan. By the end of 2015, this figure was only 600 thousand. In Africa’s solar energy financing market, this business model has evolved beyond of being a niche model and has achieved some of its biggest deals this year. This combination of solar energy, ultimate consumer financing, and intelligent technology extends beyond homes to farms and hubs. For example, the number of solar-powered irrigation pumps in India has increased from 12,000 in April 2014 to 128,000 in May 2016.

Commenting on the issue, Ethan Zindler, BNEF Director of the Americas, said, “Reflections of the great decline in photovoltaic module prices continue in developing countries. It creates many opportunities from million-dollar projects that provide electricity to the grid to small-scale installations that allow farmers to increase yields with better irrigation systems and to connect internet.”

Figure 1: New installed solar power plant power (GW) in Climatescope countries

Situation in Turkey

According to the information provided in the report, Turkey’s government has launched an ambitious electricity market reform aimed at the privatization of the sector to reduce the country’s dependence on imported fuels, and the use of indigenous energy sources. This goal is particularly lignite-focused, but renewable energy is also an important part of the goal. The government set the capacity targets of 2023 and 2030 to meet the projected demand increase. In Turkey, natural gas was the main source of electricity generation by 2015. Coal and lignite exceeded the 32 percent of natural gas in 2016, accounting for 34 percent of electricity production. The share of hydroelectricity in electricity generation was 25 percent, while the remaining 9 percent was derived from wind energy, other renewable technologies, and liquid fuels. Turkey, by 2023, aims to have 20 GW of wind energy, 5 GW of solar energy and 1 GW of installed geothermal power. In Turkey, the targets set for large hydroelectric power plants, defined as renewable energy, is 34GW. The realization of these goals will ensure that at least 30 percent of electricity generation is from renewable sources. There is a target of utilizing all domestic coal resources and reach 30 GW of installed power until 2023, to reduce Turkey’s dependency on imported energy.

Despite the abundance of resources, the breakthrough in the licensed photovoltaic sector is hampered by high license fees

To promote the domestic production sector, Turkey provides additional incentives in case of the use of domestic equipment, and this support can be up to 70 percent of all grants. The local component condition also had a great importance in the first big Renewable Energy Resource Area (YEKA) tender, which had been announced in 2016 and finalized in April 2017. The firm will be paid $ 6.99 / MWh for 15 years. Such large central tenders will constitute an important source of additional solar and wind power projects. Despite the abundance of resources, the licensing of the photovoltaic sector in the grid scale has been hampered by high license fees. Only 13 MW have been commissioned so far within the solar energy project of the 600 MW installed power, which was already contracted in 2013. Since the tariff guarantees are in dollar terms, the recent depreciation of the TL against the dollar and the fall in panel costs could lead to projects being feasible again, and an increase in the number of projects introduced. Because of the difficulties in licensed projects, almost all growth lived in the unlicensed sector, where developers found a gap in legislation to implement projects on a grid scale. In response, the government tightened legislation in 2016. It is anticipated that activities in this segment will slow down after 2018 and that only self-consumption projects that are less than 1 MW, that is, the intended projects, will remain.

To achieve the 2023 targets, Turkey needs to commission 2 GW of installed wind power projects in each year. It seems pretty hard. The application for the license of the 2 GW installed power project was delayed twice from April 2016 to April 2018. Project development opportunities are extremely limited, except for the 1 GW YEKA wind procurement, which was held in August 2017 and brought domestic material requirements. This tender attracted great interest from all major wind turbine manufacturers and the tender was awarded a fixed $ 3.48 / MWh for 15 years. Turkey imports the majority of the natural gas from Russia, Iran, and Azerbaijan through pipelines and from Nigeria and Algeria in LNG form. Some of the need is also covered by Spot LNG imports. TANAP, which will carry gas from Azerbaijan to Turkey and Europe, is expected to be operational in 2020. Construction began in 2015.

Turkey is also up to 12.5 GW by 2023, it plans to build a nuclear power installation but some irregularities occurred in concepts of the three planned nuclear power plant. Of these three power plants, only 4.8 GW of power plant financed by Russia came close to the construction phase, but there were delays in this plant and it seems unlikely to be commissioned before 2025. In addition, Turkey has reached the phase to be integrated into the electricity network of continental Europe and will be a full member of European Transmission System Operators Union within a short time period. During the effort to liberalize the market, the government privatized all 21 distribution companies. There was a completely competitive retail market anticipation for this year, but there was not enough improvement.

Turkey’s Intended Nationally Determined Contributions (INDC) has set a target of a reduction in greenhouse gas emissions by 21 percent until 2030, according to the 2012 reference scenario. 70 percent of Turkey’s emissions comes from the energy sector and therefore, the priority given to coal-fired power plants in the coming years, is making it harder to achieve these goals.

Turkey Cimatescope 2017 Summary

Turkey took 15th place in Climatescope 2017, which was the first time she evaluated in the context of Climatescope, among 71 countries that are assessed with 1.58 points. Turkey’s electricity sector over the past 10 years, has undergone a tremendous reform that contains the separation and partial liberalization of all market segments, including power generation and distribution. Low Carbon Companies and Clean Energy Value Chain (Value Chain parameter) was the area that Turkey collected the highest points. Turkey scored 1.30 in the area of the Facilitating Legal Framework and took 33rd place. Turkey achieved this score with her clean energy goal, energy tenders, and feed-in tariffs. Newmarket reforms and the fact that the system was relatively open to independent power producers also supported her rating. Installed clean energy power production increased by 2 GW in 2016, to 14.5 GW.

Turkey takes 9th place in Value Chain world rankings

Clean Energy Investment and Climate Finance of Turkey becomes 20th in the world. New fund flows to the sector reflected in the pivot – In 2016, approximately 1.6 billion US dollars were invested, mostly in wind and geothermal, and the total investment increased by 17% since 2012 to the US $ 10.8 billion.

Value Chain of Turkey showed a good performance and took the 9th place in world rankings, thanks to the advanced clean energy sector. In Turkey, there are 36 different types of supply chains and 20 different type of service suppliers in a range from production and distribution of biofuels to wind turbine blades manufacturing. In contrast, banks are the only financial institutions that provide financial services to the sector. Turkey took 29th place in Greenhouse Gas Management of the activities. Turkey scored that point for Intended Nationally Determined Contributions (INDC) which has a set target of a reduction in greenhouse gas emissions by 21 percent according to the 2012 reference scenario.

For detailed information related to the report: (www.global-climatescope.org)