Wind YEKA Tender Was Held in August
Tender for the Wind Energy Renewable Energy Resource Area (YEKA) project highlights many important aspects of Turkey's domestic and renewable energy strategy. As the tender resulted in a world record feed-in-tariff, a policy mechanism designed to accelerate investment in renewable energy technologies, at $3.48 per kilowatt-hour (kWh) in Turkey offered by Siemens-Türkerler-Kalyon consortium, Energy and Natural Resources Minister Berat Albayrak announced, "Our current Feed-in-Tariff went down from 10.3 cents per kWh to 3.48 cents per kWh, making a new world record," on his official Twitter account. This price is calculated to be 40 percent below the Turkish spot market and 50 percent below the current incentive price.
After a comparison with global data, it was revealed that the tender set a new record in affordable electricity generation when compared to South Africa, Brazil and Mexico, which use a similar model in renewable energy, as the domestic model stipulates a stronger tender specification and requires less public finance.
The YEKA model is considered unique in renewable energy, with no other models set up to ensure a domestication rate higher than 65 percent and to provide for research and development (R&D) from the winning firms. The Dutch auction model requires a certain rate of domestication and is based on a long-term purchasing guarantee has been applied in South Africa, Mexico and Brazil. In the competitions held in these three countries, the long-term guarantee provided by the state was 20 years. Following the contract signing in Turkey, the YEKA model gave a 15-year purchasing guarantee, which includes the foundation of the factory and the production of wind turbines. In other words, the quicker the production, the better use of the purchasing guarantee for the contractors.
With regard to the domestication rate, Turkey's wind power tender has the highest rate in the world. While Brazil requires a local production ratio of 12 out of 24 for equipment, South Africa asks for a 74 percent domestication rate and Mexico lays out the local production of wings and towers as a condition. Last week's tender held in Turkey stipulated a 65 percent domestic production rate, including technological parts and other components.
Moreover, feed-in-tariffs -which offer long-term contracts to renewable energy producers based on the production cost of each technology- in South Africa, Brazil and Mexico were recorded at $4.71, $4.05 and $3.84, respectively. The 1 gigawatt wind tender in Spain, which has significant production facilities and brands in renewable technology throughout Europe, secured 4.3 euros ($5.06) for a feed-in-tariff. Therefore, the $3.48 feed-in-tariff in Turkey came in as a world record and reinforced trust in the country's domestic and renewable energy sector as well as in its economy.
Turkish-South Korean Consortium Wins $1.3 Billion Worth Solar Energy Tender in March, 2017
The consortium of Limak-CMEC-Hareon Solar, the consortium of the Kalyon-Hanwha Group, the consortium of Çalık Enerji-Solargiga and the consortium of the AKC and Güneş participated in the tender for Karapınar YEKA, which is to be built in the Karapınar Energy Specialized Industrial Zone owned by Energy and Natural Resources the Ministry.
At the tender, where the price cap per kilowatt was set at 8 cents, the Limak-CMEC-Hareon Solar consortium’s first submitted offer was 8 cents per kWh, while the Kalyon-Hanwha Group’s first offer was 7.95 cents. AKC and Güneş consortium offered 7.98 cents per kWh, while Çalık Enerji-Solargiga Group’s first bid was 7.99 cent After the withdrawal of the AKC and Güneş consortium in the 19th round of underbidding, the Kalyoncu-Hanwha Group consortium submitted the lowest bid of 6.99 cents per kWh. Previously, the AKC and Güneş consortium had offered 7.05 per kWh in the 18th round of underbidding.
The electricity generated from a 1,000-megawatt power plant, which will be constructed by the winner of the tender, will be evaluated over the purchase guarantee price offered for 15 years. Moreover, 100 permanent technical personnel will be employed at the Research and Development (R&D) center, which will be established within the scope of the power plant. Electricity production from the plant will start within 36 months after the equipment production plant is established.
Within the scope of the Karapınar solar power project, a plant with a production capacity of a minimum of 500 megawatts of photovoltaic modules per year will be built in Turkey and a capacity of 1,000 megawatts will be allocated to the Karapınar YEKA on the condition that research and development (R&D) activities will be carried out for the next 10 years.
The photovoltaic modules to be produced in the factory, which is to be built in the 21 months after the contract date, will be used in the field. The Karapınar YEKA-1 Solar Power Plant tender will be the first practice in the energy sector to be based on the condition of localization and YEKA-based price determination.
Solar energy offers significant opportunities for the Turkish economy, but Turkey, the second in Europe immediately after Spain in terms of solar energy potential, has been unable to fully develop this potential to date.
As of March 2017, the installed power of 820 megawatts of solar energy accounts for 1 percent of total electricity in the country.
This tender is the biggest initiative ever made for solar energy production in Turkey. The 1,000-megawatt solar power plant to be established will be Turkey’s first large-scale licensed solar power plant and will be an important step for Turkey to mobilize renewable energy potential.
Hanwha is one of the largest business conglomerates in South Korea. Founded in 1952 as Korea Explosives Co., the group has grown into a large multi-profile business conglomerate, with diversified holdings stretching from their original business of explosives to retail to financial services. Hanwha is providing practical solutions to real-world challenges, including sustainable energy, affordable housing and wider access to financial services.
In the energy sector, Hanwha Q CELLS is now the number one solar cell manufacturer in the world. Recently, it signed a record-breaking 1.5 GW solar module supply agreement with NextEra Energy Resources in the U.S.