After the annual decline in photovoltaic installations from 2017 to 2019, Turkey will only connect 672MW (AC) photovoltaic systems to the grid in 2020. There are multiple reasons for the decline in installations, such as high tariffs, currency devaluation, and the spread of the epidemic.
Although Turkey recently announced a 1GW photovoltaic tender, there is still a slim chance of achieving substantial installed capacity growth in 2021.
Customs policy “suppresses” imported components
Turkey, which was originally geographically superior, has excellent light conditions. According to the forecast of the International Energy Agency in 2019, Turkey will increase its renewable energy from 42GW to 63GW in 2019-2024, ranking 11th in the world and fifth in Europe. , Of which 75% of renewable energy installed capacity comes from photovoltaic and wind energy. However, the increase was much lower than expected.
In April 2020, the Turkish government announced new regulations on the import of photovoltaic modules. According to the new regulations, the import tariffs on photovoltaic modules will be calculated in kilograms instead of square meters. The development of high-power components has led to an increase in quality. The “unique” tariff policy further suppressed the share of imported components in the Turkish market. In addition to “charging per ton”, the Turkish government has imposed additional tariffs on photovoltaic modules made in China, disguising them out of the door.
Under the government’s protection policy, Turkey’s local photovoltaic module manufacturing industry has developed rapidly. According to a market report released by the Canadian consulting agency Stanteck, as of the beginning of 2021, Turkey’s photovoltaic module production capacity has exceeded 5GW. These include local manufacturers such as solarturk and GestEnrerji. Aerospace Machinery also has a 500MW photovoltaic module plant in Turkey. In addition to the production capacity of these component plants to supply Turkey’s own demand, about a quarter of the production capacity is exported to Europe and the Middle East. Since most of the photovoltaic supply chain is concentrated in China and Southeast Asia, it is obvious that the cost of local manufacturing in Turkey is slightly higher than the above two regions.
The tariff policy and the allocation of local production capacity have affected the overall development speed of the Turkish photovoltaic industry to a certain extent.
The project development process is complex and the participation of international energy companies is low
Also on the European continent, Spain and Portugal’s photovoltaic bidding has repeatedly attracted dozens of international giants competing for bids. The Middle East consortium, French Telecom, Jinko, Hanwha and other financing masters have repeatedly set the lowest electricity prices. However, in Turkey, there are very few projects involving foreign investment. On the one hand, there are few ground-based power station projects, small industrial and commercial photovoltaic and rooftop projects are not subsidized, and the rate of return varies with various factors and is not clear; on the other hand, it is due to administrative procedures. Complex and inefficient.
A senior person who has been engaged in the development of overseas photovoltaic projects for a long time said, “After 2018, we have paid less attention to Turkey. The requirements for the localization of products are particularly high, and the development process is not transparent enough, which often gets twice the result. Vietnam, the Netherlands, Poland and other emerging markets are more meaningful.” The person also revealed that a Chinese company had done some Turkish projects in its overseas plans, but after learning about the import policy of components made in China, it immediately cancelled This idea.
It is foreseeable that in a market lacking competition and transparency, it is impossible to support the important task of clean energy transition.
In addition to the two points mentioned above, currency devaluation and the outbreak of the epidemic have exacerbated the plight of photovoltaic development. Since the second half of 2018, the Turkish lira has depreciated more than 50% against the US dollar. In 2020 alone, the currency has depreciated more than 24%. It has become the world’s second most depreciated currency after the Brazilian real. Under the economic crisis, risk aversion has led to a further withdrawal of new energy investment. At present, Turkey’s green energy financing mainly relies on funding from international banks such as the European Bank for Reconstruction and Development and the World Bank.
After the outbreak, Turkey has confirmed more than 2.4 million cases and has become one of the more serious areas in Eurasia. In order to control the epidemic, the Turkish government has adopted blockade measures for many times, and restrictions on activities may continue until 2021.
Despite the slow progress, the Turkish government has introduced some promotion policies in the past two years, including the introduction of a photovoltaic residential net metering plan and new rules for unlicensed photovoltaic projects in May 2019, which to some extent stimulated 3-10KW self-use photovoltaic systems And the growth of small distributed power stations below 1MW. Although the planned start of 1GW photovoltaic in January 2019 was postponed to the beginning of 2021 and adjusted from the originally planned 3 photovoltaic power plants to 74 small photovoltaic projects, if it can be held as promised, it will provide one for the difficult 2021 A good start.
In addition, the Turkish government announced in January 2021 the fixed electricity price of the new renewable energy large-scale renewable energy incentive program, called YEKDEM for short, applicable to clean energy projects selected in the tender, starting from July 1, 2021 Compliant power plants put into operation on December 31, 2025 have a validity period of 10 years. Among them, photovoltaic and wind power projects will be eligible for a fixed electricity price of TRL0.32/kWh (4.4 cents/kWh). The price will be updated quarterly according to CPI and PPI, and adjusted with exchange rate changes. Hakki Karacaoglan, CEO of German KRC Consulting, said: “Turkey’s current round of updated electricity prices is difficult to stimulate new investment, but at least it provides a clearer perspective for the next few years.”
According to the forecast of the Istanbul Shura Energy Transformation Center in 2019, by 2026, Turkey’s photovoltaic installed capacity will reach 20GW. According to data from its power grid, by the end of 2020, the cumulative installed capacity will not exceed 9GW. An increase of 11GW in six years is not a particularly high number for any photovoltaic market in the energy transition, but it is indeed an unattainable goal for the Turkish government under the economic crisis.