Recently, the Turkish government announced a new version of the fixed electricity price mechanism.
According to the new mechanism, large-scale photovoltaic and wind power projects identified in Turkey’s public bidding will enjoy a fixed price of US$0.044/kWh; hydropower and geothermal projects will receive a fixed price of US$0.055 and US$0.075 per kWh, respectively. The above prices will apply to all renewable energy power plants that will be put into operation from July 1, 2021 to December 31, 2025.
It is understood that the Turkish government launched a feed-in tariff plan in 2010 to encourage the development of local renewable energy by providing preferential electricity prices for renewable energy power generation projects. The plan was originally set to end on December 31, 2020, but in September last year, the Turkish government postponed the deadline to June 30, 2021, which means that all renewable energy power generation companies that have won bidding before this date will Obtained a 10-year fixed price power purchase guarantee.
According to the official statement of the Turkish government, the feed-in tariff will be updated quarterly based on the consumer price index, producer price index, and exchange rate changes.
Hakki Karacaoglan, CEO of KRC Consulting in Germany, said that the updated electricity price estimates will not be very helpful in stimulating new investment, but price changes may provide a clear direction for the next few years.
Many research institutions believe that Turkey’s new version of the fixed electricity price mechanism may further promote its renewable energy power market demand.
According to the International Energy Agency’s forecast, Turkey’s installed renewable energy capacity will increase from 42 GW to 63 GW from 2019 to 2024, an increase of 50%. Among them, 75% of the renewable energy installed capacity will come from photovoltaics and wind power, and the installed capacity of photovoltaics will increase from 5.1 GW to 15.2 GW.
In the past two years, the development of the Turkish photovoltaic industry has not been smooth, and the scale of new installed capacity has been showing a downward trend. Especially since last year, due to the impact of the new crown pneumonia epidemic, the signs of decline in the Turkish photovoltaic industry have become more obvious.
Renewable energy electricity prices are the main means for Turkey to promote the development of the local renewable energy industry in the future. The launch of a new round of electricity price mechanism means that Turkey hopes to start from the market and continue to boost market demand and the proportion of renewable energy power generation.