Areas of opportunity

Could you give us some background into the Wind Renewable Energy Resources Area Project (YEKA)?

YEKA is the new investment model being employed in the Turkish wind energy sector. Currently, there are two main models of financing wind projects: one for small-scale and one for mid-sized ones. For the former, an investor needs to apply to a distribution company for a project of up to 1MW, seeking permissions from the distribution company and the construction company. For mid-sized projects of up to 100MW or more, investors have to measure the land for a year and apply to Energy Market Regulatory Authority (EMRA). The Ministry of Energy currently supports renewable energy projects using local equipment. In line with this, it established a third model for large-sized projects in which one applies directly to the Ministry of Energy and the General Directorate of Renewable Energy. The first wind YEKA projects are being developed for five regions across the country, with the Ministry of Energy defining a 1,700MW wind capacity overall. For this type of project, applications should be submitted to the General Directorate of Renewable Energy, and the ministry will then allocate projects according to priority. The requirements for these projects are to be developed using 65% equipment manufactured in Turkey and for companies to open R&D centers of engineers, at least 80% of who must be Turkish nationals. The wind turbine factory must be completed and operational within 21 months. At the end of the day, investors in YEKA should be able to produce a 1,000MW project.

How has the YEKA project been progressing in recent months?

Siemens Gamesa Renewable Energy, Kalyon Construction, and Türkerler Energy have formed a tripartite consortium for the YEKA project. Siemens is working hard on the turbine factory, while Türkerler is working on the project development side. Like other consortium companies, these companies applied to the General Directorate of Renewable Energy for this project and evaluated it to ensure they were able to produce 1,000MW according to the priorities laid out by the ministry. Currently, the companies are doing research on the most appropriate region where the factory will be built, and it is expected that Izmir will be chosen.

What is the Turkish Wind Energy Association’s involvement in such projects? How do you work with the government and private sector to attract the right investment?

Given that our main aim is to promote renewable energy and especially wind in Turkey, we are extremely active in the sector in both the government and private sector side. We are working to bridge the government and the private sector, enabling discussion of problems and brainstorming solutions together. We organize workshops, congresses, and technical site visits, as well as organize delegation participation from the government to various conferences. We have estimated that our wind potential is 38GW onshore and 10GW offshore, according to the General Directorate’s 2006 measurements. However, these calculations and the technology used are already outdated. If we account for the current advancements in wind energy, our potential is more along the lines of 70GW for both onshore and offshore combined. This means that in the coming years, the wind energy sector will rapidly develop. In 2017 there was a significant milestone achieved in Turkey, in regards to YEKA. In total, 4,000MW of capacity allocated to projects were awarded in 2017, amounting to USD5 billion invested in wind energy projects. However, making these projects in reality will take time. The project owners are currently working hard on securing their pre-licenses. After those are acquired, they will begin receiving construction licenses, which will take two to three years. These projects will be realized completely by 2020.

What are the main obstacles to investing the wind energy, and renewables more generally in Turkey?

In 2005, Turkey’s installed wind capacity was only 20MW. After the enactment of the Renewable Energy Law in 2005 the wind energy sector began to grow rapidly. A second set of regulations came after to develop sector and investment started to increase. Turkey also had economic conditions internationally that affected the sector. However, in the past seven years, the sector has been growing by approximately 25-30% a year. In 2016, Turkey broke the 1GW barrier for the first time, installing 1,387MW of new wind energy. In 2017 by adding 766MW into the system, Turkey was ranked fourth in the European market and eighth worldwide in annual wind capacity.

What are the main factors that differentiate the local energy market from its neighbors, and what opportunities are there for international collaboration?

Looking at the Turkish experience in wind energy, our companies tackle increasingly challenging opportunities. The MENA region has considerable potential in renewable energy and many opportunities to be found. We also see a great deal of potential in Turkic countries and partner closely with those countries. Turkish companies are also looking at South Africa as a potential market. Turkish construction companies have already been extremely active all over the world. In fact, they are second only to China in terms international activity and the number of foreign partners. Therefore, Turkish companies already have a great deal of experience abroad, and that trickles down to some companies in the renewable energy sector.

Will the YEKA initiative have a lasting impact on the energy sector at large?

YEKA is an excellent project to develop the wind industry. However, through mid-sized wind projects and legislative improvements Turkey has already begun to develop its wind industry so the sector has to operate not only according to YEKA, but also EMRA. YEKA projects are all large-sized projects, and we need to make sure investors are encouraged to invest in medium and small projects as well. If we can keep both investment models in parallel, the energy market will be significantly improved in Turkey. That would make a more sustainable market. One way that the industry aims to do this is by supporting local companies in their medium-scale ventures, as opposed to focusing solely on international ones.

What are your priorities for the year 2018?

Our priorities for 2018 are to develop more projects in Turkey. On the wind side, we have more than 70GW of potential here. On the other hand, we have excellent potential in solar, perhaps the same or more than in wind. As well, we have hydropower potential, with three sides of Turkey bordered by the sea and many rivers. There is also excellent potential in geothermal and biofuel. When we look at both together, renewable energy presents great opportunities