There are 16 projects, representing 917MW, that are eligible to receive a licence, EMRA announced in September. Most of the other projects will have to enter a competitive tender process to bid for connection rights. Turkey's installed capacity currently stands at around 1.3GW against a target of 20GW by 2023.
The licensing problem dates back to November 2007, when EMRA briefly opened its doors to applications. The number of responses took everyone by surprise and, since then, the authorities have been trying to work out how best to handle the task. In February, they announced the selection would be based on available grid capacity and that more than 7GW was up for grabs (Windpower Monthly, June 2010).
Applicants were invited to reapply, with an option to choose a different substation and modify the project size. This, in addition to around 10GW of projects that dropped out or were rejected for environmental reasons, has cut the applications to 695 projects with a combined capacity of 31.3GW (see table).
Taking the lowest hanging fruit first, EMRA then picked out those that did not compete for grid access. It identified 63 such projects, with a total capacity of 1.4GW, which it says will be directly licensed without entering into the competition.
EMRA considers 16 of these, representing an estimated investment of TRY 2.5 billion (EUR1.26 billion), eligible to receive a production licence. The regulator should issue these in the first half of next year. The remaining 47 individual projects are still being evaluated.
There are 616 projects with a combined capacity of 29.2GW, which EMRA says are competing for access to specific substations. The owners will be invited to bid for the connection rights in alphabetical order according to the name of the substation. The Turkish Electricity Transmission Corporation (TEIAS) will award the grid permit to the highest bidder for a 20-year term. The winners must then present a bid bond of TRY 10,000/MW (EUR5,035/MW) to TEIAS. Once the project is up and running, they will pay their bid price, adjusted for inflation, to TEIAS in January each year.
Murat Durak, chairman of the Turkish Wind Energy Association, expects the auctions to start in the next three to six months, with the first results known by the end of 2011. Others are less optimistic. Sule Erkoc, head of GL Garrad Hassan's Turkey office, fears the regulations surrounding the tender will change over the coming months because there are still too many unknowns.
Erkoc is also worried that some candidates will bid too high because they do not have reliable wind data. "How can they bid without knowing the measurements?" she asks. Or they may simply bid high to get the permit, perhaps in the hope of selling it later. Gokhan Andi, senior wind developer at RES Anatolia, agrees. "Candidates need to be very careful about how much they bid," he warns. "Many applicants who are inexperienced think it is a cash cow."
The risk, of course, is that candidates who propose an unrealistically high price will not be able to secure financing, and will therefore block the site or lose money once the plant is operating.
Another complicating factor is that there is still no news about whether the government will increase the guaranteed purchase price for wind power. At present all renewable generation is eligible for a tariff of EUR0.050-0.055/kWh. The original draft of the long-promised revision to the renewable energy law proposed a hefty increase to EUR0.08/kWh for wind energy (Windpower Monthly, March 2010). This now seems highly unlikely and there are increasing signs that the tariff will not go up at all.
Producers do not sell at the government tariff because they can get around EUR0.07/kWh on the open market or through bilateral agreements. However, the tariff plays an important role as a guaranteed minimum price when securing finance.
In addition, there is still no sign of the revised renewable energy law. There are vague murmurings that it will be debated in the current session of parliament, but this is by no means certain. Top priority will go to amendments being made to the Turkish constitution. Then there are national elections coming up next year, which may delay things yet again.
The Turkish authorities are still working their way through the new
applications for licences
Status Number of MW projects
Total applications remaining, September 2010 695 31,268
Multiple applications, subject to tender 616 29,152
Individual projects eligible for licence 16 917
Individual projects still being evaluated 47 461
Other projects still being evaluated 16 738