Analysis - GE targets Turkish wind sector

TURKEY: Considering Turkey's strong wind resources, sustained economic growth and brisk demand for energy in general, it is not surprising the country's wind energy sector is being targeted by GE.

GE's 1.6MW turbine
GE's 1.6MW turbine

Last month wind energy was among the sectors GE identified alongside healthcare, aviation, transportation and gas-fired power projects under a three-year $900 million investment commitment in the country first unveiled in 2012.

Last month, GE revealed that it had already invested some $515 million of the total. In wind, the 50:50 Gama Enerji joint venture between Turkish firm Gama Holding and GE Energy Financial Services in August reached financial close on the 35MW Gök II wind farm in Akhisar. The project is set to become operational in 2014 and will bring the venture's wind capacity in the country to 67.5MW. Gök II will use GE's 2.75-103 wind turbines.

"Turkey has been a steady and stable market in terms of new wind capacity, with about 500MW installed in each of the last four years, and it has the potential to be a market of at least 1,000MW a year," said Pierre Viallefond, GE Power & Water renewable sales director for EMEA markets. While the country's official target for 20GW of wind power by 2023 is ambitious, Viallefond believes it is not an impossible goal.

Last year, GE installed about 160MW of its turbines on Turkish wind projects, making it the market leader for new capacity. "We will remain a market leader moving forward," said Viallefond.

According to first-half 2013 figures from the Turkish wind energy association, GE ranks fourth in the country for cumulative capacity, with a 17.2% market share of the 2,619MW total. The contest among wind manufacturers in the country is close, however, with Vestas number one in the cumulative ranking with 25.3%.

As it commits to Turkey's wind market, GE has reached agreements with suppliers to produce both blades and towers locally. This means investors can benefit from the $0.087/kWh feed-in-tariff (the base FIT is $0.073/kWh) foreseen when blades and towers are made in Turkey, although high merchant power prices have meant investors have still preferred to take on merchant risk. Nonetheless, Viallefond said the ability to produce blades and towers locally, and a higher potential FIT, increase confidence among lenders financing projects and has other benefits. "Transportation costs fall, and it improves the economics of a project," he noted.

To date, GE has purchased morethan $75 million in blades and towers in Turkey, a quarter of which has been exported to projects elsewhere in Europe. GE currently has no plans to produce other turbine parts locally, but Viallefond says that could change "should we see enough volumes and a possibility to lower the cost of energy".

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