The aim of this chapter is to contextualise renewable energy in Turkey, including the role and potential of renewable energy sources in Turkey’s climate strategy. Furthermore, the renewable energy policies, legislations and contribution of specific renewable energy sources to Turkish power generation will be analysed. Additionally, the environmental impacts and the social acceptance and public perception of each renewable energy source will be addressed.
The utilisation of renewable energy resources has become inevitable worldwide. This is not only because of the peak oil and termination of fossil fuel era, but also due to the unprecedented pressure of human dominated activities on the planet. The Earth is being battered by humanity from every direction: The extinction of species, rising greenhouse gas emissions, ocean acidification, chemical pollution, land use change and rising freshwater consumption. With regard to these serious planetary changes, the governments and global organisations have started to develop renewable energy policies and implement various support mechanisms, obligations and incentives to implement the energy transition from fossil to post-fossil energy era. The most commonly used renewable energy policies are as follows (Arioglu Akan, et al., 2015 S. 16379–407):
a) Capital subsidy: The subsidy covers a share of the upfront capital cost of an asset (such as solar water heater).
b) Feed-in premium: Producers sell generated electricity from renewable energy sources at market prices and a premium is added to the market price to compensate for the higher costs and financial risks of the production from renewables.
c) Feed-in tariff: A minimum price per unit is guaranteed over a fixed time period when electricity can be sold and fed into the network.
d) Fiscal incentive: An economic incentive, which provides individuals, households or companies with capital subsidy, grants or rebate, as well as reductions, value added taxes or other taxes.
e) Investment tax credit: Allows investments in renewable energy to be either fully or partially deducted from the tax obligations. f) Mandate/obligation: A measure that requires consumers, suppliers and generators to meet a minimum target for renewable energy, such as a percentage of total supply. g) Production tax credit: A measure providing the investor or owner of a facility with an annual tax credit based on the amount of generated renewable energy by that facility. h) Renewable energy certificate: A certificate awarded for the generation of one unit of renewable energy (1 MW hour of electricity). i) Renewable energy target: A goal set by a government to achieve a certain amount of renewable energy in the future.
j) Renewable portfolio standard: This represents an obligation set by a government on companies or consumers to provide or use a predetermined minimum renewable share of installed capacity or of electricity.
As for Turkey, renewable energy target, feed-in tariff and biofuels obligation/mandate have been used as regulatory policies and targets (Arioglu Akan, et al., 2015 S. 16379–407). As a member of the OECD and candidate country of the EU, Turkey is one of the developing countries with a substantial potential for wide range of renewable energy sources. The country has one of the highest hydropower, geothermal, solar and wind energy potentials among the EU member states. Nevertheless, current energy policies of Turkey are jeopardising the development and utilisation of renewable energy sources in a sustainable and efficient way. The country is strongly dependent on fossil energy imports. By the end of 2015, renewables contributed 15.7 mtoe of country’s total energy production, which represents 12.1% of total energy supply of Turkey, which came from hydro (4.4%), geothermal (3.7%), biofuels and waste (2.5%), wind (0.8%) and solar (0.7%). The electricity production from renewable energy sources reached 83.8 twh, which represented 32.2% of total electricity generation (IEA 2016). The remaining energy supply was came from the fossil energy imports, predominantly natural gas imports from Russia. Moreover, Turkey’s energy demand has been increasing rapidly over the last decades, which has had a negative impact on the
country’s economy as a result of high amount of fossil energy imports. The inefficient and high use of fossil fuels creates air pollution and raises the greenhouse gas emissions of Turkey. 5.1. Renewable Energy Legislation and Regulations in Turkey Based on the previously stated energy situation of Turkey, energy efficiency has become a crucial issue in the energy agenda of the Turkish MENR. Therefore, on April 5th 2001, the Turkish Government ratified the Energy Charter Treaty and the Protocol on Energy Efficiency and Related Environmental Aspects, as well as committing to formulate and implement policies for improving energy efficiency and reducing the negative environmental impacts of the energy cycle. Turkey’s energy efficiency policy is guided by the ‘Energy Efficiency Law No. 5627’, which came into force in 2007. This specific Law has set “the legal framework for energy efficiency and prevention of the wasteful use of energy in order to reduce the burden of energy costs on the economy and protect the environment” (MFA, 2017). To establish a road map for the implementation, the MENR prepared an ‘Energy Efficiency Strategy’, approved by the High Planning Council on February 20th 2012. The main goals of this strategy are highlighted as: A reduction of energy density by 20% per GDP until 2023, energy losses in industry and service sectors, decreasing energy demand and carbon emissions of buildings, providing 30% of total electricity production from renewable energy, efficient use of energy in the public sector, strengthening of institutional structures, capacities and cooperation, employing advanced technologies, increasing awareness-raising activities and creating alternate financing sources than public sources (EC, 2016). It is mandatory to coordinate ‘Energy Efficiency’ measures throughout the country and between the relevant public and private institutions in order to accomplish a strong institutional capacity in the sector.
Currently, Turkey produces 20% of its total electricity supply from renewable energy sources and plans to increase this rate to 30% by 2023 (MFA, 2012). The country’s intended nationally determined contribution, adopted in September 2015 ahead of the Paris COP21 Conference, contains decisive targets of 16 GW for wind and 10 GW for solar in 2030. The wind target is below the intentions set out in the 2009 Strategy (20 GW) and the solar target is much lower than the solar potentials in Turkey (IEA, 2016).
Turkey has also made concrete steps regarding the increase of energy efficiency. Through Turkey’s Council of Ministers Decree, Number 2014/6058 (published in the Official Gazette on May 09, 2014 with number 28995), several amendments have been made to the implementation of the current investment incentive system, also relating to the energy efficiency issue. According to this decree: “investments aimed at energy efficiency i) which are realised in existing manufacturing industry plants having a minimum 500 tons equivalent petroleum energy consumption and provide a minimum 20% power savings per unit, and ii) the investment return of which is a maximum of 5 years” (Pekin & Pekin, 2016) will be benefited from the incentives. According to the European Commission’s 2003 and 2005 projects (which were designed for Turkey’s Accession Partnership programs), respectively titled “Improvement of Energy Efficiency in Turkey” and “Increasing Public Awareness on Energy Efficiency in Buildings”, a person in Turkey is consuming two or three times more energy (per m2) for heating, than people in countries such as Germany or France. This situation poses both financial and environmental challenges. Currently, there are ongoing discussions in the Energy Commission of the National Assembly of Turkey regarding a new Draft Energy Efficiency Law and an amendment to National Purchasing Law.
In 2005, Turkey has adopted the basic legal framework for the renewable energy (Law on Utilisation of Renewable Energy Sources for the Purpose of Generating Electrical Energy No. 5346, YEKA Law (in Turkish: Yenilenebilir Enerji Kaynak Alani), which supported hydro, wind, solar, geothermal, biomass, biogas (including landfill gas) and wave, current and tidal energy. As indicated in the Turkey Review 2016 report of the IEA, “the Law provided for the choice between direct sales of renewable electricity into the spot market versus a general feed-in tariff, and included supplier obligations to purchase renewable electricity, priority connection, and exemptions from license obligations for small generators (0.5 MW), as well as reduced fees for land acquisition and project preparation” (IEA, 2016).
In 2011, Turkey enacted its very first Renewable Energy Support Mechanism (Yenilenebilir Enerji Kaynaklari Destekleme Mekanizmasi - YEKDEM). The goal of this mechanism was to increase and diversify the use of renewable energy sources without interrupting free market conditions. Furthermore, a gradual reduction in greenhouse gas emissions, efficient waste utilisation, better environmental protection and development of the necessary manufacturing sectors are targeted (Arioglu Akan et al. 2015). Concordantly, the power plants, which have been in operation since May 18th
2005, or that will come into operation before December 31st 2015, will be eligible to receive the following feed-in-tariffs for the first ten years of their operation. The new law also brought some incentives, such as licensing, land appropriation and purchase guarantee through a constant feed-in tariff (Arioglu Akan et al. 2015).
In December 2004, Turkish government presented the National Renewable Energy Action Plan for the period 2013-2023, in line with the methodology of the EU Renewable Energy Directive 2009/28/EC. Based on this directive, the National Renewable Energy Action Plan asserts that “Turkey had a 13.5% share of renewable energy in gross final consumption in 2013 and needs to reach 20.5% by 2023” (IEA, 2016). Other targets, regarding the utilisation of renewable energy sources, set by the Action Plan, are listed as follows (IEA 2016): Ø Lifting up installed power to 120,000 MW Ø Full utilisation of all economically feasible hydropower potential for generating electricity to reach 34,000 MW Ø Increase installed power generation capacity of wind up to 20,000 MW.
Ø Expansion the use of solar power in electricity generation to utilise Turkey’s abundant potential to reach 3,000 MW Ø Utilisation all of 600 MW of geothermal electricity potential in Turkey Ø Implementation of support mechanisms for biomass use of 1,000 MW Ø Achieving a 10% share of renewable energy use in the transport sector. Ø Extending the length of transmission lines to 60,717 km Ø Extending the use of smart grids Ø Reaching a power distribution unit capacity of 158,460 MVA Ø Raising the natural gas storage capacity to 5 bcm
In January 2015, Turkish Ministry of Energy and Natural Resources released a 2015-2019 Strategic Plan. The adopted Strategic Plan for the period 2015-2019, targets the expansion of renewable energy sources to 30% of total energy production by 2030. To reach the designated 2023 energy targets set by the Turkish MENR, appropriate support and incentive mechanisms must be formed within Turkey's New Law on Renewable Energy Sources: 1) Feed-in Tariff Mechanism, 2) Unlicensed Generation, and 3) Local Content Support.
1) Feed-in Tariff Mechanism: To use its renewable potential and support the contribution of renewables in total electricity generation, Turkey enacted the
“Amendment Law to Utilisation of Renewable Energy Resources for the Purpose of Generating Electrical Energy No. 6094” in 2011 (IEA, 2016). The law provides feed-in tariffs to renewable energy producers for a maximum term of 10 years from their operation date. Each year the investor may choose between the feed-in tariff and direct sales in the power market. In this context, feed-in prices for hydroelectric and wind power-based generation facilities are fixed up to US$7.3 per kwh, geothermal energy- based generation facility to US$10.5 per kwh, biomass energy-based (including landfill gas) and solar energy-based generation facilities to US$13.3 per kwh (Table 10). Adding local content to the project will bring an additional US$23-92 per MWh per project for five years. Furthermore, there is a spot market, which can function as an alternative sales point for renewable energy generators (Energy Charter Secretariat 2014). Table 10. Feed-in Tariff Mechanism in Turkey Type of power plant facility Feed-in tariff ($/kwh) Maximum local production premium ($/kwh) Maximum possible tariff ($/kwh) Hydroelectric 7.3 2.3 9.6 Wind 7.3 3.7 11 Geothermal 10.5 2.7 13.2 Biomass (including landfill) 13.3 5.6 18.9 Solar photovoltaic 13.3 6.7 19.5 Concentrating solar 13.3 9.2 22.5 Data source: Own illustration based on the data from (pwc, 2012). 2) Unlicensed Generation: Real and legal entities which are generating electricity from renewable energy-based production facilities with a maximum installed capacity of 1 MW, can benefit from the above scheduled feed-in prices in the case that they supplement surplus electricity back into the distribution system. Within this framework, distribution companies, having electrical retail sales licenses, must purchase this energy within the context of Renewable Energy Support Mechanism (Kaplan, 2015).
3) Local Content Support: This support is considered as an extra bonus and shall be added to the feed-in tariff of relevant renewable energy resources to encourage the utilisation of renewables. In the case of usage of local mechanical or electronic equipment in generation facilities, commissioned before 31st December 2020 and subject to the Renewable Energy Source Support Mechanism, a local equipment bonus
shall be added to the feed-in tariff, relevant to this renewable energy source (Kaplan, 2015).
4) Biofuels Obligation/Mandate: Within this policy, the designated parties are