Realización de Casos de Uso del Negocio

57 The values are available in the corresponding study.

Year

United States 2510 2500 0% 62 61 0%

Europe 1790 1630 -0.4% 46 41 -0.5%

United States 1890 1710 -0.5% 47 42.8 -0.5%

Europe 2490 1440 -3% 25 22 -1%

United States 3000 1730 -3% 32 28 -1%

Europe 2980 2820 -0.2% 60 56 -0.3%

United States 2090 1890 -0.5% 42 38 -0.5%

Europe 2380 2170 -0.4% 83 76 -0.4%

United States 2500 2320 -0.3% 87 81 -0.3%

Biomass

55 Furthermore, the fixed O&M⁵⁸ cost of hydropower plant is taken as 2.5% of the of the average specific investment cost (i.e. 53175 $/MW_el-y) according to the given information in the report “Renewable Power Generation Costs in 2014” by International Renewable Energy Agency (2015, p. 118). Finally, the economic life time is taken as 50 years.

Table 12- The examples of realized hydropower investments in Turkey (own illustration)

In Figure 19, the distribution of the hydropower plants in Turkey w.r.t. their FLHs of operation are illustrated. The distribution of the FLHs is based on the annual average amount of electricity generation and the installed capacity of power plants as indicated in the generation license of the corresponding power plants. In the figure, the count of FLHs corresponds to the number of FLHs which lies in the same given range. In total 358 hydropower plants are considered for the analysis and the majority of them lie in the range of 3500 FLHs of operation. Further, about 41% of them can operate in the range of 3000-4000 FLHs and around 30% of them can operate at more than 3000-4000 FLHs. The difference in the magnitude of the FLHs of the corresponding power plants is not only related to the amount of annual precipitation but also related to the size of their reservoirs. The hydropower plants with large reservoirs can operate at higher FLHs than the ones having relative less or even no water storage capability.

58 For hydropower plant, the fixed O&M cost per MW per year is given as the aggregation of the fixed and the variable O&M costs per annum (i.e. called O&M).

Hydropower Plant Project

Installed Capacity [MWel]

Specific Investment Cost

[$/kW_el]

HPP 1 2 2500

HPP 2 7 1762

HPP 3 19 1575

HPP 4 60 2393

HPP 5 170 2403

Average 2127

56

Figure 19- The distribution of the hydropower plants in Turkey w.r.t. their FLHs of operation (own calculation &

illustration according to EPDK)

In Figure 20, the results of the analysis⁵⁹ on the technical⁶⁰ hydropower potential and the related categorized FLHs are represented for Turkey and some of other examined countries.

The corresponding analysis is carried out through the simulation of the hydropower generation which is dependent on the simulated daily hydro discharge data⁶¹ for different rivers (Resch, et al., 2015, p. 42). Accordingly, Turkey possesses the highest technical hydropower potential among the examined countries; however the quality of the hydropower resources is especially lower than in Norway (NO) and in Sweden (SE) due to the variation in hydrological conditions in different seasons. More specifically, about 30% of the technical potential is estimated to lie in the range of 2992-3846 FLHs of operation and about 70% of it is estimated to lie in the range of 2138-2992 FLHs. The represented analyses in Figure 19 and in Figure 20 indicate different ranges of FLHs of operation; since the corresponding analyses are dependent on different type of assessments and data set for hydropower generation;

however it can be inferred from both of the analyses that hydropower plants operating more than 4000 FLHs depend on rare high quality resources.

59 The analyses are conducted by the energy economics group of Vienna University of Technology, in the course of the aforementioned project Better. The analyses are conducted based on the hydrological conditions and the technical capability of available hydropower technologies. The details of the study can be found in the report

“Bringing Europe and Third countries closer together through renewable Energies” by Resch et al. (2015) and also in the workshop presentation by Ortner (2014).

60 See subsection “Hydropower Energy Potential of Turkey” for more information on the technical hydropower potential.

61 The data is mentioned to be obtained by the E-HYPE 2.1 tool of the Swedish Meteorological and Hydrological Institute.

57

Figure 20- The technical hydropower potential and its categorized FLHs in Turkey (TR), Norway (NO), Sweden (SE), France (FR) and Italy (IT) (Ortner, 2014, p. 9)

In Figure 21, the relation⁶² between investment trigger prices and FLHs is displayed for hydropower plant investments in the period 2016-2023, considering different degrees of flexibility and levels of discount rate. Note that the related power plant costs are assumed to be not changing in the mentioned period. In the figure, the dashed and the continuous curves represent the investment trigger prices for immediate decision (𝑆_{𝑖𝑚𝑚𝑒𝑑𝑖𝑎𝑡𝑒}, the NPV break-even price) and decision at any time (𝑆_{𝑝𝑒𝑟𝑝𝑒𝑡𝑢𝑎𝑙}, risk adjusted break-even price) respectively.

Further, it can be inferred from the figure that the investment trigger prices decrease as the FLHs of operation increase; whereas they increase as 𝜌 increases. Hence, the increase in investment trigger prices relative to the FiT rates and the expected (simulated) market price of electricity hinders the realization of the potential RET investments due to the scarcity of high quality hydropower potential. For the sake of simplicity, the FiT rates are not represented in the graphic; however all relevant threshold FLHs are tabulated in Table 13.

62 It is implemented by calculating investment trigger prices according to a given theoretical range of FLHs of operation to the Eqs. (4.3.12) and (4.3.28) w.r.t. the different degrees of flexibility and different levels of discount rate.

GWh/y

58

Figure 21- The comparison of the investment trigger prices for hydropower investments as a function of full load hours and w.r.t. the different levels of discount rate and degrees of flexibility (own calculation & illustration)

In Table 13, the threshold FLHs of operation for hydropower plants corresponding to the immediate investment decision is tabulated as obtained from Figure 21. The calculated values for 𝑆_{𝑖𝑚𝑚𝑒𝑑𝑖𝑎𝑡𝑒} based on 𝜌 = 5% indicate that an investment on a hydropower plant project should be initiated, if a hydropower plant is capable of operating more than 4962 FLHs per year (i.e. threshold FLHs), considering the base FiT rate of 73 $/MWhel. According to the conducted analysis in Figure 19, around 9% of the hydropower plants can operate at FLHs higher than the calculated threshold FLHs. Nevertheless, in Turkey, all most all of the hydropower projects with large reservoirs are made. Further, 𝑆_{𝑖𝑚𝑚𝑒𝑑𝑖𝑎𝑡𝑒} based on the maximum FiT rate of 96 $/MWhel indicates 3773 threshold FLHs of operation and around 37% of the analyzed hydropower plants can operate above that level. Note that none of the investors benefits from bonus for domestically manufactured equipment according to the participants of the survey conducted by Özcan (2014). To sum up, it can be deduced that the FiT scheme is observed to be not sufficient to trigger immediate investment decisions for about 8.1 GWel capacity which nearly amounts to 30% of the hydropower installed capacity in the year 2015 (i.e. 25.9 GWel); since the remaining hydropower potential, enabling more than 4000 FLHs of operation, is not available for the targeted amount of capacity expansion.

20 40 60 80 100 120 140 160 180 200

3000 3500 4000 4500 5000 5500 6000 6500 7000 7500 8000

$/MWhel

Full Load Hours

S_perpetual at ρ=8% S_immediate at ρ=8% S_perpetual at ρ=5%

S_immediate at ρ=5% S_perpetual at ρ=2% S_immediate at ρ=2%

Simulated Market Price for Year 2016

59

Table 13- The threshold FLHs for hydropower plants w.r.t. the different means of revenue and discount rates (own calculation & illustration)

The calculated value for 𝑆_{𝑝𝑒𝑟𝑝𝑒𝑡𝑢𝑎𝑙} based on 𝜌 = 5% indicates that an investment on a hydropower plant project should be initiated, if a hydropower plant is capable of operating more than 7949 FLHs per year considering the simulated electricity market price for the year 2016 (see Table 13). It is practically an infeasible situation in Turkey to construct a hydropower plant which can operate at a level which is higher than the calculated threshold FLHs. Moreover, the threshold FLHs gets even higher considering the downward trend in the wholesale market price of electricity in the period 2016-2023 (see Figure 18). Accordingly, the uncertainty and the downward trend in the wholesale market price of electricity can lead to postponement of the potential hydropower plant investments.

In summary, the analysis on the FLHs of operation of hydropower plant projects indicates that the FiT rates and the market price of electricity in the period 2016-2023 are not sufficient to reach the capacity expansion target set by the government.

Assessment on Wind Power Plants