Dispersed Renewables Key to Turkey's Transit Cost Cuts

Turkey's energy system could benefit from greater distribution of renewable energy plants to various parts of the country in an effort to reduce transmission costs while also allowing investors achieve better returns on their investments, the Chairman of the Steering Committee of the SHURA Energy Transition Center said Tuesday.

The Istanbul-based SHURA Energy Transition Center aims to support Turkey's transition to low-carbon energy through fact-based analysis using the best available data.

Selahattin Hakman, SHURA's steering committee chairman, told Anadolu Agency that Turkey has started to create a competitive renewable energy market thanks to the energy ministry's Renewable Energy Resources Zones (YEKA) tenders, which started last year.

Turkey held a solar tender with a capacity of 1,000 megawatts with a winning bid price per megawatt-hour of $6.99. An equivalent capacity wind tender was achieved at $3.49 per megawatt-hour. Hakman considers these tenders a success because investors are guaranteed both access to finance and a 15-year purchase agreement.

"Renewable energy investments are more advantageous in terms of finance with the global tendency towards decarbonization, the fight against climate change and the transition to renewable energy," Hakman explained. "We can definitely find sources of financing for renewable energy projects in Turkey while it is more difficult to find it for other resources," he added.

He declared that energy efficiency investments could avail of easier financial access while offering Turkey a valuable opportunity to make inroads in these projects.

Currently, Turkey is experiencing difficulties in financing large-scale energy projects due to fluctuating currency rates, whereas if smaller-scale projects and more distributed renewable energy power plants are deployed, it would improve Turkey's energy infrastructure while passing down cost benefits to the consumer, Hakman said.

Last week, Turkey's Energy and Natural Resources Minister Fatih Donmez announced plans for Turkey to hold solar tenders of between 40 and 50 megawatts of capacity in almost all cities throughout the country, a move that Hakman contends is good because such small-scale projects can easily obtain finance.

In addition, he argued that if energy is produced where it is consumed, the problem of needing investments for transmission and distribution over large distances especially where there is huge consumption would be avoided.

SHURA Director Deger Saygin, quoted a report published by the center, which said that Turkey could reach 60,000 megawatts of solar and wind capacity by 2026.

The current installed capacity of solar and wind power plants totals 13,000 megawatts. Details on the financing and the timing of the upcoming solar plant tenders have yet to be released, but Saygin urged consideration in their location in order to have a balance in supply and demand.

"It is important to make these investments by not only looking at the richness of the resource but also the consumption intensity on the grid," he concluded.

(Anadolu Agency)

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