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| Fri, 3rd Jul 2020 14:10:00 |
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Green electricity tariffs, 1 GW solar tender ‘light at the end of the tunnel’ for Turkish PV |
Turkey’s Ministry of Energy and Natural Resources has officially published the details of its 1 GW solar auction. The smallest project allowed under the tender is 10 MW in size, while the largest is 20 MW.
According to the announcement published in today’s issue (03/07/2020) of the Official Gazette, the auction will be held over a four-day period between October 19-23, 2020, for projects located in 36 cities, and across 74 grid connection points.
The starting ceiling price in the auctions will be TRY0.3/kWh ($0.044/kWh), and the winners will receive a 15-year power purchase guarantee. All projects must use locally produced modules.
The following cities have been allocated projects under the tender: Ad?yaman, A?r?, Aksaray, Ankara, Antalya, Batman, Bayburt, Bilecik, Bingöl, Bitlis, Burdur, Bursa, Çank?r?, Çorum, Diyarbak?r, Elaz??, Erzurum, Eski?ehir, Gaziantep, Hakkari, I?d?r, Kahramanmara?, Kars, K?r?ehir, Kilis, Malatya, Mardin, Mersin, Mu?, Nev?ehir, Osmaniye, Siirt, ??rnak, U?ak, Van and Yozgat.
This 1 GW auction is like the light at the end of the tunnel for the Turkish solar industry, which had been in decline even before the effects of Covid-19 were felt.
In the first five months of 2020, total installed PV capacity for the year stood at just 157 MW compared to last year’s almost 1 GW for the full year. This was a decline from 1.6 GW in 2018. Turkey’s solar industry has been desperately looking for planning security in the times of Covid-19. Such auctions are more than welcome, since roof top self-consumption models are apparently not moving forward fast enough.
While the auctions are a positive step, financing projects will still remain challenging. As mentioned, the auction will be held in Turkish lira and ceiling price is already as low at $0.044/kWh. Considering that locally-manufactured modules must be used, and that they are around 30% more expensive than those produced elsewhere, project developers and participating parties will have difficulties in defining the right pricing. On the other hand, since the auction is in Turkish lira, fundraising will be in Turkish lira. Due to the high inflation rate – currently running at 10-12%/a – financing costs will be higher than if the auction was in euros or U.S. dollars.
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