Up to $3 billion in renewable energy financing could be extended throughout 2021 to support the continuation of clean energy capacity in Turkey, the director at Garanti BBVA Investment Banking and Finance, Emre Hatem, said on Tuesday.
With around $3 billion in renewable energy financing in Turkey last year, renewable capacity rose to nearly 49 gigawatts (GW) with the addition of around 4,900 megawatts (MW), which marked a record-high increase, according to data from Turkey’s Energy and Natural Resources Ministry.
Renewable energy offers Turkey a way to reduce its current account deficit, support local industry and employment and attract long-term foreign investment, Hatem told Anadolu Agency (AA).
“As a country which has no energy security problem, Turkey has a great opportunity to realize the transition to renewable energy,” he said.
Turkey saw growth in biomass capacity with over 300 MW coming online in 2020, but this year it is expected to rise significantly to around 400 MW.
Hatem explained that unlicensed solar capacity also grew by 400 MW in 2020, and a similar amount of unlicensed solar capacity is forecast to come online this year, thanks to the increasing number of rooftop installations across the country.
“Thus, we expect around 4,500 MW of additional renewable energy capacity to come into operation and the sector could attract around $3 billion this year through the continuation of the banks’ support for clean energy,” he said.
Hatem said the mini solar Renewable Energy Resource Zones (YEKA) tenders, totaling 1,000 MW in capacity for regions across the country, would constitute a significant part of new projects in 2021.
Turkey is set to receive applications for the mini solar tenders between March 8-12, 2021.
The 74 mini YEKA tenders are expected to be held for 36 districts across the country.
The YEKA tenders form part of the country’s aim to supply 65% of its energy needs from domestic and renewable sources by 2023.
In 2017, through the tenders, Turkey’s 1,000 MW solar tender accepted a winning bid price of $6.99 (TL 51.34) per megawatt-hour (MWh). An equivalent-capacity wind tender, also held in 2017, was achieved at $3.49 per MWh. The country finalized its second YEKA wind tender on May 30, 2020.
Highly dependent on imports for its natural gas and oil needs, Turkey has seen strong growth in renewable energy capacity in the last few years, reaching more than half of the total installed power capacity of 95,000 MW.
“After 2021, based on today’s projections, we expect around 1,500-2,000 MW of renewable capacity to come online annually,” he said, adding that a minimum of 2,000 MW of wind and solar energy capacity is necessary to sustain growth in the sector.
The increase in the solar energy capacity is expected to reach over 100% this year, the Turkish Solar Energy Industry Association (GENSED) said last month.
Capacity additions this year are forecast at 1,500 MW compared with 2020 when just 672 MW were added due to disruptions in the global supply chain from the COVID-19 pandemic.
With last year’s additions, Turkey’s total solar power capacity reached 6,667 MW.
Hatem also explained that the energy sector is expected to witness a number of initial public offerings (IPOs) this year.
“We see that companies with an energy portfolio of over 200 MW have started to put public offerings on their agenda this year. In parallel with the speed of the economic recovery this year, mergers and acquisitions could also gain further momentum,” Hatem concluded.