Türkiye on Tuesday completed tenders to allocate 1,200 megawatts (MW) of wind energy power plants, which are envisaged to bring in $1.2 billion in investment, according to a top energy official.
The tenders under the Renewable Energy Resource Zone (YEKA) auction mechanism cover five zones in northwestern Edirne and Kırklareli, and central Sivas provinces and attracted 100 bids from 40 companies.
The demand was 18 times higher than the available allocations, Energy and Natural Resources Minister Alparslan Bayraktar said following the tenders.
The YEKA scheme was introduced in 2016 to facilitate land allocation for investors, ease the deployment of large projects and encourage the domestic production of renewable energy technologies.
The new wind projects will be realized through a $1.2 billion investment, Bayraktar said.
They will generate 4.5 billion kWh of electricity annually, supplying power to some 2 million households, according to the minister.
The new plants will prevent the import of 800 million cubic meters of natural gas annually. This translates to savings of $400 million per year and $8 billion over the next two decades, said Bayraktar.
The government unveiled updates to the YEKA model in 2024 to draw greater investor interest. Key enhancements include simplifying post-tender permitting procedures and introducing financial incentives like exemptions from transmission fees.
Companies will pay a total of $120 million, averaging $100,000 per megawatt, to the state through the Renewable Energy Support Mechanism (YEKDEM) within one month of contract signing.
The updated YEKA scheme provides a price floor and long-term electricity purchase guarantees, which Bayraktar has said will make it easier to finance investments.
The companies that have won the tenders are securing grid connections for 49 years, a minimum price during the six-year open market sale period, and a guaranteed price of $3.5 cents/kWh for another 20 years.
"We will purchase this electricity at almost half the current market price for 20 years, and we will reflect this cheap energy to our citizens," Bayraktar said.
He said the focus is not only to produce energy from renewable sources. "At the same time, we have created a new model to ensure the equipment that's going to be used is produced in Türkiye, which contributes to employment, production, and exports, and reduces the current account deficit," Bayraktar said.
"We have implemented an example of this model today."
With the support provided for local equipment production so far, the number of producers has increased from 27 to 500, according to the minister. This has provided employment opportunities to 50,000 people, he added.
Türkiye has limited oil and natural gas resources, which makes it a major energy importer vulnerable to fluctuations in the energy markets.
It has been incentivizing private sector investments in renewable power plants since 2005 to reduce its high import bill and insulate itself from geopolitical risks.
While Türkiye's electricity consumption has tripled in the last two decades, it is expected to increase even faster in the coming years due to the long-term energy transformation, which involves replacing fossil fuel energy with electricity.
"While we are working to meet this increasing demand, we are also taking measures to reduce our dependency on external sources," said Bayraktar.
Türkiye boasts 33,000 MW installed capacity in wind and solar energy. It plans to lift this figure to 120,000 MW by 20235, according to the government's targets.
"To achieve this goal, we are developing storage capacity allocations as well as self-consumption projects for our industrialists and traders. In addition, we continue to implement the YEKA model to enable domestic and foreign investors to develop larger-scale projects," Bayraktar added.
Next week will see tenders to allocate 800 megawatts of solar plants, which is projected to bring in about $600 million in investment.
"Our goal is to organize YEKA auctions for 2,000 to 2,500 megawatts each year, and thus reach our target of 120,000 megawatts," said Bayraktar.
Under the YEKA scope, about 5,850 MW of solar and wind energy tenders have been conducted to date. Some of the YEKA projects have been canceled, some have been completed, and some are in the investment phase.
