Turkish businesses to use electricity for free from energy cooperatives

Published 30.08.2016 20:33

Turkey is set to found energy cooperatives that will enable farmers, tradesmen and small and medium sized enterprises (SMEs) to not pay electric bills.

These cooperatives will be established using the partnership fee that businesspeople will pay while starting their business. This new model has been proposed to popularize the use of domestic energy resources such as wind power, solar energy and biomass energy. Accordingly, new energy cooperatives will be established and they will be able to produce up to 5 megawatts (MW) of energy without a production license.

According to the daily's report, farmers, tradesmen and SMEs will be able to join forces to produce their own electricity as a result of a legislative amendment. Farmers in a village will be able to establish a joint energy cooperatives and businesses operating in an organized industrial zone will be able to produce their own electricity through wind power, solar energy and biomass energy. After a partnership fee is paid in the beginning of a business, they will not pay electricity bills. They will be able to make money in parallel with their partnership share by giving the surplus electricity to the system after the capacity allocation problem is resolved.

The cost of founding a 1 MW renewable energy power plant in Turkey is 1 million euros. The investment in a power plant of this kind pays for itself in four to five years. Experts emphasize that banks and the state must provide financing support to energy cooperatives to be established in rural areas. The annual electric bill of a four-member family varies between TL 2,000 and TL 2,500 on average, and this figure further rises in businesses. Currently, there are seven established renewable energy cooperatives waiting to come into operation. The capacity allocation problem must be resolved so that the system fully enter into service. Partners wanting to found an energy cooperative anticipate support from the Energy Market Regulatory Authority (EPDK).

Customs and Trade Ministry authorities commented on the matter, saying that the founding of energy cooperatives will significantly reduce Turkey's dependence on foreign energy, which is the greatest reason for the current account deficit, by turning the country's high potential in solar and wind energy into production. "Renewable energy cooperatives will be key to domestic development," they said.

The General Directorate of Cooperative closely examined the examples of energy cooperatives in the world. Energy cooperatives are widespread across the world. There are nearly 1,000 energy cooperatives in Germany, which has less sunlight than Turkey. Turkey annually needs 250 billion kilowatt hours (kwh) of energy. Some 85 billion to 90 billion kwh is met by domestic energy resources, while the remaining part is covered by imported energy resources. Turkey imports nearly $50 billion worth of oil and natural gas on an annual basis.

A regulation on making amendments on unlicensed electricity production in the electricity market will grant exemption to cooperatives to produce unlicensed electricity production of up to 5 MWs without requiring to have a point of common coupling in parallel with the number of partners. Cooperatives with seven to 100 partners, 100 to 500 partners, 500 to 1,000 partners and more than 1,000 partners will be able to produce up to 1 MW, 2 MWs, 3 MWs and 5 MWs of electricity for themselves, respectively.

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