Turkey secures $350 million renewable energy loan

The World Bank has approved $300 million in financing from the International Bank for Reconstruction and Development (IBRD) and $50 million from the Clean Technology Fund (CTF) for renewable energy projects in Turkey.

Although the Turkish government has set ambitious targets for the development of renewable energy, the World Bank says in its project report that progress towards the country’s targets is hindered by key barriers such as the inadequacy of existing transmission network to meet the growing demand of electricity; limitations of existing electricity load dispatch and control systems; limited transmission links in relation to geographic location of energy resources; and the need for upfront transmission investments when building renewable energy parks.

The project therefore "aims to strengthen and increase the capacity of the transmission system to absorb intermittent power in Turkey," Mikul Bhatia, the World Bank’s project leader, tells pv magazine.

The World Bank report adds that the project aims to avoid greenhouse gas emissions from fossil fuel-based power through the greater integration of renewable energy source-based generation in Turkey.

Components of the $350 million project

The Turkey’s proposed Renewable Energy Integration Project, which will be implemented by TEIAS, the Turkish electricity transmission company, will seek to achieve the following goals:

  • Expansion of transmission infrastructure to facilitate faster development of renewable power plants in the provinces of Izmir, Canakkale and Kirklareli. The three provinces constitute nearly 70% of the installed wind capacity in Turkey and, due to their high wind potential, will continue to attract more wind power investments. However, the provinces’ high solar radiation means solar PV could benefit too.
  • Smart-grid investments to strengthen grid operation and management, which will enable TEIAS to handle the increasing amounts of intermittent energy.
  • A second Lapseki-Sütlüce submarine power cable which will connect the Anatolian side and Thrace side of Turkey, with a capacity of 2 GW. As a result of this sub-component, the 380 kV bulk-transmission network to Istanbul across the Bosphorus and Dardanelles straits will form a strong and secure loop network around the Marmara Sea.
  • Strengthening of transmission networks to cater to growing demand and supply of electricity in Turkey, including the Yeni Ambarli-Yenibosna single-circuit underground cabling, among other investments.

Turkey’s electricity consumption soars

Meanwhile, recently published TEIAS data show the country’s electricity consumption rose by 78% over the past 10 years from 131.9 billion kWh in 2003 to 235 billion kWh last year. In 2014, TEIAS estimates the country will consume 256 billion kWh of electricity.

Turkish Energy Minister Taner Yildiz says this impressive increase is the result of the improvement of welfare in the country and that Turkey "will nearly double its electricity consumption to 450 billion KWh by 2023."

The country will certainly need to upgrade its energy infrastructure and invest heavily in the power sector in order to fill the energy supply gap and sustain its economic growth. However, questions remain as to where most of the anticipated investments will be directed at.

Yildiz says the ministry plans to invest in cities like Istanbul, where electricity consumption is higher, and that the country will need new investments in nuclear and coal plants along with investments in renewable energy projects.

Energy policies questioned after Soma mining disaster

In early May, Yildiz revealed that Turkey is in talks with China regarding a $10-$12 billion investment deal for the Afsin-Elbistan coal field and power plant project in southern Turkey. The project includes the construction of a mammoth 8 GW coal power plant using fuel from the Afsin-Elbistan region, which holds up to 45% of Turkey’s lignite reserves.

However, public outrage following the mining disaster that killed 301 mine workers in Soma, Manisa Province in Western Turkey on May 13 has resulted in strong criticism of Turkey’s energy policies.

Critics have expressed disbelief at the government’s safety guarantees of the country’s fossil fuel energy infrastructure. The Soma mine passed a labor ministry safety inspection in March, for example, while Energy Minister Yildiz praised the facility’s safety while visiting the mine last year, critics point out. Increasing the number of coal-fired and nuclear power plants is now widely seen as hazardous.

In order to diversify energy supply sources in the face of high dependence on imported oil and gas, Turkey is about to begin building its first nuclear plant, the Akkuyu plant, in the province of Mersin on Turkey’s Mediterranean coast. Turkey received $1.39 billion from Russia in April for the construction of the Akkuyu plant, which is expected to begin construction by Russia’s Rosatom in 2015 and include four reactors once completed.

Martin Raiser, the World Bank’s Country Director for Turkey, counters that "Turkey has considerable renewable energy potential." The $350 million loan, Raiser adds, is another important step towards a cleaner, more secure energy supply that is less dependent on imports energy sector.

The Turkish government awarded the first two licenses for an 8 MW solar park in the region of Elazig and a 5 MW project in the eastern region of Erzurum in mid-May. They were part of the first round of the country’s licensing program for large-scale solar projects last year, which attracted nearly 15 times the 600 MW cap set by the Turkish Energy Regulatory Authority (EPDK). The EPDK has announced that the agency will begin accepting applications for new solar PV licenses in April 2015.