The flashing amber light that has long been Turkeys solar industry turned green this week as 15,000 visitors poured through the doors of the 22nd International Energy & Environment Fair and Conference (ICCI) in Istanbul to discuss the countrys future energy plans.
Although solars role at the three-day event was smaller than some within the industry would have liked, the sector nevertheless displayed its resilience, scalability and critically its suitability for the Turkish market.
Among the 278 exhibitors at the ICCI exhibition, around half were concerned with cogeneration and fossil fuels, while wind power appeared more prominent in the renewables hall.
Talk at the opening ceremony held yesterday fixated on Turkeys need to secure its energy independence. Currently, the country imports 75% of its power needs, much of it natural gas from Russia a nation with whom relations have become strained in 2016.
Mario Diel, chairman of the Energy Council of Foreign Investors called on Turkey to combine the vast know-how and experience of Europe with the thirst for energy within the country to drive more foreign investment into the nations power sector.
The head of the International Solar Energy Society Turkey Section (Gunder), Kemal Gani Bayraktar, suggested that Turkey would likely end 2016 with 1 GW of solar PV capacity installed, from a base of around 400 MW right now. To meet this goal, nearly all capacity will be added in the unlicensed sector, which is comprised of solar projects not greater than 1 MW.
Bayraktar also mentioned the 100,000 rooftops action plan, which is designed to kickstart the Turkish residential solar market, while reiterating targets set by government to install 3 GW of solar PV by 2019, 5 GW by 2023 and 10 GW by 2030.
Next up, Sefa Sadik Aytekin of the Ministry of Energy and Natural Resources (ETKB) announced how the Turkish government plans to auction off all of the nations energy production assets over the next five years in a round of privatizations that the ministry feels will help liberalize the Turkish energy sector.
Kicking the tires
Red tape, bureaucracy, inconsistent policy and a worsening security situation have all combined, to varying degrees, to cast uncertainty over Turkeys solar market, stunting promising growth from 2013 severely in 2014, when a mere 40 MW of new capacity was added. The situation improved last year, and now the government is examining ways to maintain and accelerate this momentum.
Chief among them is to assist the licensed solar sector for large-scale power plants greater in size than 1 MW. A tender issued last year for 600 MW attracted 9 GW of bids, which forced participants to agree on price levels that are proving prohibitively expensive on average, developers have to pay a license fee of $600,000 per MW on their plants.
Hence, nothing has so far been installed from this tender, and Osman Ozberk, vice president of Gunder, told pv magazine that he expects not more than 20, 25 MW to be installed in the licensed sector this year, with construction on the remaining allocation due to begin in 2017.
To sweeten the deal for developers, and to boost local manufacturing, the government has introduced an additional support mechanism on top of the FIT. If a solar plant uses locally produced components, it could be eligible for a maximum FIT of $0.188/kWh. The current FIT is $0.133/kWh, but the utilization of local cells adds a further $0.035/kWh, while inverters and other components can be worth an additional $0.006-$0.008/kWh.
The FIT is valid for ten years, and these additional sweeteners are valid for the first five years of a plants installation, Ozberk said. He also revealed that the introduction of some sort of trade duties such as those imposed by the EU and the U.S. on Chinese solar components is likely at some point in the near future.
Europe has duties, the U.S. has duties; this sort of thing happens throughout the world, so why should Turkey suffer? he asked. Governments should support their industries, and we dont want to see a situation in Turkey similar to what happened in Spain, Italy and Greece, where the solar markets grew, but local manufacturing did not. That was unsustainable, and we are cautious of following that same path.
However, Ozberk added that the FIT ‘sweeteners' are currently unrealistic because, despite there being 18 solar PV manufacturers in Turkey, the country lacks the capacity to provide domestically everything the industry will need to develop those 600 MW of tendered projects.
Senior solar analyst at IHS Josefin Berg also told pv magazine that Turkey is forecast to add around 500 MW of new solar PV capacity this year, agreeing with Gunders reckoning that this growth will almost exclusively come in the unlicensed segment.
The ICCI Istanbul event finishes tomorrow, Friday April 29.