The Turkish Energy and Natural Resources Minister announced yesterday a long-anticipated move to develop 1 GW of PV capacity in the Konya region. The tender is linked to the developer using domestic technology, R&D studies and employing 80% domestic engineers, according to reporting from Dailysabah.
The project, if completed at the one site as reported, would be one of the largest PV power plant projects globally and the largest in Turkey by a considerable distance. Turkeys cumulative installed PV capacity is expected to pass 1 GW in 2016 or early 2017.
The 1 GW Karapinar project will be developed under a 15-year PPA with the Turkish government, and is expected to begin feeding electricity into the grid by 2018. The government expects the project to lead to an investment of around $1.3 billion. U.S., Chinese and European companies are said to have expressed interest.
The FIT rate for the 1 GW of capacity has not yet been announced. At present the Turkish FIT for unlicensed projects stands at $0.133/kWh, which is attractive given the relatively high irradiation levels at the site and falling module prices. License fees, which have been prohibitively high in Turkeys licensed project sector to date, are expected to be waved for the Konya tender.
While the 1 GW project will certainly be attractive to developers and investors, the link to domestic production may prove problematic. Turkey does possess a domestic PV production sector, with some 18 module assembly outfits, however it has been hampered by low utilization levels and a lack of competitiveness with Chinese imports.
Whether a 1 GW pipeline will prove sufficiently attractive for a manufacturer to establish a base in Turkey is yet to be seen, but the country could potentially be an attractive site from which tariff-free exports to the EU and U.S. could be made.
The announcement of the Konya project and initiative has been expected by the Turkish solar industry for some time. Speaking to pv magazine earlier in the year, leading domestic developer TeknoRay Solar said that it is unlikely to invest in manufacturing capacity, even given the 1 GW tender.
The government is trying to give the impression that there are many players interested, but in reality that is not the case, said Tekno Group Chairman Atalay Co?kuno?lu. There are only a few willing to come in an invest millions in a factory for a start to finish turnkey module manufacturing facility. Two big Turkish groups are investigating the feasibility of this, two Chinese groups and one Korean that I know of.
The tender is scheduled to be held in December.