158 O. BAYULGEN
directly addressing renewable energy promotion until the introduction of
the Renewable Energy Law (REL) in 2005. One of the incentives offered
with this law was a purchase guarantee, by which each retail licensee was
obliged to get a portion of its electricity from Renewable Energy Resource
(RER) certified producers. The Law also guaranteed a feed price at which
each retail licensee must purchase renewable energy.
Despite this initial progress, the 2005 Law and subsequent amendments failed to adequately jumpstart the non-hydro renewable sector.
According to experts, this was mostly due to the uncertainties and limitations in the law and ensuing regulations. 17 For instance, even though
the law designed a purchase guarantee scheme, it did not provide any
clear guidelines on how the guarantee mechanism would operate in
practice. Moreover, the law required all state-owned retail licensee to
enter into power purchase agreements with RER certified producers who
approached them but it did not impose a similar obligation on private
retail licensees. Finally, and perhaps most importantly, the feed in tariff
system in the 2005 Law was not flexible enough to distinguish between
developers in terms of the type of renewable source, the geographic location or the type of the plant, or the time of production during the day,
which could potentially affect a renewable energy plant’s ability to sell
its output to retail licensees at the guaranteed feed price. 18 In response
to criticisms, the government passed new Amendments (Law #6094) on
December 29, 2010, in which some of the incentives were increased
and differentiated based on the type of renewable source. These payment
guarantees to renewable energy generators are done through a pooling of
payments (a.k.a. the Renewable Energy Resources Support Mechanism,
or YEKDEM).
The renewable energy legislation and the regulations accompanying
it took nearly two decades to design and enact. On paper, Turkey now
has the ambitious targets and the basic legal and regulatory institutional
framework to attract investment and expand the deployment of renewables (especially in the power sector). The 2014 National Renewable
Energy Action Plan (NREAP) calls for a total renewable capacity of 61
gigawatts (GW) by 2023, with 34 GW coming from hydropower, 20 GW
from wind, 5 GW from solar, 1 GW from geothermal and biomass each.
Moreover, the 2018 National Energy Efficiency Action Plan (NEEAP)
sets out detailed goals for different energy sectors to reduce demand by
14% by 2023 from business-as-usual. 19
directly addressing renewable energy promotion until the introduction of
the Renewable Energy Law (REL) in 2005. One of the incentives offered
with this law was a purchase guarantee, by which each retail licensee was
obliged to get a portion of its electricity from Renewable Energy Resource
(RER) certified producers. The Law also guaranteed a feed price at which
each retail licensee must purchase renewable energy.
Despite this initial progress, the 2005 Law and subsequent amendments failed to adequately jumpstart the non-hydro renewable sector.
According to experts, this was mostly due to the uncertainties and limitations in the law and ensuing regulations. 17 For instance, even though
the law designed a purchase guarantee scheme, it did not provide any
clear guidelines on how the guarantee mechanism would operate in
practice. Moreover, the law required all state-owned retail licensee to
enter into power purchase agreements with RER certified producers who
approached them but it did not impose a similar obligation on private
retail licensees. Finally, and perhaps most importantly, the feed in tariff
system in the 2005 Law was not flexible enough to distinguish between
developers in terms of the type of renewable source, the geographic location or the type of the plant, or the time of production during the day,
which could potentially affect a renewable energy plant’s ability to sell
its output to retail licensees at the guaranteed feed price. 18 In response
to criticisms, the government passed new Amendments (Law #6094) on
December 29, 2010, in which some of the incentives were increased
and differentiated based on the type of renewable source. These payment
guarantees to renewable energy generators are done through a pooling of
payments (a.k.a. the Renewable Energy Resources Support Mechanism,
or YEKDEM).
The renewable energy legislation and the regulations accompanying
it took nearly two decades to design and enact. On paper, Turkey now
has the ambitious targets and the basic legal and regulatory institutional
framework to attract investment and expand the deployment of renewables (especially in the power sector). The 2014 National Renewable
Energy Action Plan (NREAP) calls for a total renewable capacity of 61
gigawatts (GW) by 2023, with 34 GW coming from hydropower, 20 GW
from wind, 5 GW from solar, 1 GW from geothermal and biomass each.
Moreover, the 2018 National Energy Efficiency Action Plan (NEEAP)
sets out detailed goals for different energy sectors to reduce demand by
14% by 2023 from business-as-usual. 19