ISSN 2077-3528 International Journal on “Technical and Physical Problems of Engineering” IJTPE Journal (IJTPE) www.iotpe.com [email protected] Published by International Organization on TPE (IOTPE) December 2010 Issue 5 Volume 2 Number 4 Pages 92-96 THE IMPACTS OF RENEWABLE ENERGY LAW ON TURKISH WIND ENERGY SECTOR Y. Aslan Electrical Engineering Department, University of Dumlupinar, Kutahya, Turkey, [email protected] Abstract- Although the first wind turbine started Turkey. It is estimated that Turkey’s technical wind operation in Turkey as early as 1998, virtually no energy potential is 88,000 MW and economical potential significant progress has been achieved in the wind energy is approximately 10,000 MW depending on the technical sector until 2006 due to the absence of a stable legal conditions [2-5]. framework and an effective support mechanism. With the Despite the fact the first wind turbine started adoption of Renewable Energy Law into Turkish wind operation in Turkey as early as 1998; actual progress in energy sector in May 2005 many foreign and local firms the market has started in 2006 after the adoption of are interested in the developments of wind farms and Renewable Energy Law on 18 May 2005. Although the applied to the Energy Market Regulatory Authority for a law is an important step towards the renewable energy licence. Despite the fact the perspectives for the implementations, it does not set a target for electricity development of wind power in Turkey are becoming generated from renewable sources. In 2006 in total of 56 quite attractive, there are problems to be tackled. This MW capacity of wind turbines were erected, followed by paper provides an analysis of the technological a further 148 MW in 2007. In the end of the 2008 the background of Turkish wind energy sector and legislative installed wind capacity in Turkey has reached to 433 MW framework. with an increase of 286 MW which was only 147 MW at the end of 2007. According to latest figures released from Keywords: Wind, Wind Energy, Renewable Energy, Turkish Wind Energy Association (TWEA) in January Electricity Market. 2010 there are 29 wind farms with an installed capacity of 776.55 MW operating in Turkey [6, 7]. The current I. INTRODUCTION production status of wind energy projects in Turkey is Turkey has dynamic economic development and rapid around 1500 MW [8]. According to the projection of the population growth. The net effect of these factors is that Turkish Electricity Transmission Company (TEIAS), the Turkey’s energy demand has grown rapidly almost every energy demand is foreseen to increase by 6.3% per year and is expected to continue growing in the coming annum in the years 2006-2015 and the total installed years. In Turkey electric power is mainly generated capacity by 2015 is expected to reach about 59.000 MW. through thermal power plants, and the country is highly Wind industry will play a primary role to reach this target dependent on imported natural gas. Almost 45 percent of and the accumulated installed capacity by 2015 will reach the overall electric energy produced in Turkey uses more than 1400 MW, representing 2.5% of the total natural gas [1, 2]. To reduce the import of fossil fuels, accumulated capacity [9]. while meeting the growing energy demand, the Turkish government is planning to diversify its energy mix by II. LEGAL FRAMEWORK developing the renewable energy sources particularly In the European Union (EU) the development of wind in the coming years. common rules for the promotion of renewable energy In the view of increasing global concerns such as resources dates back to the late 1980’s. The Council reduction of emissions of greenhouse gases, and scarcity Recommendation to Promote Cooperation between of water supplies, the utilization of renewable energy Public Utilities and Auto-producers of Electricity of 1988 resources in Turkey as an alternative to fossil fuels has is the oldest piece of legislation on renewable energy in been promoted and encouraged by the Turkish the EU. However, as stated above, the promotion of government in recent years. The liberalisation process renewable energy resources in Turkey is subject to far which was started in 1984 provided a large space for more recent attention [10]. private wind energy developers. With an annual wind speed and power density of about 2.5 m/s and 25.8 W/m2, A. Electricity Market Law respectively, the western, northern and south-eastern In March 2001, the Turkish government enacted The coasts of Anatolia have been identified as the most Electricity Market Law (EML) with the law no. 4628 favourable locations for wind power generation in which sets the stage for liberalization of power generation 92 International Journal on “Technical and Physical Problems of Engineering” (IJTPE), Iss. 5, Vol. 2, No. 4, Dec. 2010 and distribution activities. The new law also created the price mechanism will not be applicable to the entities Energy Market Regulatory Authority (EMRA) to take the holding a RER certificate which are in operation for more necessary measures to promote the utilization of than 7 years. However after the end of year 2011, the renewable energy resources, including the setting of retail sale licence holders will be obliged to purchase tariffs, issuing licences and assuring competition. This energy under the Law from the RER certificate holders legislation generated two policies related to renewable which are in operation for less than 7 years [1, 10, 12]. energy: There are certain incentives concerning the • Renewable energy facilities are only required to pay investment periods of the projects. For example, the 1% of the total licence fee or the licence for construction service fees will waived from the individuals or legal and are exempted from the annual licence fee for the first entities willing to construct generation facilities to eight years following the completion date of the facilities primarily meet their own energy needs from renewable stated in their licences. energy resources. In the event the forests and the lands • The auto-producers which generate electricity from under private ownership of Treasury or under the disposal renewable energy resources may purchase electricity of the state are utilised for the generation of electricity from private sector wholesale companies under certain from renewable energy resources, such lands can be conditions whereas the other auto-producers are not rented or awarded access by the State to the relevant entitled to do so. Moreover it is stated in Article 38 of entities. During the investment period, the fees for the Electric Market Licensing Regulation (EMLR) that granting of such rights will be discounted by half and TEIAS and/or the distribution companies are required to certain duties will be waived for lands in forestry areas give priority status to the facilities generating electricity [1, 10]. from renewable energy resources in terms of their The introduction of average wholesale price of connection to the transmission and/or distribution electricity generated from renewable energy resources systems [10-12]. was not welcomed by the wind turbine operators since it caused difficulties in the financing stage of wind farms. It B. Renewable Energy Law is argued by the wind operators that, by the end of the Since the incentives provided by EML and EMLR year 2011, the price of electricity generated by renewable were not adequate, to achieve desired results in the resources will be equal to the average wholesale price of utilization of renewable energy resources renewable the previous year. Since the electric power is mainly energy law has been accepted. The law regarding the distributed by the state utilities, the price defined by spread of the use of renewable energy sources for electric TETAS (Turkish Electricity Trading and Contracting power generation, utilisation from these resources in a Joint Stock Company) is assumed as average wholesale secure, economic and qualified way, the increase of the price. Leaving aside the unrealistic billing procedures energy mix, the decrease of greenhouse gas emissions, between the state enterprises, due to liberalisation of the the recycle of wastes, the protection of the environment electric market not only state companies but private and the development of the related manufacturing investors will be in the energy sector. Upon the criticisms industries for realizing these targets was adopted in by the investors and operators in the renewable energy Turkish Parliament on 18 May 2005 with Law No. 5346 sector, in May 2007 the Turkish Parliament has carried [1, 7, 10]. out an amendment to the Renewable energy law and The renewable energy law provides that the facilities introduced following changes in order to improve the which generate electricity from renewable energy existing feed-in tariff scheme [13]: resources will be granted a renewable energy resources • Legal entities with a retail sale licence are obliged to (RER) certificate which will entitle them to benefit from buy electrical energy from power plants generating the incentives provided by the law. EMRA is the electrical energy from renewable energy resources which competent authority to grant the RER certificates of are holding a RER certificate and have not completed 10 which the procedures and principles are specified by a years of operation. regulation [10]. • The amount of RER-certified electrical energy The Renewable Energy Law introduced a feed-in available shall be published by the EMRA annually. The tariff scheme which licences power generation companies legal entities holding a retail sale licence shall purchase to generate and transact power from the renewable energy the amount of RER-certified electrical energy according resources and imposes an obligation on companies with a to the proportion of the energy amount they sold within retail licence to purchase a certain percentage of the the previous calendar year to the total electrical energy amount of electricity that they sold in the previous year amount they sold in the country.