GUIDE TO INVESTING IN

TURKISH RENEWABLE
ENERGY SECTOR
TABLE OF CONTENTS
1. OVERVIEW OF RENEWABLE ENERGY IN TURKEY 01
1.1. UNLICENSED MODEL 03
1.1.1. GENERAL PROCEDURES OF APPLICATION FOR UNLICENSED PROJECTS 04

1.1.2. PRICING MECHANISM 06

1.2. LICENSED MODEL 07
1.2.1. GENERAL PROCEDURES OF APPLICATION FOR LICENSED PROJECTS 07
1.2.2. INVESTMENT OPPORTUNITIES FOR LICENSED WIND ENERGY MARKET 12

2. INCENTIVES FOR LICENSED AND UNLICENSED PROJECTS 15

2.1. FEED-IN-TARIFFs 16
2.2. LOCAL CONTENT SUPPORT 16
2.3. LAND ACQUISITION 18
2.4. INCENTIVES FOR PRE-LICENSE/LICENSE/SYSTEM USAGE FEES AND TAXES 19

2.5. INVESTMENT INCENTIVES 21

3. RENEWABLE ENERGY RESOURCE ZONES (RE-ZONE/YEKA)
MODEL AND YEKA TENDERS 23
3.1. GENERAL OVERVIEW OF THE YEKA MODEL 24

GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR I

 1
OVERVIEW OF RENEWABLE
ENERGY IN TURKEY
 1. OVERVIEW OF RENEWABLE ENERGY IN TURKEY  Increasing the share of renewables to 30 percent by 2023
 Increasing geothermal installed capacity to 3,000 MW (from the
current 1335 MW) by 2023
Demand for energy and natural resources has been increasing due to
economic and population growth in Turkey. Over recent years, the  Maximizing the use of hydropower
country has experienced the fastest surge in energy demand among  Increasing wind installed capacity to 16,000 MW (from the current
OECD countries, and according to the International Energy Agency 7,155 MW) by 2027
(IEA) forecasts, is set to double its energy use over the next decade.  Increasing solar installed capacity to 16,000 MW (from the current
The projections of the Ministry of Energy and Natural Resources 5,435 MW) by 2027
confirm that this trend will continue for the medium and long term.
Three different investment models are in place in Turkish renewable
Recent energy data indicate that Turkey is a net energy importer country, energy market in this new period: unlicensed, licensed, and the RE-
depending on such imports for 73% of its energy needs. This high rate Zone (YEKA) model.
of energy dependence has been the main driving force behind the
formulation and implementation of new policies to commission local and
renewable energy resources. In this respect, Turkey announced the National
1.1. UNLICENSED MODEL
Energy and Mining Strategy in 2017 which identified security of supply,
localization, and predictable market conditions as the main pillars to follow In line with the recent changes in the unlicensed electricity market,
in energy sector. Under the Strategy, ensuring localization and reducing real persons or legal entities may install renewable energy systems
import dependence through utilization of domestic resources stands as a generating up to 5 MW of energy without any requirement to obtain
top priority for Turkey which is ambitious to generate 2/3 of its electricity a license. The installation must be in the same connection point
from local and renewable resources by 2023. as the consumption facility and the installed power cannot exceed
the contract power identified for the “related consumption facility”
Turkey has a substantial amount of renewable energy potential, and which means unlicensed facilities can only be set up as rooftop or
utilization of this potential has been on the rise over the last decade. façade installations. The Presidential Decree No.1044 dated May 9,
As of the end of 2018, hydro, wind and solar resources constitute 2019 reserves only for the public institutions the right to install
the vast majority of the country’s renewable energy resources, ground-mounted generation facilities with different connection point
accounting respectively for 28,291 MW, 7,005 MW and 5,068 MW from the consumption facilities with the condition not to exceed
of the total installed capacity of more than 88,526 MW. However; contract power of the consumption facilities.
biomass/biogas and geothermal energy resources are also expected to
comprise a considerable portion with the rapid growth in utilization Under the relevant Local Content Regulation, local content support
of these resources in the market. is not provided for unlicensed projects unlike for the licensed ones.
5,353.5 and 68,8 MW of unlicensed capacity are installed in solar and
As part of the ongoing efforts to promote localization, the wind respectively as of the end of May 2019.
Government has identified following targets to strengthen
renewables’ position in the market beyond 2020s:

02 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 03

1.1.1. General Procedures of Application for Unlicensed Projects  Coordinated Project Application Drawing
 Facility efficiency document
The procedure for unlicensed projects (up to 5 MW) doesn’t  Declaration of non-affiliation with the relevant network operator or
require establishment of a company; the applicant does not need the commissioned supply company (pursuant to the Article 37.10 of
to participate in a capacity bidding process, there is no yearly time the Regulation of Unlicensed Electricity Generation)
schedule for applications unlike the licensed applications which are
received only during a specific time of the year; and there is no need The documents are evaluated by the relevant network operator and
to have metering data for the project site. Under the new regulation “invitation/call letters” are sent to the applicants considered eligible.
on unlicensed electricity generation, the private real persons or legal Within the first 90 days of the announcement of the letters, the
entities can only apply for rooftop or façade installations which can applicant shall submit its generation project and the connection
be up to 5 MW capacity and cannot exceed the contract power of the line project (if available) to Turkish Electricity Distribution Company
related consumption facility. For unlicensed solar and wind projects, (TEDAS), the relevant body of the Ministry of Energy and Natural
following documents are required in application to relevant Network Resources, or to an entity authorized by the Ministry responsible
Operator (Distribution Company): for project approval. Within the first 180 days following the
announcement of the invitation letter, the investor shall submit the
 Connection Application Form for unlicensed electricity generation approved project to the relevant network operator and the operator
 The original or certified copy of the title deed or the rental contract shall sign a connection agreement with the investor within the first
for the project site or a document testifying to the obtainment of the 30 days following the submission.
utilization right of the relevant site
 Official documents (to be obtained from the Ministry of Agriculture After the connection agreement, the applicant shall construct
and Forestry or its local directorates) testifying to non-sensitive the project and apply to the operator to obtain an official report
nature of the location (it should not be a fertile agricultural land) – confirming the suitability of the facility for provisional acceptance,
not required for rooftop and façade installations a document required for application to the Ministry or the relevant
 Information about the consumption facilities (installed power of the entities authorized by the Ministry for provisional acceptance.
generation facilities cannot exceed the contract power of the related Pursuant to the Regulation, provisional acceptance procedure
consumption facilities) shall be completed for all the facilities to be connected to the Grid
through medium voltage level within 1 year following the signing of
 EIA exemption document from Provincial Directorate of
the connection agreement. A system usage agreement shall be signed
Environment and Urbanization - not required for rooftop and façade
as the final step between applicant and operator no later than 30
installations
days following the provisional acceptance.
 Bank receipt testifying to the payment of the application fee (free of
charge for 0-250 kw, for more than 250 kw application fee is 751.55
TRY for 2019) Under the unlicensed generation regulation, rooftop, and façade
installations up to 10 kW are differentiated from other facilities more
 Single-line diagram
than 10 kW in terms of installation procedures. In January 2018,
 Technical evaluation report of DG for Energy Affairs of the Ministry
the Energy Market Regulatory Authority (EMRA) released a Board
of Energy and Natural Resources
Decision (Decision No. 7590 dated 28/12/2017) on “the Procedures

04 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 05

 and Principles on Application and Excess Power Purchasing for the 1.2. LICENSED MODEL
Unlicensed Solar Generation Facilities with the Same Connection
Point as the Consumption Facility” in order to facilitate installation
Most of the power plants, including renewable energy ones, are
of the solar facilities up to 10 kW installed power. An additional
constructed and operated under licensed model, which deals with
amendment to the Income Tax Law was passed by the Parliament on
the types of investments over 5 MW installed capacity. In the case
“exemption from income tax of those selling the excess electricity
of solar and wind power investments, the investors apply to EMRA
generated from the installations up to 10 kW on the rooftops or
for pre-license in the first stage (based on the provincial capacities
facades of the houses they own or rent” which was published in the
announced beforehand by the Electricity Transmission Company of
Official Gazette dated 27 March 2018.
Turkey-TEIAS). For both types of investments, the current regulation
on licensing requires the applicants to have on-site metering data of
1.1.2. Pricing Mechanism at least a 1-year period that has been collected within the previous
five years for the sites to be used for installation of power plants. (For
the licensed solar projects, applicants must also have metering data
The Presidential Decree No.1044 dated May 9, 2019 brought about
of at least 1-year period, but only half of the data must be collected
critical changes on the unlicensed electricity generation facilities.
on-site).
Under the Decree, unlicensed capacity limit has been increased from
1 MW to 5 MW and the power purchase price has been identified
for the first ten years of operation as the relevant standard retail Investors who apply to the EMRA for the same grid connection
price for all unlicensed generation facilities up to 10 kW and more points/regions are subject to a bidding process that calls for
(for households capacity limit is 10 kw). Retail electricity prices are reduction (reverse auction) from the RES Support (YEKDEM) tariffs
updated quarterly by EMRA for different types of consumers such as (Schedule-1); the winners are held to the reduced RES Support
industry users, commercial users, household, agricultural irrigation prices instead of the fixed tariff for the first ten years of operation.
and lighting. However, the investors’ rights are reserved for the local content
support available for the facilities identified in The Law No. 5346
(on Utilization of Renewable Energy Sources for The Purpose of
Under Article 24 of the new regulation on unlicensed electricity
Generating Electrical Energy) without being subject to any bidding
generation announced in the Official Gazette No. 30772 dated
or reduction. The capacity allocation mechanism is only applicable
12.05.2019, the generation facilities installed and put in operation
to wind and solar power plants, which means that the investments
before the new regulation, shall continue to benefit from 13.3 USD
based on other renewable energy resources such as geothermal,
cent/kWh for the first ten years of operation. For those being granted
biomass etc. are not subject to capacity tenders.
invitation letters following the new regulation, the power purchase
price shall be the same retail price as electricity procurement price
of the related consumption facility. 1.2.1. General Procedures of Application for Licensed Projects

1.2.1.1. Application Process

In the case of wind and solar power plants, as underlined before,
based on the announcement of the provincial capacities for the

06 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 07

 following year by TEIAS, EMRA issues a Board Decision defining the  For wind and solar power plants: A metering data report of at least
specific time schedule for the investors to submit an application for 1-year period that has been collected within the previous five years
pre-license. For renewable energy investments, the investors apply to (for solar at least 6-month on-site metering, for wind 1 -year on-site
EMRA for pre-license with the following documents (EMRA Decision metering required)
No. 7828 dated 10/05/2018 on the List of Information and Documents  The factsheet on the ownership of the sites to be used for generation
to be Submitted in Application for Pre-licenses and Licenses): facilities

 Pre-license Application form Table-1 Investment Amounts Per Unit for Fuel Sources
 Certificate of authorization for real persons to represent the entity TOTAL INVESTMENT AMOUNT PER UNIT
FUEL SOURCE (TRY/MWM)
 A copy (certified by trade registrar) of the Articles of Incorporation
Coal 1,500,000
 Fact sheet on the partnership structure of the company Natural Gas / LPG 1,000,000
 Fact sheet on company capital (at least 5% of the total planned Fuel Oil / Nafta 1,000,000
investment is required – see the table-1 below on “investment Hydro 2,000,000
amount per unit” EMRA Decision No:4709-4 dated 21/11/2013) Wind 2,500,000
 Fact sheet on Generation Facility Geothermal 2,100,000

1/25,000 and 1/5,000 scale maps covering facility location Biomass 1,900,000

Solar 3,000,000
 Single-line diagram
Nuclear 6,000,000
 Zoning status sheet Process waste heat 700,000
 Fact sheet testifying to non-sensitive nature of the location pursuant Others 1,400,000
to EIA Regulation Annex-5
 Declaration on non-forbidden nature of the location (it should not be Following submission of the documents above to the EMRA on the
a fertile agricultural land), dates specified for pre-license applications, EMRA evaluates whether
 Guarantee letter (MW X 10,000 TRY-Upper Limit: 5,000,000 TRY, EMRA the relevant documents fulfill the requirements. If the proposed
Board Decision No:4709-6 dated 21/11/2013) location falls within the boundaries of a project land allocated
 Pre-license application fee (see Table-2) through an international agreement, or for which a licensing process
for a natural gas storage, refinery or oil storage is underway, the
application is rejected. The generation license applications for land
Additional Documents Required Depending on Resource Type:
are prioritized based on the fuel type, which means that domestic
coal, imported coal, and renewable energy are given priority
 For Hydroelectric power plants: original or certified copy of the fact respectively.
sheet on “the eligibility to sign water usage agreement with the
Administration of State Hydraulic Works”
The documents of the applicants are scrutinized, and a technical
 For Geothermal power plants: original or certified copy of the fact
review is requested by EMRA from DG for Energy Affairs of the
sheet on “the obtainment of the right to use relevant resources”
Ministry of Energy and Natural Resources. The authority also

08 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 09

 requests the official view of TEIAS and/or the relevant distribution of State Hydraulic Works (for hydroelectric power plants)
company of which the project falls within the boundaries.  Application for system connection and usage agreements with TEIAS
or the Relevant Distribution Company
The investors who apply to the EMRA for the same grid connection  Finalization of Contribution Fee Agreement with TEIAS (for wind and
points/regions are subject to a bidding process of TEIAS based on the solar power plants)
reduction (reverse-auction) of the RES Support Prices indicated in the  Finalization of the Agreement with the Relevant Authorities
Schedule-I. Regarding the acquisition of the right to use relevant resources (for
geothermal power plants)
1.2.1.2. Requirements to Be Fulfilled During the Pre-License Period (Between  To increase company capital to at least 20% of the total planned
24 Months-36 Months) investment (see the table above on “investment amount per unit”
EMRA Board Decision No:4709-4 dated 21/11/2013)
Within the preliminary license period, there are some procedures  Finalization of the Contribution Fee Agreement with TEIAS (for wind
to be fulfilled by the investor which are indicated in the list below. and solar power plants)
Following the completion of the procedures, the investor shall apply  Guarantee letter (based on the formula below – Upper Limit:
to the EMRA for generation license with the following documents: 78,600,000 TRY) (the guarantee letter offered the in pre-license period
is discounted)
 License Application form
 Certificate of authorization for real persons to represent the entity PERCENTAGE
INSTALLED POWER APPLIED TO THE FORMULA
 A copy (certified by trade registrar) of the Articles of Incorporation (MWM) TOTAL PLANNED
INVESTMENT (%)
 Fact sheet of the partnership structure of the company 0 < P ≤ 10 3 P x IPU x 0,03
 License application Fee (See Table-3) 10 < P ≤ 100 2 IPU x [0,3 + (P – 10) x 0,02 ]

 Business deadline plan P > 100 1 IPU x [2,1 + (P – 100) x 0,01]

 Obtainment of ownership/usufruct rights of the power plant site

 Approval for the zoning plan of the project site P: Installed Power
 Preliminary construction plans for the facility IPU: Investment Amount Per-Unit (TRY/MWm- see the table on
“investment amount per unit” EMRA Board Decision No:4709-4 dated
 Obtainment of construction permit
21/11/2013)
 Obtainment of EIA
 Obtainment of Final Forestry Permits
The generation license period varies between 10 to 49 years. If the
 Obtainment of the permit for technical interaction with military and
facility is not constructed within the allocated construction period,
civilian air services (for wind power plants)
the license is cancelled. There are specific timelines for pre-license
 Obtainment of relevant evaluations pursuant to the Regulation on and construction periods (indicated in the tables below) identified
Military Forbidden Zones and Security Areas pursuant to the EMRA Board Decision No. 4711 dated 21/11/2013.
 Finalization of the Water Usage Agreement with the Administration

10 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 11

 Pre-license Periods a 1-year period ending no later than April 2020. The applicants may
INSTALLED POWER (P-MW) PRE-LICENSE PERIOD (months) also take the option of acquiring the project companies that have
P≤5 24 already installed relevant metering stations and thus have necessary
5<P≤50 30 metering data prior to the preliminary license application dates. The
50<P 36 applicants for the same grid connection points/regions will then be
subject to a Bidding Process of TEIAS based on the reduction (reverse-
auction) of the FIT prices indicated in the Schedule-I.
Construction Periods
TYPE OF INSTALLED POWER CONSTRUCTION PERIOD
GENERATION (P-MW) (MONTHS)
FACILITY
P≤10 22
10<P≤50 30
Wind
50<P≤100 38
100<P 46
P≤50 38
Geothermal
50<P 46
P≤10 24
Biogas/Biomass 10<P≤50 30
50<P 38
P≤10 22
Solar 10<P≤50 30
50<P 36
P≤10 18
Wave/Tidal 10<P≤50 30
Energy
50<P 38

1.2.2. Investment Opportunities for Licensed Wind Energy Market

The Energy Market Regulatory Authority (EMRA) has published
a notice to receive pre-license applications for 2 GW connection
capacities for wind power plants in April 2020. The table below
lists identified provincial capacities. The application process will
take place as detailed in Section 1.2.1.1., and the applicants will be
required to have on-site metering data of at least a 1-year period that
has been collected within the previous five years for the sites to be
used for installation of power plants. This means, the investors not
having metering data for the possible investment areas need to take
action to have metering stations installed that would provide data for

12 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 13

 Provincial Capacities for 2 GW
ALLOCATED ALLOCATED
CONNECTION CODE/ CONNECTION
CAPACITY CAPACITY
PROVINCE CODE/PROVINCE
(MW) (MW)
01/Adana 50 24/Edirne 40

02/Adiyaman 30 25/Elazig 30

03/Afyonkarahisar 40 26/Erzincan 20

04/Agri – Igdir 20 27/Erzurum 20

05/Aksaray, Kirsehir,
50 28/Gaziantep – Kilis 30
Nevsehir
06/Amasya, Samsun 40 29/Hatay 40
07/Ankara, Kirikkale,
50 30/Isparta 50
Cankiri
08/Antalya 60 31/Istanbul 20

09/Ardahan – Kars 20 32/Izmir 100

10/Artvin - Rize – 33/Kahramanmaras -
Trabzon
11/Aydin – Mugla
20

60
Osmaniye
34/Karaman - Mersin
40

50
2
12/Balikesir 50 35/Kayseri - Nigde 70 INCENTIVES FOR LICENSED
13/Bartin - Zonguldak –
Karabuk
20 36/Kirklareli 60
AND UNLICENSED PROJECTS
14/Batman - Mardin -
40 37/Kocaeli - Yalova 40
Diyarbakir -Sanliurfa
15/Bayburt - Gumushane
20 38/Konya 50
– Giresun
16/Bilecik - Eskisehir –
60 39/Malatya 80
Kutahya
17/Bingol - Tunceli 20 40/Manisa 30

18/Bitlis - Mus 20 41/Ordu 40

42/Siirt - Sirnak -
19/Bolu - Duzce - Sakarya 30 20
Hakkari
20/Burdur - Denizli -
50 43/Sivas 80
Usak
21/Bursa 60 44/Tekirdag 60

22/Çanakkale 50 45/Tokat 50
23/Çorum - Kastamonu
50 46/Van 20
– Sinop
24/Edirne 40 47/Yozgat 50

Total 2.000 MW

14 INVEST IN TURKEY
2.1. FEED-IN-TARIFFs Local Content support, which may be considered as an extra
bonus, is added to the FIT prices of the relevant renewable energy
generation facility. This additional tariff is provided for a term of
Law No. 5346 provides for a purchasing guarantee to electricity
five (5) years from the starting date of operation for a particular
generated from renewables. According to the support mechanism,
generation facility. Local content support is not provided for
licensed and unlicensed facilities generating electricity from
unlicensed facilities. Principles and procedures relating to the
renewables that are operational currently or will be in operation
definition, standards, certification, and inspection of the scope of
before December 31, 2020 benefit from the tariffs in Schedule I for
domestic production in Schedule II are regulated by the Regulation
a maximum term of 10 years from the operation date. However, the
dated 19.06.2011 on Domestic Manufacturing of the Equipment Used
new licensed projects tender regulation for applicants to the same
in Facilities Generating Electricity from Renewable Energy Resources.
connection points calls for a reverse-auction from FIT Prices.

SCHEDULE II
SCHEDULE I (Provision of the law dated 29/12/2010 and numbered 6094)
(Provision of the law dated 29/12/2010 and numbered 6094)
Type of Facility Local Production Local Content
Type of Production Facility Based on Feed-in-tariff Prices Applicable Contribution
Renewable Energy Resources (US Dollar cent/kWh) (US Dollar cent/kWh)
a. Hydroelectric production facility 7.3 A-Hydroelectric 1- Turbine 1.3
production facility
b. Wind power-based production 7.3 2- Generator and power 1.0
facility electronics
c. Geothermal power-based production B- Wind power based 1- Blade 0.8
10.5
facility production facility
2- Generator and power 1.0
d. Biomass-based production facility electronics
13.3
(including landfill gas) 3- Turbine tower 0.6
e. Solar power based production 4- All of the mechanical 1.3
13.3
facility equipment in rotor
and nacelle groups
(excluding payments
made for the blade
2.2. LOCAL CONTENT SUPPORT group and the generator
and power electronics).
C- Photovoltaic 1- PV panel integration 0.8
Law No. 5346 also provides for local content support for domestically solar power based and solar structural
production facility mechanics production
manufactured equipment used in the relevant licensed generation
2- PV modules 1.3
facility. The current legislation calls for at least a 55% local content
3- Cells forming the PV 3.5
ratio in order to be granted an incentive for a component of the module
generation facility. However that doesn’t mean full granting of the 4- Invertor 0.6
incentive; if the investor complies with the minimum threshold of 5- Material focusing the 0.5
solar rays onto the PV
55% for a component, it is granted only 55% of the incentive. For module
each and every part above the 55% local content ratio, the investor is
granted multiple incentives as listed in Schedule II.

16 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 17

 D- Intensified 1- Radiation collection 2.4 and usufruct permission fees are discounted by 85% for renewable
solar power based tube energy generation facilities during the initial ten years of investment
production facility
2- Reflective surface 0.6 and operation of power transmission lines, including those under
plate
operation.
3- Sun tracking system 0.6
4-Mechanical accessories 1.3
of the heat energy
storage system 2.4. INCENTIVES FOR PRE-LICENSE/LICENSE/SYSTEM USAGE
5-Mechanical accessories
of steam production
2.4 FEES AND TAXES
system that collects the
sun rays on the tower
6- Stirling engine 1.3 Pursuant to the Article 43.4 of the Electricity Licensing Regulation,
7- Panel integration and 0.6 for the facilities generating electricity from the local natural
solar panel structural resources and the renewables, the license holders are not required to
mechanics
E- Biomass power based
pay the yearly license fees for the first eight years following the date
1- Fluid bed steam tank 0.8
production facility
2- Liquid or gas fuel 0.4
of completion of the power plants.
steam tank
3- Gasification and gas 0.6
cleaning group Yearly license fees are calculated based on the following formula:
4- Steam or gas turbine 2.0 total electricity generated in kWh X 0.003 cent/TRY. Furthermore,
5- Internal combustion 0.9 pre-license and license application fees (listed in the Table-2 and
engine or stirling engine Table-3) for these facilities are discounted by 90% as well.
6- Generator and power 0.5
electronics
7-Cogeneration system 0.4 TABLE-2 PRE-LICENSE APPLICATION FEES (TRY PER MW)
F- Geothermal power 1- Steam or gas turbine 1.3 0 < P ≤ 10 MW 8,700
based production
facility 2- Generator and power 0.7 10 < P ≤ 25 MW 17,000
electronics
25 < P ≤ 50 MW 25,600
3- Steam injector or 0.7
vacuum compressor 50 < P ≤ 100 MW 42,700
100 < P ≤ 250 MW 85,400
250 < P ≤ 500 MW 170,700
2.3. LAND ACQUISITION 500 < P ≤ 1000 MW 256,000
P > 1000 MW 427,000
Designated forested areas, land privately owned by the Treasury, or
land under the disposal of the state in its entirety can be utilized for
the purposes of the renewable energy generation if permission is
granted by the Ministry of Agriculture and Forestry or the Ministry
of Treasury and Finance. Forestry Peasant Development Revenue
and Forestation and Erosion Control Revenue are not charged to the
renewable energy generation facilities. Permission, lease, easement,

18 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 19

 TABLE-3 LICENSE APPLICATION FEES (TRY PER MW) Table-4 Transmission System Usage Fees
0 < P ≤ 10 MW 8,700 TARIFF GENERATION - GENERATION-
ZONE SYSTEM USAGE SYSTEM OPERATION
10 < P ≤ 25 MW 17,000
(TRY/MW-Year) (TRY/MWhour) (TRY/MWhour)
25 < P ≤ 50 MW 25,600
1 31,888.23 7.17 1.40
50 < P ≤ 100 MW 42,700
2 34,764.81 7.17 1.40
100 < P ≤ 250 MW 85,400
3 35,082.33 7.17 1.40
250 < P ≤ 500 MW 170,700
4 35,536.39 7.17 1.40
500 < P ≤ 1000 MW 256,000
5 37,081.69 7.17 1.40
P > 1000 MW 427,000
6 38,967.37 7.17 1.40
7 39,190.97 7.17 1.40
Pursuant to Provisional Article 4 of the Electricity Market Law No. 8 43,168.32 7.17 1.40
6446, for all types of generation plants (including renewables) that 9 44,864.33 7.17 1.40
will be operational by December 31, 2025, transmission system usage 10 49,817.94 7.17 1.40
fees are discounted by 50% for the first five years of operation. 11 52,471.90 7.17 1.40
12 54,714.44 7.17 1.40
In the Table-4 below are listed the system usage fees determined by 13 57,059.70 7.17 1.40
the Energy Market Regulatory Authority (EMRA) for the generators 14 61,205.80 7.17 1.40

connected to the transmission system. There are 14 different tariff

zones across Turkey, each representing different substations. On the 2.5. INVESTMENT INCENTIVES
generation side, there are three types of tariffs used for total system
usage calculation per year: system usage fee for installed power,
system usage fee for actual energy inflow (in terms of MW/hour), and Pursuant to the Council of Ministers’ Decision No. 2012/3305 on
system operation fee (in terms of MW/hour). The varying tariff in the the “State Aids for Investments” the renewable energy generation
first column is paid to TEIAS as a fixed amount per MW for the total facilities benefit from the General Investment Incentive Scheme,
installed power. The fixed tariffs in the second and third columns which covers exemption from VAT and Customs Duties for all
are multiplied with the actual energy inflow (in terms of MW/hour) machinery and equipment used in the relevant power plant.
into the transmission line from the power plant. The total amount of Regardless of the region where investment takes place, all projects
all three tariffs represents the sum that must be paid to TEIAS every meeting both the specific capacity conditions and the minimum
year. However, the bills are calculated and paid to TEIAS monthly. fixed investment amount are supported within the framework of
the General Investment Incentives Scheme. The minimum fixed
investment amount is TRY 1 million in Regions 1 and 2, and TRY
Pursuant to the Provisional Article 4 of the Electricity Market Law
500,000 in Regions 3, 4, 5 and 6. However, for solar power plants, the
No. 6446, during the investment periods of the generation facilities,
General Incentive Scheme is only applied for those utilizing locally
all official transactions related to the generation facilities shall be
manufactured panels.
exempt from the fees and also the relevant papers prepared shall be
exempt from stamp duty.

20 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 21

 Kırklareli

Bartın Sinop
Edirne Kastamonu
Tekirdağ İstanbul Zonguldak Artvin Ardahan
Karabük Samsun
Kocaeli
Düzce Rize
Yalova Ordu Trabzon
Sakarya Çankırı Amasya Giresun
Bolu Çorum Gümüşhane Kars

Çanakkale Bursa Tokat

Bilecik Bayburt
Erzurum Iğdır
Balıkesir Ankara Kırıkkale Ağrı
Eskişehir Erzincan
Yozgat Sivas
Kütahya
Kırşehir
Tunceli
Bingöl
Muş
Manisa
Uşak Afyonkarahisar
Nevşehir Kayseri Elazığ Van
Malatya Bitlis
İzmir
Aksaray
Konya Diyarbakır
Aydın Denizli Siirt
Niğde Kahramanmaraş Batman
Isparta Adıyaman Hakkari
Burdur Şırnak
Muğla
Mardin
Adana Osmaniye
Karaman Şanlıurfa
Antalya
Gaziantep
Kilis
Mersin

Hatay

REGIONS 1 2 3 4 5 6

Major investment incentive instruments are:

3
Exemption from customs duties: Customs tax exemption for RENEWABLE ENERGY RESOURCE
imported machinery and equipment for projects with an investment
incentive certificate. ZONES (RE-ZONE/YEKA) MODEL
AND YEKA TENDERS
VAT exemption:
VAT exemption for imported or domestically purchased machinery
and equipment for projects with an investment incentive certificate.

22 INVEST IN TURKEY
3.1. GENERAL OVERVIEW OF THE YEKA MODEL for the power plant from available Turkish factories. The equipment
and components must have certain levels of local content ratios
as defined in the ToR’s and be compatible with the national or
The Ministry of Energy and Natural Resources issued a Regulation
international standards.
on Renewable Energy Resource Zones on October 9, 2016 in the
Official Gazette. The Regulation introduced a new investment model
to support renewable energy investments and incentivize local Unlike the licensed projects that are subject to reverse-auction from
manufacturing of renewable generation assets. The main purposes the RES Support tariffs and are eligible for further local content
of the Regulation have been identified as follows: to commission support as required by the Law No. 5346, the bidding process for
renewable energy resources much more efficiently and effectively YEKA projects calls for a reduction from a certain ceiling price that
through identification of renewable energy zones on the public, covers both the FIT and local content support. This means that the
treasury, or private-owned territories; to realize the renewable winning legal entities are not entitled to extra local content support.
energy investments much more rapidly; to manufacture renewable However, the PPA term in YEKA model goes far beyond the FIT period
energy equipment in Turkey; to use locally-manufactured equipment/ (currently ten years) required in the Law for licensed and unlicensed
components; and to contribute to research and development projects, and this period has been determined as 15 years for the 1
activities through technology transfer. GW solar power plant tender for Karapinar YEKA-1 and in the 1 GW
Wind YEKA Tender.

A renewable energy resource zone and its electrical connection

capacity utilization rights can be offered to an eligible entity In 2017, Turkey finalized the largest-ever solar power reverse-auction
under the “Allocation on the Condition of Local Manufacturing” based on the first mechanism. On March 20, 2017 a consortium of
or “Allocation on the Condition of Using Locally-Manufactured Turkey’s Kalyon Enerji and South Korea’s Hanwha Q CELLS won
Equipment” mechanisms. the tender for the construction of a 1-GW solar power plant in the
Karapinar district of the Central Anatolian province of Konya. The
winning bid was a price of USD 6.99 cent/kWh. The tender – held
In the first mechanism, the legal entity being offered the YEKA
in a reverse auction where the ceiling price per kWh was USD
and its connection capacity utilization rights must establish an
8 cent/kWh – called for 1 GW of installed capacity along with a
equipment manufacturing factory in Turkey according to the
manufacturing factory for photovoltaic (PV) equipment. Under the
standards and the terms of references (ToR). A Research and
terms of the tender, the power purchase contract will be valid for 15
Development (R&D) Center must be established by the legal
years, and the solar equipment used must be domestically sourced.
entity as well. In the R&D Center, activities must be implemented
The total investment in this solar mega project is estimated at USD
for a certain period of time and in line with the pre-determined
1.3 billion. The solar power plant will be operational for 30 years and
obligatory conditions like budget, number of employees, and staff
meet the energy needs of more than 600,000 households. The project
qualifications. In this mechanism, locally-manufactured equipment
company will also be conducting R&D activities in Turkey for at least
and other local components that are defined in the ToR must be used
10 years with the employment of at least 80% local staff.
in the YEKA. In the second mechanism, the YEKA and its electrical
connection capacity utilization rights are given to a legal entity who
wins the competition and commits to procure locally-manufactured 2017 also saw Turkey hold one of the largest wind tenders, calling
equipment and other related local components (balance of the plant) for 1 GW power installation and establishment of a local wind

24 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 25

 turbine factory. A consortium of German giant Siemens and Turkey’s YEKA Tenders in Wrap-up
Türkerler and Kalyon Enerji Holdings won the billion-dollar wind
energy tender on Aug. 3, offering the lowest power purchasing
price to the Government at USD 3.48 cent/kWh. This tender was PV Tender (March 2017)
also realized under the first mechanism with the condition to open Capacity: 1GW
up a turbine assembly plant that will supply locally-manufactured Power production capacity: circa 1.7 billion kWh
components to the 1 GW capacity YEKA WPPs. The WPPs will be Winning Bid: US$ 6.99 cent/kWh g Hanwha Q Cells–Kalyon
licensed for at least a 30-year period and will not benefit from any Energy consortium
additional premium or support from the RES Support Mechanism. Expected total investment: $1.3 billion
60% localization and R&D Investment
On May 2019, another 1 GW tender was finalized by the Ministry PPA Agreement for 15 Years
of Energy and Natural Resources under the second mechanism of
YEKA being “Allocation of the Capacity on the Condition of Using
Locally-Manufactured Equipment,” with minimum 55% localization
requirement The capacity was broken into four different Connection Onshore Wind Tender (August 2017)
Regions (Balikesir, Çanakkale, Aydin and Mugla), each being 250 Capacity: 1GW
MWe capacity. Nine local and global developers showed interest Power production capacity: circa 3 billion kWh
in the tender. With bids of USD 4 cent/kWh and USD 3.53 cent/ Winning bid: US$ 3.48 cent/kWh g Siemens-Kalyon-Türkerler
kWh, Enercon secured projects in Mugla and Balikesir, respectively. consortium
Enerjisa offered USD 4.56 cent/kWh for Aydin and USD 3.67 cent/ Expected total investment: $1.1 billion
kWh for Çanakkale. The companies will be awarded 15-year power 65% localization and R&D Investment
purchase contracts. PPA Agreement for 15 Years

Onshore Wind Tender (May 2019)

Capacity: 1 GW (250 MW for Balikesir, 250 MW for Çanakkale,
250 MW for Aydin, 250 MW for Mugla)
Winning Bids: Mugla: US$ 4 cent/kWh g Enercon
Balikesir: US$ 3.53 cent/kWh g Enercon
Aydin: US$ 4.56 cent/kWh g Enerjisa
(Sabanci Holding and E.ON Partnership)
Çanakkale: US$ 3.67 cent/kWh g Enerjisa
(Sabanci Holding and E.ON Partnership)
PPA Agreement for 15 Years
Expected total investment: 1 billion USD

26 INVEST IN TURKEY GUIDE TO INVESTING IN TURKISH RENEWABLE ENERGY SECTOR 27