PANORAMA JOURNAL – NEWS STUDY

October 2020
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How has the recession that has being experienced in the world’s economy within the last two years affected the energy sector? (in terms of both consumption and new capacity)
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1-How has the recession that has being experienced in the world’s economy within the last two years affected the energy sector? (in terms of both consumption and new capacity)
 
The developments by which all sectors are affected certainly have reflections on the solar energy sector. Moreover, one of the sectors which are affected first is the energy sector because in the production, the recession that has being experienced in the industry directly affects the electricity consumption. Despite everything, the renewable energy sector has continued to grow with the increase of the investments in the renewable energy and the tenacity and endeavor of our entrepreneurs in Turkey. According to “the Electricity Market Progress Report for 2019” of the Energy Market Regulatory Authority (EMRA), the share of the renewable energy resources in the total installed capacity increased to 45.2 percent in 2019. The share of the renewable energy resources in the total licensed electricity generation increased to 42.1 percent in 2019, whereas it was 30.7 percent in 2018.  The unlicensed installed capacity, on the other hand, increased to 6 thousand 309 MW. 92.3 percent of this consisted of the solar energy-based power plants. In the meanwhile, our Minister of Energy and Natural Resources, Fatih Dönmez, declared that "a new record was broken in the daily generation by acquiring 90 percent of our electricity generation from domestic and renewable resources on 24 May”. These are very remarkable developments. In spite of the economic fluctuations and the pandemic affecting the entire world, Turkey is taking firm steps forward in the renewable energy sector. Certainly, there are lots of grounds to be covered, but the rules of the game have changed now. The renewable energy sector, mainly the solar energy, will proceed on its way.
 
Despite all problems that occurred, we are looking at the future with hope and we consider that all renewable energy resources complete each other and it is possible to use them together for the maximum benefit. I, as a solar energy investor, can say in terms of my own sector that the solar energy is a sector which has plenty of affirmative reflections from the energy independency to the evaluation of the domestic sources, from the importation to the decrease of the current deficit, from the employment opportunities that it creates to the environmental pollution. In the meanwhile, the importance of the environment and the green energy was much more clearly understood also within the process of COVID-19 outbreak. We have learned that the most important problem related to coronavirus is the immune system. This puts forward the environmental factors and the green energy. In the present situation, the green energy is not an alternative anymore, but a necessity.
 
2-How did the pandemic which broke out upon the economic recession affect the entire energy sector in the general sense and your sector in the specific sense?
 
Certainly, the virus outbreak because of which the entire world has come to attention for health has exercised influence over the energy sector as for all economies. Recession has occurred unanticipatedly in the solar energy sector as in all other sectors. During this period, certain investments that have been planned had to be suspended also in the solar energy sector. We believe that this circumstance will be overcome by means of legal regulations to be made in the solar energy as a developing sector. At this point, we should also state that the coronavirus outbreak which has affected the entire world starting from China indicated that how a great importance the domestic and national energy has from all aspects. Accordingly, I would like to remind the importance of certain practices such as the extension of the duration of YEKDEM, the commencement of the Mini YEKA (Renewable Energy Resource Areas) procurements and the performance of the cancelled YEKA-2 procurement in terms of the development of the solar energy sector. As you know, the solar energy sector has made a very rapid progress despite the fact that it has merely a 5-year history in Turkey. The solar energy sector the history of which only dates back to 2014 carries on growing by increasing its investments which were started with the installed capacity of 40 MW. Turkey has exceeded the capacity of 6 thousand MW in the solar energy sector as of 2020 and the installed capacity increased over 70 percent only within the last 3-year period. It is one of the most important factors to sustain this acceleration acquired for the economy and development of our country.
 
We underline this issue by saying “the Solar Energy is an investment of kindness”. I say on all occasions that one who makes an investment in the solar energy is deemed to have done plenty of kindness, not one. Investment in the solar energy means kindness to the environment, kindness to the current deficit and kindness to the energy independency. The solar energy is ultimately important for a country willing to increase its share in the domestic and renewable energy resources such as Turkey in terms of the fact that it is a type of energy which has a permanent source.  For instance, the mini YEKA procurements which were declared to be performed in October will provide remarkable acquirements to our economy while reviving the solar energy sector. The power plants having a total installed capacity of 1.000 MW varying within the range of 10 to 50 MW and to be constructed following the mini YEKA procurements will reduce the energy importation of Turkey by approximately 1 billion liras per year. If these power plants are operated for 30 years, Turkey will save 30 billion liras.
 
We should remind accordingly that we live in a very prosperous country with regard to the solar energy. Turkey must notice its magnificent potential and generate its energy from its own solar radiation by incorporating its non-agricultural lands, the roofs of the factories, residences and companies into its economy in every place where it can see the sky. The way for the domestic and renewable energy resources must be paved.
 
3-Within this period, the actors of the renewable energy sector made a request from the government for the extension of the duration of YEKDEM. Could you receive a response to your request and what kind of a process is occurring in the negotiations that you are making with Ankara?
 
Yes, as you said, we, as 3 associations operating in the solar energy sector, held an online press meeting and requested the extension of YEKDEM for at least 8 months in order to prevent the investment of 700 million dollars from being put at risk due to the adverse effects of COVID-19 outbreak. In the event that YEKDEM mechanism, which will expire as of the end of this year, is not extended, the power plant investment of approximately 700 million dollars will be put at risk in Turkey. The common characteristic of these investments is that they have been financed. Furthermore, there are approximately 300 MW licensed and approximately 400 MW unlicensed solar energy capacity. For the solar energy investments not to be put at risk, we request additional time in YEKDEM. Within this framework, we applied to the relevant public institutions. We are waiting for the evaluation of our request because YEKDEM is one of the best mechanisms which were successfully applied. There is a pool at the center and all supply the electricity that they generate and to and take electricity from this pool. A support is given to certain resources such as hydroelectric, wind, biomass, biogas, solar energy which seem expensive for today. YEKDEM has generated a very critical green energy capacity in our country. We should consider it as the guarantee mechanism supporting the sectors, not an incentive.
 
4-Whereas the renewable energy investors request the extension of YEKDEM, the industrialists, on the other hand, complaint about the increase of the electricity costs due to YEKDEM. How should this dilemma be resolved?
 
I think there is false information which is required to be corrected herein. We, eight associations representing the renewable energy sector, convened a short while ago and published a joint notice in order to correct the information pollution about that the high costs of YEKDEM tariff are a burden for the industrialists. According to the study that we carried out; if YEKDEM mechanism was not present, we would not have renewable power plants with their shares up to 60 percent in electricity generation in 2019. I would have known we know that; “YEKDEM is definitely not a cost element. If Keban Dam can generate electricity and supply it to the system almost free of charge for our country today, the SEPPs will also do so tomorrow. The support process of the plant with the total installed capacity of 9 thousand MW will expire up to 2023. The number of our power plants arising from the support mechanism will increase much more within the upcoming years. From now on, the number of the power plants to arise from YEKDEM mechanism will increase in every year and more cost-effective energy will be able to be supplied to the market only with the maintenance and repair costs. YEKDEM has become a very beneficial mechanism for our country. Accordingly, now it should be seen that green energy will provide how much and cost-effective electricity in Turkey.”
 
5-Could you please share your foresights about the capacity to which your sector will reach in the short run (until the end of this year) and in the long run? What are the steps to be taken for Turkey to achieve the renewable energy target?
 
The Ministry of Energy and Natural Resources has an installed capacity target of 1.000 MW in every year and of 10 thousand MW totally within 10 years. Our sector is ready for this target with its infrastructure and experience and we can achieve it. It is estimated that the SEPP installed capacity target of 1.500 MW of the solar energy sector will be reached within 2020. The increasing electricity prices, the decreasing SEPP investment costs and the developments in technology indicate very clearly that the SEPP establishments, mainly the on-roof applications, will increasingly continue in every field. In our present day in which the importance of renewable energy is gradually being understood more clearly, we consider that the concordance and information sharing between the sector and the public authorities are an important factor in achieving the targets.

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