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The Turkish wind energy market from the developers view

The Turkish wind energy market from the developers view. Erol Demirer C hairman. EWEA 2012 Copenhagen. History: 1996 : Demirer decided to invest in wind energy In the same year more then 30 measuring masts are erected We visited leading manufacturers in Europe. 1997: Wind data analyzed

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The Turkish wind energy market from the developers view

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  1. The Turkish wind energy marketfrom the developers view Erol Demirer Chairman EWEA 2012 Copenhagen

  2. History: 1996 : Demirer decided to invest in wind energy In the same year more then 30 measuring masts are erected We visited leading manufacturers in Europe. 1997: Wind data analyzed A site near Izmir with good infrastructure and easy terrain is selected for the first windfarm 3x 500kW turbines are ordered As we had no reference and it was the first wind farm in Turkey, project financing was not an option We bought them for one of our group companies to cover the own consumption This scheme was called auto producer. The permissions and approvals were in some way easy, as the authorities were not prepared what to ask ,so they had less questions. On the other way it was difficult, as some questions on existing forms were not appropriate for wind. We were asked for example how to secure the fuel supply. 1998: The wind farm became operational as February 1998 and is still performing well

  3. B.O.T.(Build Operate Transfer) projects • In the BOT scheme a tariff for 20 years, with higher prices in the first years, was very helpful to the cashflow of wind projects • The 2. wind farm was built as BOT in 1998 Nov. • In 1999 there was a confusion about the BOT law • That was solved in 2000 with an amendment to the law • The 3. wind farm was built in 2000 as BOT by Demirer • But then the government decided to introduce free market rules for the electricity, and froze other BOT projects on the pipeline • The application as private electricity company was possible but not feasable because of cashflow in the first years

  4. Our 17x600kW Bozcaada farm could keep its position being the largest WF for 6 years until the Renewable Energies law came

  5. Turkish Wind EnergyInstalled Capacity

  6. Renewable energy law: • 2005 original : • all RE will be purchased with the wholesale price average of the previous year. • The producers have the option to sell on the spot market if they choose to do so. • Long term credits are only available in Euro or USD =>parity risk • 2007 amendment: • The applicable purchase price can not be lower than 50euro/MWh and higher than than 55 euro/MWh • In practice this law is used only as reference basis for worst case scenarios with the banks and not a single kWh is sold according to the law. • Market • The spot price was always above 55 euro/MWh and reached in 2007 even 75 euro/MWh • The investors made their calculation regarding the spot market and showed high demand • As the given licences surpassed 3,000MW, TEIAS ,the grid company informed EMRA Electricity Market Regulatory Authority that the grid could reach its limits soon. And EMRA stopped to accept any more licence applications.

  7. November 2007 applications • EMRA opened applications for one day • The market prices were at top level • And that was the only chance since two years (and most probably for several coming years) • Result:78,000MW application (including some off-shores) • The system was blocked

  8. November 2007 solution • EHV(380kV) applications should be revised to HV(154kV) • Applications above the (154kV) grids connection capacity will compete on basis of additional connection fee per kWh . • Result: • 2,000MW will get licences without competition • 28,000 will compete for 5,500MW

  9. Licenced or to be licenced projects My estimation :out of 11GW, under current conditions 6.7GW will be operational until 2015

  10. Where to sell? • Spot market: • Very much dependent on natural gas prices • 2010: 88 USD/MWh average • 2011: 80 USD/MWh average • Or Feed-in law • Basis price : 80 USD/MWh for ten years (functional) • Plus for local production of equipment max 37 USD/MWh bonus for 5 years ( yet not functional) • Switching on yearly basis • Add 7 USD/MWh carbon income with VER certificates

  11. Market price vs. feed-inspot2010:$88.46; 2011: $80.23 $73;$79;$87;$97;$110

  12. Conclusions: • To investors: • Until 2015 4,900MW feasible projects will be build up • To equipment suppliers: • 4,100MW equipment not contracted yet • Actually electricity priceis supressed by state owned power plants with paid back depreciations • These power plants will be privatised soon • Private companies who pay fresh money for take over, will calculate higher production costs

  13. Thank you for attentionI will be pleased to answer further questions

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