Turkey Wind Market Outlook 2012 by Ilko Iliev

T E K R A M D N I W Y E URK T 2 1 0 ok2 o l Out

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TURKEY WIND MARKET: OUTLOOK 2012 This market report offers an incisive and reliable overview of the wind sector of the country. With more than 1,799 MW installed cumulative capacity, Turkey was one of the fastest growing European wind energy markets for 2011. The country represents a stable investment environment in South-East Europe with expected stable growth of energy demand in the next years. Turkey has the sixth-largest electricity market in Europe and one of the fastest growing in the world. The report provides a complete picture of the market situation, dynamics, current issues and future prospects. You will find more than 50 pages of valuable information in this unique in-depth analysis of the Turkish wind market. As 2011 was challenging year for wind energy industry, the time for taking right decisions during 2012 is limited. Fast changing market environment requires relevant and accurate information. For your convenience we offer opportunity for orders with customized report content. Reasons to buy this market report include:  Brief overview of the Turkish political and economic environment  Wind resource potential in Turkey  Overview of Turkish wind energy market development 2007 ÷ 2012  Grid connected wind power plants for 2011/2012  Future market trends and planned wind projects for 2012/2013  Current market prices of fully permitted and operational wind projects  Turkey legal and energy regulatory framework for renewable projects  Key companies in wind sector  Review of most relevant financing and supporting incentives  SWOT Analysis Early bird discount of 10 % is available by the end of April 2012, together with 2 free updates about the market development by the end of 2012. At next pages you will see the full table of content of this report. To order this report just fill in and send us the enclosed at the last page order form. If you have any other questions please do not hesitate to call us on ++359 887 342 475 or write an e-mail to orders@ineaconsulting.eu

TURKEY WIND MARKET: OUTLOOK 2012

TABLE OF CONTENTS

FOREWORD ................................................................................................................ 6 1

METHODOLOGY ................................................................................................ 8

EXECUTIVE SUMMARY .................................................................................... 10

TURKEY POLITICAL AND ECONOMIC ENVIRONMENT ....................................... 13 3.1 Basic country data .............................................................................................. 13 3.2 Political Climate and Ruling Party ...................................................................... 16 3.3 GDP and Economic Growth ................................................................................ 17 3.4 Electricity Imports and Exports. Electricity prices for business and households 19 3.5 Taxes ................................................................................................................... 21 3.5.1 VAT .................................................................................................................. 21 3.5.2 Income and Corporate Taxes .......................................................................... 21

TURKEY WIND ENERGY MARKET ..................................................................... 22 4.1 General electricity market information ............................................................. 22 4.1.1 Electricity Consumption and Production ........................................................ 22 4.1.2 RES targets ...................................................................................................... 23 4.2 Wind market ....................................................................................................... 26 4.2.1 Why invest in wind energy in Turkey?............................................................ 27 4.2.2 Turkey wind resource potential...................................................................... 28 4.2.3 Overview of Turkey wind market ................................................................... 30 4.2.4 Market prices for wind energy projects in Turkey ......................................... 32 4.2.5 Development projects and operational wind power plants in Turkey .......... 33

EUROPEAN RENEWABLE ENERGY POLICY LANDSCAPE ..................................... 36 5.1 RES Regulations and EU Directives..................................................................... 36 5.1.1 Precedent EU regulations ............................................................................... 36 5.1.2 Most recent EU renewable energy policy developments .............................. 36

TURKEY RES LEGAL AND REGULATORY FRAMEWORK ...................................... 38 6.1 Main laws and regulations ................................................................................. 38 6.2 Zoning, planning and construction related authorizations ................................ 43 6.3 Environmental related authorizations ............................................................... 43 6.3.1 Natura 2000 Network ..................................................................................... 43 6.3.2 Joint Implementation ..................................................................................... 44 6.4 Energy law authorizations .................................................................................. 44 6.4.1 Power Generation Licensing ........................................................................... 44 6.4.2 Grid Interconnection ...................................................................................... 45 6.4.3 Power Off-Take ............................................................................................... 45 6.4.4 Feed-in tariff (FIT) ........................................................................................... 46 6.4.5 RES Certificates ............................................................................................... 47 6.5 Financial Incentives and Support for RES electricity .......................................... 47

TURKEY WIND MARKET: OUTLOOK 2012 6.6 Future market pricing mechanisms ................................................................... 48 6.7 Key Co-financing opportunities .......................................................................... 49 6.7.1 Turkey Sustainable Energy Financing Facility (TURSEFF) ............................... 49 7

KEY ORGANIZATIONS AND INSTITUTIONS ....................................................... 53 7.1 Government ....................................................................................................... 53 7.1.1 The Ministry of Energy and Natural Resourses (MENR) ................................. 53 7.1.2 Energy Market Regulatory Authority (EMRA) ................................................ 53 7.1.3 Ministry of Environment and Forestry (MoEF)............................................... 53 7.2 ELECTRICITY GENERATION AND DISTRIBUTION COMPANIES ............................ 54 7.2.1 TEIAS ............................................................................................................... 55 7.2.2 EUAS and IPP’s ................................................................................................ 55 7.2.3 TETAS .............................................................................................................. 57 7.2.4 TEDAS and Private distributions companies .................................................. 58 7.3 KEY WIND COMPANIES OPERATING ON TURKEY MARKET ................................ 59

SWOT ANALYSIS ............................................................................................. 61

CONCLUSIONS ................................................................................................ 66

LIST OF ABBREVIATIONS ................................................................................. 69

REFERENCES ................................................................................................... 70

DISCLAIMER ................................................................................................... 79

APPENDIX I. WIND MAPS OF EUROPE AND TURKEY .................................................. 81

TURKEY WIND MARKET: OUTLOOK 2012 LIST OF MAPS, CHARTS AND TABLES Map 1: Where is Turkey on the world map ....................................................................... 13 Map 2: Major transport corridors passing through Turkey ............................................... 14 Map 3: Turkey regions ....................................................................................................... 16 Map 4: Wind potential of Turkey ....................................................................................... 27 Map 5: Turkey Wind Energy Power Density Map .............................................................. 30 Map 6: Electricity grids network of TEIAS .......................................................................... 55 Map 7: Hydro Power Plants of EUAS ................................................................................. 56 Map 8: Thermal Power Plants of EUAS .............................................................................. 57 Map 9: Districts covered by TEDAS .................................................................................... 58 Map 10: Turkey Mean Wind Speed at 80 m, 3TIER Inc. 2009 ........................................... 81 Map 11: Mean 80-m wind speeds in Europe for year 2000 from Stanford University ..... 81 Map 12: Global Mean Wind Speed at 80 m, 3TIER Inc. ..................................................... 82 Map 13: European Wind Atlas, Risø DTU National Laboratory, Denmark ........................ 83 Chart 1: Real GDP growth for the period 2000-2012 (including estimates)...................... 18 Chart 2: Turkish GDP growth compared to EU-27 for the period 2002-2011(Q1) ............ 19 Chart 3: Electricity imports and exports for the period 2004-2011 (in million MWh) including estimations ......................................................................................................... 20 Chart 4: Corporate tax income in the region .................................................................... 21 Chart 5: Structure of Turkish electricity market ................................................................ 22 Chart 6: Share of RES electricity in gross energy consumption 2010 ................................ 23 Chart 7: Turkish RES targets ............................................................................................... 24 Chart 8: Cumulative developments of wind power plants in Turkey in MW from 2006 to 2013, including estimates .................................................................................................. 35 Chart 9: TURSEFF Structure................................................................................................ 51 Chart 10: Market Shares by Sales of the Major Utility Companies in Turkey in 2011 ...... 54 Chart 11: Share of power producers in Turkey by installed capacity ................................ 56 Chart 12: Unrestricted technical potential for onshore wind energy up to 2030, based on estimated 80 m. average wind speeds 2000 – 2005, EEA 2008 ........................................ 84 Table 1: Electricity prices for business and households .................................................... 20 Table 2: Support schemes for RES generation in the EU countries ................................... 27 Table 3: Market prices for wind projects in Turkey for 2012 ............................................ 33 Table 4: Selected operational, under construction and planned wind projects in Turkey34 Table 5: Feed-in-tariffs for electricity from wind sources in Turkey ................................. 47