David O'Byrne in Istanbul -
It's been a long time coming, but if, as expected, Turkey's new renewable energy law is passed by the Turkish parliament when it reconvenes in September, the move promises to herald a major revolution in the country's energy sector.
Offering guaranteed minimum prices for the electricity produced by a full range of renewable power sources, the new law is reckoned by many in the Turkish energy industry to be just what the country needs to break its dependence on expensive imported gas and low-grade local coal. "The guarantees are fine, but investors and financiers need to see the law passed," says Christian Johannes of Re-Consult, an Ankara-based wind energy consultancy, which has worked with many companies active in the sector.
Injecting a note of caution, essential in a business notorious for its false dawns, Johannes warns that the law could get delayed by a clause that offers higher guaranteed prices to wind farms using Turkish-made turbines, which is potentially in breach of EU law. Murat Durak, head of Turkey's Wind Energy Association, says some small changes to the legislation may indeed have to be made, but reckons the law will be passed and the guarantees will be sufficient to ensure the banks will be happy and projects will get the finance they need.
That's good news for wind farm developers, several of whom complain that convincing banks to support their projects has been difficult, as evidenced by the 2,500 megawatts (MW) of wind farms that have been licensed but yet to begin construction. "The business model for hydro projects is well established and the banks are happy to back those, but with only a few wind farms in operation, and with the renewable energy law still not passed, they are still not convinced that the projects can be viable," explains one developer, who asked not to be named.
That reluctance to invest in an untried model coupled with long running battles over establishing a workable legislative framework for establishing wind farms, not to mention further problems with connecting into the country's antiquated national grid, have left Turkey a long way behind other countries in developing wind power.
Despite being reckoned to have the fifth highest wind power reserves in Europe, Turkey currently has only around 450 MW of wind power in operation, and lies 20th in the global table of wind power development, way behind the top-placed European country of Germany with almost 24,000 MW.
With the new renewables law in place, that situation should change dramatically. Mustafa Kemal Buyukmihci, head of Turkey's Electrical Power Resources Survey and Development Administration, announced recently that a new licensing round will be held in the next two months with the aim of boosting Turkey's wind power capacity to 11,600 MW by 2013, a figure many view as achievable. "We're expecting another 7,000 MW of licenses to be issued by 2010," says Johannes.
Most of that new capacity will come from the 700 new project applications totalling 78,000 MW made in an open tender held in 2007. Many of those projects are competing applications for the same sites, but experts still reckon that as much as 40,000 MW could eventually be built, with up to 15,000 MW feasible in the medium term given current projections for demand growth.
However that level of wind power would require significant investment in Turkey's antiquated transmission grid, which has problems coping with the variable generation produced by wind farms. "In its current state, the grid can handle around 11,000 MW of wind power," explains Johannes. "After that, it requires serious upgrading."
Renewable energy development in Turkey isn't confined to wind and hydro power. The country's numerous hot springs, which spawned the world famous "Turkish baths," now look set to spark a revolution in geothermal energy.
Local companies have snapped up licenses to drill for hot water all over central and western Turkey. The sector leader with a portfolio of 142 licenses covering over 7,000 square kilometres is Ankara-based BM Holding. With 3D seismic surveying of its blocks well underway, BM has already struck water at 200ÂºC on one site - more than ample for a power plant.
The company plans to drill a further six wells this year before making an investment decision, but according to group coordinator Hakan Kazanc, the firm is already considering a novel twist - namely building a hybrid geothermal and concentrated solar power plant. Put simply, the plant would use the naturally produced geothermal steam to power a conventional steam turbine before cycling the still hot water into a solar concentrating tower, where it would be reheated to steam by mirrors reflecting sunlight and used to power a second turbine, before finally being pumped back underground to be reheated again
Geothermal power plants exist in many countries, including Turkey, and the world's first commercial concentrated solar plant is already producing power in Seville in Spain, but to date, points out Kazanc, no one has ever tried putting the two together in the one plant. A move that could prove as groundbreaking as it could be profitable thanks to the generous off-take guarantees that are included in Turkey's new renewables law. Now, if only parliament would pass the bill.
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