Photo: Acwa
Saudi Arabian energy utility Acwa agreed to build two photovoltaic plants in Turkey, of 1 GW each. It is the first phase of a 5 GW plan, which includes wind power and is worth an estimated USD 5 billion.
Within the framework of the intergovernmental agreement between Turkey and Saudi Arabia, deals were signed in Istanbul for a giant solar power plant in Taşeli in Karaman province, and another one in Sivas province. The investment in 2 GW overall, estimated at USD 2 billion, is the first phase of a program for photovoltaics and wind power, worth USD 5 billion.
Saudi Arabian partly state-owned utility Acwa signed the key terms for an investment agreement with the Turkish Ministry of Energy and Natural Resources for the 5 GW of renewable energy capacity. The company agreed to develop, finance, construct, commission and operate the two facilities, of 1 GW each.
Acwa also concluded power purchase agreement (PPA) key terms with Turkish government-controlled Electricity Generation Corp. (EÜAŞ) for electricity from the two facilities. Of note, the Saudi energy behemoth built the Kırıkkale combined cycle natural gas power plant in Turkey in 2017. It has 927 MW in net capacity.
In the announcement, Acwa said it is the world’s largest private water desalination company and a first mover in the green hydrogen segment.
Acwa to receive EUR 47.5 per MWh for first five years
Minister of Energy and Natural Resources Alparslan Bayraktar recalled that the price for Sivas is 1.995 euro cents per kilowatt-hour (EUR 19.95 per MWh), the lowest so far in Turkey, and that the deal for Taşeli is 2.3415 euro cents per kilowatt-hour.
The arrangement is for 25 years, but there is also a five-year incentive mechanism before that, the minister pointed out. He said it is similar to the Renewable Energy Zones (REZ) scheme, which is better known by its Turkish acronym YEKA.
The first megawatt-hours are scheduled to flow in early 2028
Bayraktar explained that Acwa, instead of the right to sell on the free market, would be entitled to 4.75 euro cents per kilowatt-hour for five years. It is below the average market price, he stressed.
The minister expressed confidence that construction would start this year. Both solar power plants will begin operations in early 2028, and will “reach full capacity as soon as possible,” according to Bayraktar.
He revealed that international financial institutions have expressed interest in financing the project. The minister mentioned the European Bank for Reconstruction and Development (EBRD) and the International Finance Corp. (IFC). In addition, Bayraktar said the renewable electricity plants from the 5 GW deal could be combined with energy storage and data centers.
Solar, wind power combined climb to 33% of electricity capacity in Turkey
Separately, the ministry said that wind power and photovoltaics reached a combined share of 33% of the country’s electricity capacity. Turkey had 123.3 GW at the end of January.
All renewables accounted for 77.1 GW or 62.5%. Solar power hit 25.8 GW, compared to 14.9 GW of wind.
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