Demand reaches record in solar power auctions for 1 GW in Turkey

Companies responded to a call for the development of solar power plants across Turkey with 9.6 times more bids than available lots as the government is preparing auctions for 1 GW in 36 provinces.

After several delays, Turkey received applications under its Renewable Energy Resources Area (YEKA) program for photovoltaic plants with the capacity of 10 MW, 15 MW and 20 MW. Minister of Energy and Natural Resources Fatih Dönmez said the offer for the development of 74 solar power plants attracted 709 bids or 9.6 times more, marking a record. The facilities will be spread throughout 36 provinces and have a combined capacity of 1 GW.

The auction register shows applications for 9.44 GW in total, putting the oversubscription rate at 9.44. The ceiling was set at USD 47 per MWh and the lowest price determines the winner, who gets a 15-year power purchase contract together with a prelicensing period of a few years, where the length depends on the size of the facility. The auctions should start next month.

Domestic sourcing is crucial

Developers must secure that almost three fourths of the equipment and services are domestically sourced as Turkey is determined to support its industry. They could apply for YEKA GES-3 auctions from March 8 to March 12. According to some estimates, the investments could near USD 1 billion and cover the electricity demand of 1.23 million households.

Total investments are estimated at nearly USD 1 billion

There were 65 applications for three solar power plants of 10 MW each in Aksaray, topping the chart. The province is located in the central part of Turkey. Potential investors placed 33 bids for two units with the capacity of 15 MW in Burdur, followed by 31 applications for two photovoltaic plants of 10 MW apiece in Nevşehir.

Changing investor profile to motivate small, middle-sized businesses

Turkey aims to reach a rate of 65% by 2023 for domestic and renewable sources of energy. Dönmez earlier said the auctions were intended for small to medium-sized enterprises and that they may change the investment culture and investor profile.

Renewable energy constituted 98% of the 4.9 GW in total capacity that came online in 2020, he revealed. The share of the segment reached 49.5 GW or 51.7%, Dönmez said.

The first YEKA auction was held in 2017 for a 1 GW solar power plant, which is under construction. The tariff landed at USD 69.9 per MWh. In the same year, a auction for wind power plants was conducted for a matching capacity and the Siemens-Türkerler-Kalyon won with a final price of USD 34.8 per MWh.

Enerjisa and Enercon were picked in 2019 for four wind power plants of 1 GW in total and the prices ranged from USD 35.3 per MWh to USD 45.6 per MWh.