Legal Background and the Previous Tenders

Turkey enacted the Regulation on Renewable Energy Resource Areas (RE-ZONEs) on 9 October 2016 (the "Regulation"). The Regulation introduced large renewable energy areas on which power plants with high installed power capacities can be constructed and operated. In 2017, two tenders (for solar and wind energy, respectively) have been completed. The Karapınar RE-ZONE, with a total solar capacity of 1 GWe, was the first RE-ZONE tendered in March 2017 and the contract was signed with a Turkish-South Korean consortium which submitted the lowest bid in the amount of USD 6.99 cent/kWh. Similar to the Karapınar RE-ZONE, a 1 GWe connection capacity, this time for wind energy, was tendered in July 2017 and the contract was signed with a Turkish-German consortium which submitted the lowest bid in the amount of USD 3.48 cent/kWh.

New Potential RE-ZONEs

On 23 March 2018, the General Directorate of Renewable Energy ("DGRE") announced that it has designated new potential RE-ZONEs for the upcoming tenders to be held in 2018. According to the announcement, i) Saros, ii) Gelibolu, and iii) Kıyıköy (all located in Northwestern Turkey) are determined as potential RE-ZONEs for wind energy projects. As for solar energy projects, i) Hatay-Erzin, ii) Niğde-Bor, and iii) Şanlıurfa-Viranşehir are listed as potential RE-ZONEs. Once the feasibility works in respect of these potential areas are completed, DGRE will announce the appropriate sites as RE-ZONEs and the tender specifications will be drafted accordingly.

Turkey's First Off-Shore Wind Power Plant

Turkey continues its efforts in the wind energy sector and strives to realise many more projects to utilise its wind potential more efficiently. Off-shore wind farms are in the spotlight worldwide since they operate at higher efficiency levels compared to wind farms on-shore. Given the fact that Turkey has a huge off-shore wind energy potential, the first off-shore tender to be held this year will be an important step to tap into such potential and contribute to the energy supply security.

Storage Pre-requisite for Future Tenders

The Ministry of Energy and Natural Resources is also planning to include battery production and electricity storage in the tender specifications as a pre-requisite to participate in future RE-ZONE tenders to secure frequency control and prevent electricity imbalances. In this context, the successful bidder of the Karapınar tender is planning to add an electricity storage facility with a few hundred MW capacity to the Karapınar power plant.

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