Turkey is rapidly becoming a very important market player in its
own territory with an ambitious targets in energy sector. As it is
seen from 2023 projection of Turkish government, renewable energy
resources will come into prominence with highly concentration on
increasing productivity of hydroelectricity power plants. The main
target for 2023 is providing 30% of total electricity demand from
renewable energy sources. Currently 25% of total energy generation
is met by hydropower. According to latest forecasts, between 22%
and 27% of Turkish total energy demand is expected to be supplied
by hydropower plants.
What are the pros and cons of hydropower ?
From the economic perspective, hydroelectricity power plants
requires lower operating and maintenance cost with long run life in
comparison with other types of power generators.
Energy efficiency rate is higher than other renewable
Hydropower is considerably beneficial for sustainable
development. To illustrate, hydroelectricity power plants help to
enhance air quality and fight with climate change.
Improve living conditions by providing employment opportunities
Brings technological development mostly by foreign contractors
that also provides fundraising for small or large scale hydropower
The storage capacity of reservoirs may be amendable in terms of
Hydropower plants are long run investments that requires long
term planning agreements with third parties.
Governmental process may take a long time for obtaining
relevant permissions and licenses.
Water quality must be observed frequently for the purpose of
energy manufacturing forecasts.
Regulations and Opportunities
In accordance with article 6/A of Renewable Energy Sources
Law Code 5346,hydroelectricity power plants are subject to
permission of General Directorate of State Hydraulic Works
("DSI") for the purpose of granting water usage
authorization. Additionally, provincial state administrations are
authorized bodies for permitting construction of hydroelectricity
power plant provided that they receive opinion of regional
Besides, Enacted Environmental Effect Assessment bylaw,
hydroelectricity power plants shall be implemented environmental
effect assessment by Ministry of Environment and Urban Planning on
condition that their installed capacity exceeds 25 MW. Provided
that installed capacity is between 1-25 MW, selection and
elimination process shall be applied.
Turkish government also supports hydropower investments with
feed-in tariffs (FITs). Enacted Law Code 6094 indicated that 7.3
dollar cent/kWh guaranteed repurchase will be ensured. Moreover,
provided that local equipment is applied such as turbine or
generator for hydropower plant establishment, additional 2.3 dollar
cent/kWh will be guaranteed. These feed in tariffs have been
extended until 2020 if a licensed operator is willing to benefit
between 2016 and 2020 under the incentive of Renewable Energy
Resources Support Mechanism.
Attractive benefits for foreign investors are not limited with
feed in tariffs. Furthermore, hydroelectricity power plant projects
are subject to General Incentives Scheme which provides VAT and
customs duty exemption. Particularly, it is expected to see a great
number of foreign investment funds with the intent of benefit from
incentives and this emerging renewable market in an emerging
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Turkey has amended the Electricity Market Law numbered 6446 to promote use and security of domestic energy resources. Under the amendments, planned capacity mechanisms must give priority to local energy sources.
Turkey's energy regulator previously ruled (decision numbered 5709, dated 30 July 2015) that a total capacity of 2,000 MW would be reserved in the period up until 2020 for wind power pre-license applicants to connect to the grid.
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