About the Project:
Turkey has begun a new chapter in its long-term policy on renewable energy with the Regulation on Renewable Energy Resource Areas ("RERA"), which came in force in October 2016. RERA establishes another set of incentives designed to encourage the effective and efficient use of renewable energy resources on state- and treasury-owned as well as privately owned sites in Turkey.
According to Turkish Electricity Transmission Corporation's data, at the end of 2017, Turkey's wind capacity totalled 6,517 MW, up 13.3% on the year, while solar capacity reached 3,420 MW, up 311% on the year, with a further 416 MW worth of solar plants holding preliminary licenses.
A central plank of the policy on renewables is the recently announced RERA Offshore Wind Power Farm project – Turkey's first and the world's largest offshore wind farm, which is expected to yield investment of USD 2-3 billion. The wind farm should start generating electricity in 2023 – coinciding with the 100-year jubilee of the Republic of Turkey – with a total capacity of 1,200 MW.
The tender announcement for the RERA Offshore Wind Power Farm was published in the Official Gazette in Turkey on June 21, 2018. Bids will be accepted until 12 a.m., 23 October 2018.
Saros (Edirne-Enez, Keşan), Kıyıköy (Kırklareli-Vize) and Gelibolu-Şarköy (Çanakkale-Tekirdağ) are among the nominee regions for the project.
The investors contracted for the project will establish the offshore wind power plant by choosing either two (2) of the listed areas or two (2) other areas it has selected itself, provided it carries out the necessary measurements and surveys. The investor must first start work on an 840-MW power plant and then continue with the remaining part to reach a total of 1,200 MW.
The investors will be able to use the remaining capacity as long as they:
- notify the Ministry of Energy and Natural Resources, General Directorate of Renewable Energy ("Administration") in writing within forty-two (42) months following the signing of the agreement; and,
- complete the installation within seventy-two (72) months.
As for the tender qualifications, legal entities or partnerships formed from multiple legal entities or consortia are allowed to apply for the tender. In order to obtain the tender specifications, groups must pay twenty thousand Turkish Lira (app. EUR 3,700). The amount has to be deposited in the bank account determined in the Official Gazette.
In addition, a partially or completely cash convertible definite letter of guarantee of one (1) year amounting USD 20,000,000 should also be submitted to the Administration.
The winning party will be obliged to submit a letter of guarantee of ten (10) years amounting to USD 100,000,000 to the Administration prior to the execution of the energy sales agreement.
The Official Gazette indicates that the ceiling price for electricity produced at the country's first offshore wind farm will be set at US Cent 8 (eight)/KWh and that the tender will be carried out through an auction by underbidding. The investor who submits the lowest bid will execute an agreement, including the first 50 TWh of electricity production starting from the temporary admission.
The tender location, date and time will be announced by the Administration.
In the event that the 1,200 MW of electricity is to be established gradually, the investors will be required to apply for separate preliminary licenses for the mandatory 840 MW and the remaining capacity amounting to 360 MW. The right to use the remaining capacity will be terminated if the investor does not make the necessary statement within forty-two (42) months or does not put the remaining capacity into use within seventy-two (72) months.
The license period is determined as 30 (thirty) years.
Importance for Turkey:
RERA states that around 60% of the wind turbines for the offshore power plant must be domestically manufactured in partnership with Turkish organized industrial zones and that 80% of the engineers taking part in the project must be Turkish citizens. Each turbine must have a capacity at least 6 (six) MW.
Training sessions will also be organized to provide qualified staff for the project. The trained staff will gain expertise about the offshore platforms to be constructed in Turkey and worldwide, including oil and gas platforms established at sea.
Turkey's first offshore wind power farm is expected to contribute to various sectors including logistics, cable production and manufacturing.
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.