WILL NEW ENERGY BOOM IN TURKEY?

Turkey Lays the Foundation for an Altnernative Energy Rush
Susanne Fowler, October 20, 2009 (NY Times)

"…[S]ome investors in renewable energy projects say they are troubled by…[the] slowness by Turkey’s government in moving to privatize its energy markets and take advantage of its capacity for generating wind power…

"In 2005, Turkey passed a Renewable Energy Law to bring the country more in line with European Union regulations. But the tariff structure offering a government guarantee of about 5 euro cents per kilowatt hour is widely seen as discouraging to investors because the rate is lower than in most European countries…A proposed revision… is now before Parliament in Ankara and could improve the system…[and allow Turkey to get 35 percent of its energy from hydro, 25 percent from wind, 10 percent from geothermal and the rest from gas and oil]…"

Turkey certainly has the wind. (click to enlarge)

"…[New Energy] is also a sector in which people hope to make money. The amount of wind power installed in Turkey nearly tripled in 2008 and was set to expand further this year. Energy and Natural Resources Minister Taner Yildiz said…his government was ‘resolute’ about expanding renewable energy sources…That is good news for Turkish companies trying to increase their share of the renewables market. Agaoglu Group, for example, recently purchased Galata Wind, a unit of the Dutch-Italian company Relight…[and its] three wind farms with a total capacity of 203 megawatts…[for] $500 million.

"The largest single wind project in Turkey is the Gokcedag Wind Farm in Osmaniye, in southern Turkey between the cities Adana and Gaziantep. There, Rotor Elektrik, a member of Zorlu Energy Group, is installing 54 turbines built by General Electric. The project is designed to raise Turkey’s current 500 megawatt wind energy capacity by about 30 percent. Turkey’s potential for wind power generation, according to its Energy Ministry, is 48,000 megawatts."

Will Turkey's leadership act to sustain the boom? (click to enlarge)

"Financing for the €210 million, or $313 million, project comes from a blend of lenders. The International Finance Corporation, a member of the World Bank Group, is providing €55 million; the European Investment Bank is lending €30 million; and additional guarantees are coming from HSBC and DenizBank…Osmaniye…[is] also the first project in Turkey to have the support of the European Bank for Reconstruction and Development, which decided to redirect some of its lending capacity to Turkey, the sixth largest electricity market in Europe, at a time when the debt crisis was slowing the process of privatization…

"…[L]ike Turkey’s hydroelectric dam projects, expansion of the wind sector provokes some concerns among environmentalists…[But investors see] wind energy as a boon for the Turks themselves…"