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• |Turkey
• |Energy Sources

Electricity

Turkey consumed 174.2 billion kWh (supplied 176.3 kWh) of electricity in 2006. Installed capacity reached to 40 565 MW in 2006 (40 984 MW in 2007) and the breakdown of this total installed capacity and generation are shown in the following table.

Table: Electricity production balance in 2009

In 2006 59.6 % of electricity production were realized by private producers. State Owned Company, EUAS, with a 49 % share of Turkey’s installed capacity, produced 40.4 % of total electricity in 2006.

Considerable changes have taken place in recent years in the distribution of the sources used in the electricity sector. Fuel switching in power generation has been significant over the past two decades as coal-fired plants have increasingly been replaced by gas-fired ones. When the distribution of the electricity production by fuel types is examined, it is seen that the production level of the hydraulic power plants’ share in the total production decreased from 44% in 1985 to 25 % in 2006 and it is expected to decrease 17 % in 2008. Build-Operate-Transfer models have been carried out since 1989 and Build-Operate models began to be carried out in the following years. Natural gas power plants were put into service within the scope of build-operate model, which leads to a rapid increase in the share of natural gas in the total production. The share of the natural gas sourced electricity generation in the total power production increased from nearly zero percent in 1985 to 45 percent in 2006 and it is expected to increase 49.1 % in 2008. In 2006 the share of thermal power plants in the total production reached to 75 percent and a considerable increase has been observed in the share of the natural gas power plants in the production while coal and liquid fuel power plants lost their dominance.

Nuclear Energy

Although a nuclear power plant has been on the agenda of the Government since the early 1960s, Turkey does not have any nuclear power plant in operation or under construction. Attempts by the Government in 1960, 1968, 1974 and 1998 in various provinces such as Sinop and Akkuyu have all failed. Despite thorough research, detailed preparation efforts and tender processes for such projects, all of them have failed for different reasons.

Turkey’s latest effort to construct and operate a nuclear power plant commenced in the early 2000s. Sinop, a province on the Black Sea coast, was determined as the location for the power plant. Law No: 5710 To Build and Operate Nuclear Power Plants and Sell the Energy (November 21,2007) was issued to regulate the details of the tender for companies bidding to build and run the power plants. The law enables the government to grant purchase guarantees to firms for the total energy produced in nuclear power plants.

With this Law a new era for a Turkish nuclear program started including the construction of the first Nuclear power plant. The share of nuclear power plants in electricity generation will be targeted as minimum 8 percent until 2020, and 20 percent until 2030.
TAEK is the Authority responsible for determining the basis of the national policy and the related plans and programs regarding the peaceful utilizations of nuclear energy; giving approval, permission and licenses related to the site selection, construction, operation of nuclear installations; executing and supporting research, analyses and studies related with the utilization. TAEK is also the responsible organization for nuclear safety and for enhancing nuclear related activities in Turkey. There is currently no regulatory agency for nuclear power, however with the new draft law, it is envisaged to establish a separate regulatory body by restructuring TAEK.
The international bidding deadline for the first nuclear plant was announced as of September 24, 2008. Although 13 consortiums had shown their intention for bidding by purchasing the Terms of Reference of bidding, only five of them participated in the bid and one of them handed in a bid. The Government has not announced a decision yet and is workind on a new road map.

Oil & natural gas

Oil

Compared to its neighbours Turkey is not well endowed with oil. However, with increasing activity in relatively little explored areas of the country and the recent move to offshore areas the amount of domestic oil and gas reserves is expected to increase., albeit the sizes of new discoveries will be comparatively small.
In accordance with theoretical calculations, 954.5 million tons of oil reserves exist in Turkey and 168 million tons of this reserves are extractable. The current available amount of extractable oil, is around 41.5 million tons, as of 2006.

Oil production has been declining since 1990 and it is expected that this trend will continue in the following years. State owned Turkish Petroleum Corporation (TPAO), alone accounted for about 70 % of the country’s total oil output. The rest of the production was mainly realized by domestic and foreign companies such as N.V. Turkse Perenco and

In 2006, crude oil production was realized as 2.2 million tons which constitutes 7% of oil demand of the country. Most of the production has been realized in the southeast of Turkey. At the end of December 2007 there were 41 companies holding 391 exploration licenses (covering an area of 365,780 km2) in Turkey, half of which belonged to TPAO and its concessions, while the other half to private sector.

As domestic oil production is limited in Turkey, most of the demand must be imported, mainly from the Gulf region, the Caspian Sea area, Iran, Iraq, Saudi Arabia, Russia and Libya. Turkey has imported 90% of its oil consumption in 2006. This is a big burden for the country especially facing the increasing price trend on international oil markets. For example, Turkey’s crude oil imports went up only slightly in the past 8 years (from 21.1 Mt in 2000 to 23.5 Mt in 2007) but import bill in that period nearly tripled (from $4.2 billion in 2000 to $11.8 billion in 2007, $15 billion in January-April 2008). The amount of imported crude oil and oil products which have 46.5% share in total energy imports is 37.4 Mtoe. Oil consumption of Turkey has reached from 8.3 million tons in 1990 to 31.4 million tons in 2006 with average annual growth rate of 2.2 %and expected to reach 69 M tons in 2020.

Oil Stocks

Turkey is a member of the International Energy Agency and regularly informs the secretariat of the agency about oil stocks. All emergency preparatory measures are undertaken by the General Directorate of Petroleum Affairs which is responsible for the monitoring and control of petroleum stocks. For the establishment of the Authority of a National Oil Stock Agency a draft law is under discussion. This Law comprises the rights and obligations of all real and legal entities related to the maintenance of a national oil stock as well as the methods and principles pertaining to the establishment of the Authority of a National Oil Stock Agency. National oil stock is kept in an amount of at least 90 days’ amount of the net import in the previous year’s average daily consumption.

Crude oil pipelines

Oil transportation activities are carried out by various pipelines. The main crude oil pipelines are Baku-to-Ceyhan (BTC), Batman-Dörtyol, Selmo-Batman , and Yumurtalik-Kirikkale. After the commissioning of BTC (July 2006), the total length of the crude oil lines in Turkey reached 3,374km and the nominal capacity is 130.2 Mt/year.

Turkey-Iraq Crude Oil Pipeline with 1876 (1297 km in Turkey) km total length has an annual capacity of 70.9 million tons. It was constructed to transport Iraq crude oil from Kerkuk and other production sites to Ceyhan-Yumurtalik plant. This pipeline has two parallel lines, which were put into operation in May 1977 and August 1987, respectively. After the Gulf crisis, economic sanctions against Iraq caused the closure of these pipelines. After the UN vote on the resolution to release Iraq to sell oil amounting to US$2 billion over a period of six months, the pipeline started to operate again in December 1996. After some small scale interruptions for different reasons, the transportation of oil has resumed below its full capacity since February, 22, 2004. 5.9 million tons (43.7 million barrels) of oil were transported in 2007 by this pipeline
The Ceyhan-Kirikkale Crude Oil Pipeline, which has an annual capacity of 5 million tons, supplies crude oil requirement of Kirikkale Refinery. The length and diameter of the pipeline are 448 km and 24” respectively.
The Batman-Dörtyol Crude Oil Pipeline transports oil produced in the Batman Basin to Dörtyol Marine Port, at an annual capacity of 3.5 million tons. Its length is 511 km at a 18” diameter.
The Selmo-Batman Crude Oil Pipeline has the length of 42 km and transports the oil explored from Selmo Basin to Batman Port. Its annual capacity is 800 000 tons.
BTC Crude Oil Pipeline: The BTC main export pipeline is designed with a nominal capacity of 50 Mt/year. It originates in Azerbaijan and is intended to transport Caspian crude oil to the deepwater port of Ceyhan. The pipeline was commissioned in mid-2006. The BTC line stretches 1,776 km (1076 in Turkey) through Azerbaijan, Georgia, and Turkey. The BTC pipeline allows oil to bypass the crowded Bosporus and Dardanelles Straits and is also the first pipeline able to export oil from the Caspian Sea that does not cross Russian soil. The pipeline is owned and operated by a consortium of 14 led by BP. In May 2006, Kazakhstan formally joined the BTC project and delivers 5 Mt Kazak crude oil per year via tankers to Baku. The BTC pipeline transported 57 million barrels in 2006 and 211.2 million barrels of crude oil in 2007.

Natural gas

The first commercial natural gas field in Turkey was discovered in 1970 by TPAO in the Hamitabat and Kumrular region. After the discovery of the Camurlu field in 1975, natural gas started to be consumed at the Mardin Cement Factory in 1975 and the Pinarhisar Cement factory in 1976. Meanwhile, negligible amounts of domestic gas production have been used in Thrace region in some industrial plants.
BOTAS, a state owned company, was initially founded on August 15, 1974 by TPAO (Turkish Petroleum Corporation) under the Decree No 7/7871, for the mission of transportation of Iraqi crude oil to Turkey. In 1987 BOTAS has expanded its original mission of transporting crude oil through pipelines to cover the natural gas transportation and trade activities, gaining therefore a trade company identity.
BOTAS’s monopoly rights on natural gas import, distribution, sales and pricing, granted by the Decree of Natural Gas Utilization No. 397 dated February 9, 1990, have been abolished by the Natural Gas Market Law. The Law covers import, transmission distribution, storage, marketing, trade and export of natural gas and rights and obligations of all real and legal persons related to these activities. However, the status of BOTAS, as monopoly for the import, distribute, transport, storage and sell, was terminated after the enactment of the Natural Gas Market Law which went into effect as of May 2, 2001. Objectives of this Law are to set up a path toward a free market where the private sector will prevail, create competitive environment, decrease influence of the government and encourage the investors in gas market. BOTAS has been carrying on its activities as a major market player pursuant to the Natural Gas Market Law No. 4646. The current status of BOTAS will continue until 2009. After this date, BOTAS shall be restructured into a horizontally integrated legal entity. BOTAS currently covers 98 % of domestic transmission.

Natural Gas Production and Consumption, Transportation, Facilities and Trade
According to Petroleum Affairs (PIGM), until the end of 2007, some 22 billion cubic meters (cm) of gas have been discovered in Turkey, 75% of which is recoverable. A bit more than half of the recoverable amount has already been produced, leaving 7.4 billion cubic meters yet to be produced. Of the total remaining reserves, 27% are offshore and 73% are onshore.

Source: PIGM

Domestic production of natural gas amounted to 900 million cm in 2006. Natural gas consumption increased rapidly in the middle of 1980s and made up 28,6% of total primary energy supply in 2006.

Domestic natural gas production by years (Million cubic metres)

 Source: Tülin Keskin

In 2007, 13.799 Million cubic metres of natural gas were imported from the Russian Federation through Gazexport and Turusgas, and another 9.346 Million cm of natural gas were imported via the Blue Stream Pipeline. Nigeria provided 1.420 Million cubic metres and 4.277 Million cubic metres were importet from Algeria. 170 Million cubic metres were imported from the LNG spot market. Another 6.158 Million cm Natural gas from Iran and 1.279 Million cm from Azerbaijan were imported. Therefore the total import volume of natural gas reached 36.450 million cum in 2007. 35 064 Million cm of natural gas was sold to the power, fertilizer, industrial and residential sectors in 2007.
In order to extend the usage of natural gas in the country and not to face any undertakings according to the Agreements with the conditions of “Buy or “Pay” construction of natural gas transportation lines are being rapidly completed. As of 2007, transportation lines of 9.800 km have been constructed and natural gas was supplied to 54 cities. The target is the fact that all cities could use natural gas until the end of 2009. Natural gas transmission has reached almost every part of Turkey. After completion, some transmission pipelines already face capacities deficiencies. Additional loops were constructed to solve these problems.

The power generation sector is the largest consumer of natural gas, but industrial consumption has also been growing strongly. Natural gas demand for power generation is driven by power plants constructed under BO and BOT contracts. Currently, 4 BO, 4 BOT and 3 state-owned power generation facilities use gas. In 2007, natural gas consumption in BO, BOT and state-owned power plants reached to 19.7 bcm. Gas consumption for power generation was 56 % of total gas demand.

Turkey is highly depended (81%) to Russia and Iran for the natural gas supply and the fact that Russian and Iran reduced and stopped gas supply in January 2006 and January 2007 and 2008 point out the necessity of well planning of supply security of Turkey.

Gas Storage

Lack of enough natural gas storage capacity is the weakest part of the natural gas system in Turkey. Over the recent years, gas consumption has increased rapidly. At the same time, the country still does not have the ability to store gas as either a large scale buffer for meeting seasonal and daily variations of demand (especially on cold winter days), or as a back-up in case of interruptions of supply. Studies are underway to determine where to build underground natural gas storage facilities in order to meet demand and regulate the balance between demand and supply where and when required. Currently, only one underground storage facility exists: Silivri natural gas storage facility, with a capacity of 1.6 bcm. It started operating in April 2007. Another one (Salt Lake –Tuz Golu underground facility which is being developed in the Tuz Gölü Basin, 20 km south of Kayseri-Konya-Seydisehir Natural Gas Pipeline with a capacity of 1 bcm/year and 4 bcm/year of expansion potential) is planned to be operational in 2015.

Natural gas Pipelines

By the end of 2007 the total length of natural gas pipelines (international and inland) of the Turkey has reached 9798 km.

The Russian Federation -Turkey Natural Gas Main Transmission Line, which enters Turkey at Malkoçlar at the Bulgarian border, to Hamitabat (started operation on June 23, 1987).

Another line, the Eastern Anatolia Natural Gas Main Transmission Line conveys natural gas produced mainly in Iran and other countries east of Turkey. The line starts from Dogubayazit and reaches Ankara through Erzurum, Sivas, and Kayseri, another branch reaches Seydisehir through Kayseri and Konya. Natural gas delivery from Iran started on December 10, 2001 with the completion of Bazargan Metering Station in Iran.

The Russian Federation-Black Sea-Turkey Natural Gas Pipeline (Blue Stream) stretches from Izobilnoye - Djubga in the Russian territory, crosses the Black Sea entering Turkey in Samsun and continues to Ankara. The line came into operation on February 20, 2003, and official inauguration was on November 17, 2005. Today the total length of transmission pipelines exceeds 10,000 km.

In July 2007 the natural gas supply from the Azerbaijan –Turkey (Shah Deniz) Natural Gas Pipeline started transmission.

The Turkey-Greece pipeline project, the first ring of South European gas ring, is completed. According to the agreement, the initial volume delivered by the line will be 0.75 bcm per year (to Greece only), but it is expected to increase to 11 bcm/year in 2012, of which 8 bcm/year to Italy and the rest to Greece. In this way, the interconnection of Turkish natural Gas transmission networks with the infrastructure of neighbour countries is realized. Turkey is an important bridge supplier in natural gas. With the inauguration of a Greece-Italy connection in 2013, the Italian market will have the opportunity to access the Caspian gas.

Turkey is expected to become an important trade and transit center for natural gas exports. The following and other international pipeline projects have been discussed in this context:

Natural gas could be transported from Turkey to Central and Western Europe via Bulgaria, Romania, Hungary, and Austria (the Nabucco Pipeline Project). The Cooperation Agreement for the Nabucco Gas Pipeline Project was signed among the associated companies of the respective countries in 2002. The ~3281 km main and feeder pipeline system will ultimately transport up to 25.5 (Base Case) to 31 bcm/year (High Case) of natural gas from the eastern borders of Turkey (from the sources of the Caspian Region/Central Asia and the Middle East) through the transit countries and Baumgarten Hub Point in Austria for onward transmission to the German border. This project is also one of the most important stages of Turkish East- West Energy Corridor & Hub strategy. The pipeline operation is planned to be commenced in 2013 with start up capacity of 8.5 bcm/year

Pipeline Projects in Turkey

• Baku Tblisi Ceyhan Oil Pipeline (June 3, 2006)
• Turkish Straits “By Pass” Oil P/Ls
• Kirkuk – Yumurtalik Oil P/L (existing; interrupted)
• Russsia – Turkey (West Gas P/L)
• Blue Stream Gas P/L
• Turkey - Greece Gas P/L
• Trans Caspian Turkmen Gas P/L
• Shah Deniz Gas P/L (2006 – 2007)
• Iran – Turkey Gas P/L (10 bcm)
• Iraq – Turkey Gas P/L (10 bcm)
• Egypt – Turkey Gas P/L (4 - 8 bcm)
• Turkey-Bulgaria-Romania-Hungary-Austria Gas P/L (Nabucco Project)
• Blue Stream Expansion to Israel (Gas)

Coal & lignite

Structure of the sector

In Turkey, hard coal, lignite and asphaltite are domestically produced for consumption. The state is the largest producer of coal in Turkey. Virtually all hard coal reserves and three-quarters of lignite reserves are under the control of government. Until 1957 all lignite and hard coal was produced by the Turkish Lignite Enterprise (TKI) which is a state economic enterprise (SEE). In 1983, hard coal production was given to the Turkish Hard coal Enterprise (TTK) and lignite and asphaltite production was kept in TKI. TKI produces more than half of lignite in Turkey for some power plants, residential heating and industry while private sector produces some 10% of total. In addition, Turkey's Electricity Generating Corporation (EUAS) produces lignite for three power plants.

Production, consumption and import

Proven and probable reserves were approximately as of 2007 9.4 billion tons of lignite and 1.3 tons of hard coal. The largest hard coal reserves of Turkey is in Zonguldak basins which is the area on the coast of Black Sea between Eregli and Amasra. It is observed that, due to some technical and economic problems, hard coal production has started to decline since mid of 1980’s. It decreased from 2.7 million tons in 1997 to 2.3 million tons in 2006. In the same year 20 million tons hard coal have been imported .Hard coal was imported mostly to supply the requirements of the industrial sector. About 28 % of the imported coal was consumed in iron and steel sectors.

Lignite which is one of the most important domestic resources of the country has large and widespread deposits, mainly in Afsin-Elbistan, Mugla, Soma, Tunçbilek, Konya, Beypazari and Sivas regions. Calorific value of the remaining reserves are: 68 % 800-2000 kcal/kg; 23.5% 2000-3000 kcal/kg; 5.1% 3000-4000kcal/kg and 3.4% 4000 kcal/kg and over. About 90% of the lignite is produced by opencast mining, while the remaining part is produced by underground mining. Almost all its produced coal is used in thermal plants for electricity generation. Total coal production has got a share of 49% in primary energy production in 2006 . The government has been encouraging domestic coal production as important indigenous source of the country for reliable energy supply.

Coal which is a major fuel source for Turkey is used primarily for power generation, steel manufacturing, and cement production. In 1960’s transport and residential sectors together made up about 40% of coal use in Turkey. Use of coal started to decline dramatically first in transport (almost all in railways) in mid 1970s and then in residential in 1990s. Currently, power generation and industry make up 90% of total coal consumption. Though in the future it is expected coal use increase in absolute terms, its share will continue declining, as much as 6% by 2030. By then power generation will account for two-thirds total coal consumption in Turkey, followed by industry. Even though coal production will increase in Turkey significantly in the next two decades, domestic production will not be able to satisfy demand. As is the case today, majority of the coal demand will be satisfied by imports.

Renewable energy

The Ministry of Energy and Natural Resources is the responsible body for policy making, and its General Directorate of Electrical Power Resources Survey and Development Administration (EIE) is in charge of the promotion and research in the field of renewable energy sources. The Energy Market Regulatory Authority (EMRA) is the competent authority for regulating the market and for licensing.
Turkey is endowed with a significant amount of renewable energy sources (hydro, wind, geothermal, solar power and biomass) potential. Renewables are the second largest domestic sources for energy production after coal. In 2006, the energy produced from renewable sources has reached to the amount of more than 10,8 Mtoe which is 11% (in 2007 %10.2) of the total primary energy sources.
Renewable energy supply in Turkey is dominated by hydropower and biomass. More than two thirds of renewable energy supply is biomass, mostly wood and animal wastes that are almost exclusively non-commercial fuels. They are mainly used in the residential sector for heating. The remaining one-third of renewable energy supply is predominantly hydro-power. The contribution of wind and solar is limited but expected to increase rapidly. The large potential of Turkey for geothermal, wind and solar have not been systematically developed until recently. In 2007, their combined share in TPES was only 1.5 %

Renewable sources

Hydro

The economically usable hydropower potential of Turkey is determined as 130,000 GWh per year (estimated approx.180.000 GWh including small hydro), of which 35% has been exploited. 9% of the potential is under constraction and the rest (56%) is at project level. Installed capacity of hydroelectric plants in Turkey stood at 13,393 MW at the end of 2007. It is projected that hydroelectric power plant capacity will be reached to 35000 MW by the year 2020. Unused potential consists of many small hydro projects and the small hydro projects have been one of the most attractive options for private investors in Turkey.

Wind

Turkey has considerable wind energy potential. Studies that were carried out for harnessing wind energy were initially focused on the identification of wind energy potential. According to these studies the potential for wind power is especially high on the west coast and in the south-eastern Anatolia.
The Turkish Wind Energy Potential Atlas was developed in 2007. It has been calculated that wind power plants operating at an installed capacity of 5000 MW can be installed where the annual wind speed is higher than 8,5 m/s. Further 48000 MW can be installed where the annual wind speed is higher than 7,0 m/s. Today installed windpower capacity in Turkey has reached from 20 MW to 200 MW and 600 MW under construction. Additionally, new applications, nearly 85000 MW, applied for the construction license and 2126 MW of these applications are already granted a license.

Solar

Turkey is located in a relatively advantageous geographical position. The solar energy potential evaluations made by EIE, based on the data measured by the State Meteorological Services during 1966-1982 revealed an annual average total sunlight period of 2640 hours (daily total 7.2 hours) and an average annual solar radiation of 1311 kWh/m²-year (3.6 kWh/m²-day).

Geothermal

Biomass

Turkey’s main biomass sources are agricultural, forestry, animal and organic wastes. Biomass potential is 8,6 million TOE and the amount of 6 million of this potential is being used. Biogas production potential has been estimated at some 2 Mtoe. Biodiesel production capacity is 1.5 Mt and Bioethanol production capacity is about 3 Mt per year. The 2015 biofuel production targets are 1.250.000 tonnes biodiesel ve 735.000 tonnes bioethanol.

Support Mechanisms and feed-in conditions for electricity from renewable energy sources

In accordance with the EML No. 4628, with respect to the renewable energy sources, Energy Market Regulatory Board "shall take necessary measures to promote electricity production from renewable and domestic energy sources due to environmental effects and take action on behalf of the relevant agencies for the implementation of the relevant incentives.'"
The Law No. 5346 on the Use of Renewable Energy Resources for Electricity Production Purposes (May 18, 2005) was enacted.The purpose of this Law is to ensure the widespread use of renewable energy sources for electricity production, utilization of these sources in a reliable, economic and qualified manner, increase in resource diversification, reduction of greenhouse gas emissions, recovery of wastes, protection of the environment and development of the relevant manufacturing sector to achieve these goals.
Renewable energy resources (RES) covered within the scope of this Law are; wind, solar, geothermal, biomass, biogas, wave, and tidal energy resources suitable for the electricity generation together with hydraulic generation plants, either canal or run of river type or with a reservoir area of less than fifteen square kilometres.
The statement of "real and legal entities establishing electricity generation plant and micro-cogeneration plant using renewable energy sources with a maximum installed capacity of 200 kW to meet only their own demands shall be exempt from obligations of obtaining license and establishing a company" is added to the end of the Article 3 of Law No. 4628 by Article 15 of Energy Efficiency Law No. 5627 published in the Official Gazette No. 26510 of 2 May 2005.

Within this framework, no license will be required for the plants with a maximum production capacity of 200 kW (this threshold is increased in 2008 to 500 MW with new Law) from renewable energy sources to meet only their own demands. This provision will make things easier, particularly for small producers.
The existing legislations regulation provides following incentives for RES generation facilities:

• Legal entities that apply to obtain a license for the establishment of generation plants producing energy from renewable energy sources shall pay 1 percent of the total licensing fee and shall be exempt from annual license fees for the first eight years following plant completion date as stated in the relevant licenses.
• Legal entities that apply to obtain a license for the establishment of generation plants producing energy from renewable energy sources shall be allowed to purchase electricity from private sector wholesale companies on condition that the annual amount of production does not exceed the amount projected in their licenses within a calendar year.
• In the event that the price for electricity produced from renewable energy sources is below or equal to that of the Turkish Energy Trading and Contracting Company (TETAS) or there is no other supplier with lower prices, legal entities holding a retail sales license shall be obliged to give priority to generation plants producing electricity from renewable energy sources to purchase electricity.
• Turkish Electricity Transmission Company and/or legal entities with a distribution license shall give priority to system connection of generation plants producing energy from local natural resources and renewable energy sources.
• Within the scope of the RE Law, a feed-in system combined with purchase requirement for electricity produced from renewable energy sources by legal entities holding electricity generation license and RES Certificate is developed and upper and lower limits are put on purchase price for electricity produced from renewable energy sources. (However, no differentiation has been made between purchase prices of RES technologies.) Feed-in tariff is valid for the first ten years of the plants that are put into operation before 31 December 2011. The period shall be extended by the Council of Ministers for a maximum of two years. Purchase guarantee for a price that will not be below Turkish Lira corresponding to at least 5 Euro Cent/kWh during 10 years.
  However in accordance to the Balancing and Settlement Regulation, renewable energy producers has been preferred to sell their electricity to the open market(which is 13 % of total electricity market as kwh base) with more attractive prices. Because of high electricity demand in the market and difficulties for meeting this demand time to time, made the prices increased in spot energy market.
• EMRA shall grant a “RES Certificate” (Guarantee of Origin) for identification and monitoring of the resource type in purchasing and selling of electricity generated from RES in the domestic and international markets, to the legal entity holding generating license.
• Priority on allocations of treasury and forestry lands and in allocations of forestry lands, a discount in the rate of 85 %t is applied in the costs of license, rent, servitude right and use permit during the first 10 years of the investment and operating periods of such plants. In the forestry lands, ORKÖY and Afforestation Special Appropriation Revenues are not collected.
• Res incentive mechanism is enhanced with the energy efficiency law. In decreasing energy intensity, use of RES will be incentivized in industrial establishments. 20% of energy cost of industrial facilities belonging to the last year of the voluntary agreement between the real persons and legal entities, who signed voluntary agreement by government and fulfilled their commitments on decreasing energy intensity at least at the ratio of 10% in any facilities within 3 years, shall be paid. Energy generated from RES, by entities, who have signed voluntary agreement or energy generated in cogeneration plants consumed , shall not be included in the calculation of energy intensity.
• TUBITAK (Turkish Research Institute) shall support research and development projects for improving energy efficiency, utilizing new and renewable energy resources prior.
  Ethanol and bio-diesel produced artificially from domestic agricultural can be blended with liquid fuel and amount of 2 % is exempt from special Tax by Biofuel Incentive Decision of The Council of Ministers.

Explanation on Feed in tariff

Within the scope of RE Law, a feed-in system combined with a purchase requirement for electricity produced from renewable energy sources by legal entities holding electricity generation license and RES Certificate is developed and upper and lower limits are put on purchase price for electricity produced from renewable energy sources. However, no differentiation has been made between purchase prices of RES technologies. Feed-in tariff is valid for the first ten years of the plants that are put into operation before 31 December 2011. The period shall be extended by the Council of Ministers for a maximum of two years. Legal entities holding retail sale license who violate the relevant provisions of Article 6 entitled "principles of implementation" shall be charged a penalty. There are also some other incentives for investments on renewable energy sources and for land on which such plants will be constructed.
Relevant Articles of this Law are as follows:
Article 6. (Amendment: 18.4.2007 - 5627/17 art.) Legal entities holding licenses to produce and trade electricity from renewable energy sources within the scope of this Law shall be subject to the principles of implementation specified hereunder:
a) Legal entities holding a retail sale license shall purchase electricity from RES certified plants producing electricity from renewable energy sources within the scope of this Law and operating for ten years in accordance with the principles of this Article.
b) The relevant information on the amount of RES certified electricity utilizing the implementations within the scope of this Law shall be published annually by Energy Market Regulatory Authority (EMRA). Each legal entity holding a retail sale license shall purchase RES certified electricity on the basis of the proportion of energy amount sold within the pervious calendar year to the total electricity amount sold by all legal entities holding a retail sales license in Turkey.
c) The applicable price for electricity to be purchased in accordance with this Law within each calendar year shall be the Turkish average wholesale electricity price in the previous year determined by EMRA. This price, however, may not be less then the Turkish Lira equivalent of 5 euro ct/kWh and may not exceed the Turkish Lira equivalent of 5.5 euro ct/kWh. Legal entities holding a license based on renewable energy sources, on the other hand, shall be allowed to sell electricity above the limit of 5.5 euro ct/kWh in the market.
Implementations within the scope of this Article shall cover the plants put into operation before 31 December 2011. This period shall be extended by the Council of Ministers for a maximum of two years on condition that such extension is published in the Official Gazette until 31 December 2009.