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Renewable Energy Law in Turkey - Canberk Taze

Renewable energy is the energy that is produced from sources that are not exhaustive and can be replenished, such as wind, solar, geothermal, or hydropower. According to Mete and Heffron, renewable energy can be examined under Energy Law and the triangle of energy financing, energy security, and environment. Turkey is a country that has high import dependency; therefore, it has led Turkey to pursue a diversification policy of energy sources. Even though Turkey has a strong potential for wind, solar, and hydropower, Turkey uses fossil fuels, and in particular, natural gas.

The primary legislation governing renewable energy in Turkey is Law No. 5346 on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy. On the energy financing side, some incentives are being provided by the Ministry of Economy. E.g., only 10% of the electricity generation license fee is charged on companies that meet the requirements of the Renewable Energy Support Mechanism; further, they are exempt from the annual license fee for eight years after they have started generating electricity. There are also tax incentives that are provided to the companies. For example, there is a VAT exemption for the purchase or imports of equipment, a customs duty exemption for the equipment, and exclusion from other funds and charges. Further, according to Law No. 6446, documents and transactions related to power plants are exempt from stamp tax and duties related to it. The undertakings that meet the requirement of the Renewable Energy Support Mechanism are also granted a 10-year purchase guarantee in the amount determined by the Energy Market Regulatory Authority, with the minimum amount being 8%. Also, for the first ten years of their operations, as an incentive, there are high tariffs set out as the minimum price per MWh for hydro, wind, geothermal, and solar energy. There are even additional incentives if the companies use local equipment to generate these energies. Lastly, in the context of financing, there is a regulation named Law No. 5627 on Energy Efficiency that published Energy Efficiency Strategy Paper for years between 2012-2023 and takes the appropriate measures for the efficient use of energy in every sector.

To prevent climate change, a Climate Change Action Plan has been published that set out objectives to be achieved by the year 2023. Its goals are to limit and control greenhouse gas emissions and providing resources for the development of cleaner energy efficiency technologies. Furthermore, concerning the United Nations Framework Convention on Climate Change (UNFCCC), Turkey has promised to take the necessary steps for promoting renewable energy, while reducing their greenhouse gas emissions. Turkey is also a founding member of the International Renewable Energy Agency. Whether the required actions have been taken by now in regards to all the promises that were made is up to debate. According to the Fourth Biennial Report of Turkey, dated 2019 December, Turkey’s Greenhouse Gas Emissions have increased more than 30% between 2010-2017, which accelerated between 2015-2017.

However, Turkey is making the necessary investments for its hydropower; its geothermal potential is highest in Europe and seventh in the world. However, there is only 71MW of solar capacity in Turkey, necessary steps are being taken to reach a total capacity of 600 MW. There is also talks about building the world’s largest solar plants in the south of Turkey that could have a capacity of 3-4 GW’s. Furthermore, according to the Minister of Energy, Turkey needs to invest 12 billion USD in the renewable energy sector in the short term. And according to the World Bank, the investment required for the long run could go as high as around 130 billion USD. This kind of investment can be harder to get overtime if the country’s economy does not go into a boom in the upcoming years, making it more attractive and risk-free for potential investors.

In conclusion, Turkey has regulated the necessary incentives and created a chance for a competitive market to be established and for the required investments to be made to renewable energy establishments in Turkey. However, the country is still not making the radical changes to its energy policy required for it to take down its Greenhouse Gas Emissions in the short time it has left and lastly, there need to be swift changes in Turkey’s economy for it to become a hot spot for investors in the years to come for it to have a hope in reaching its goals and making the world a better place to live in.

For more information, check out Gokce Mete and Raphael Heffron’s “Renewable Energy Law and Policy in Turkey”!


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