**3. Recent developments in renewable energy policy and regulations**

Although, The Renewable Energy Law and its subsequent amendments are the main pieces of legislation supporting the development of renewable energy, The Electricity Market Law and the Energy Efficiency Law are also major relevant pieces of the Legislation. Together with these Laws, related secondary legislation, regulations and supporting regulations, like Electricity Market Licensing Regulation, set the legal framework for promoting electricity generation from renewables and including main instruments. They offer some advantages like feed-in tariff and purchase obligations, connection priority, reduced license fees, exemption from license and company establishment obligations for the plants with a

Fig. 8. Evolution of Turkey's electricity generation by fuels (IEA, 2009).

for decision makers of the Country (Saygn & Çetin, 2010).

related with energy supply security[(Saygn & Çetin, 2010).

Environmental and energy security risks are therefore more and more increasing for the Country. The energy situation of Turkey is characterized by high rate of import dependence, high energy intensity, rapidly rising greenhouse gas emissions. This situation is evidently unsustainable and in conflict with the contemporary global trends. Turkey is faced with serious environmental and energy security challenges presently. Additionally, it needs for high amounts of financial resources for energy investment to meet growing energy demand. Limitations within the scope of harmonization with the EU cause the cost of energy investments to rise and complicate the situation further*.* All of these are matters of concern

It is clear that, the existing renewable energy potential should be realized in a reasonable time period. To realize renewable potential, Turkey has taken some steps in the right direction. Although it has been made important progress with regard to renewable energy, energy efficiency and market liberalization regulations in the recent years; new paradigm is slowly diffusing into Turkey's energy policies and the regulations due to strong concerns

Although, The Renewable Energy Law and its subsequent amendments are the main pieces of legislation supporting the development of renewable energy, The Electricity Market Law and the Energy Efficiency Law are also major relevant pieces of the Legislation. Together with these Laws, related secondary legislation, regulations and supporting regulations, like Electricity Market Licensing Regulation, set the legal framework for promoting electricity generation from renewables and including main instruments. They offer some advantages like feed-in tariff and purchase obligations, connection priority, reduced license fees, exemption from license and company establishment obligations for the plants with a

**3. Recent developments in renewable energy policy and regulations** 


maximum capacity of 500 kW, reduced land use fees or free land use. (EUMS, 2009)**.** The Turkey**'s** legislation on renewable energy established within the last decade (Table 1).

Table 1. Renewable energy -related legislation (Çetin, 2010).

The Electricity Market Law and Electricity Market Licensing Regulation entered into force in 2001 and 2002, respectively, also set forth a number of pro-renewables provisions (TR, 2001; TR,2002). Turkey enacted its first law specific to renewable energy, the Law on the Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy (the Renewable Energy Law) with No. 5346, on 18 May 2005 (TR, 2005)**.** This was a key step for strengthening the country's renewable energy sector. According to this Law, the legal entity holding generation license shall be granted by EMRA with a "Renewable Energy Resource Certificate" (RES Certificate) for the purpose of identification and monitoring of the resource type in purchasing and sale of the electrical energy generated from renewable energy resources in the domestic and international markets. This Law provides feed in tariff until 2011, purchase guarantee. In addition, State territories are permitted on the basis of its sale price, rented, given right of access or usage permission by Ministry of Environment and Forestry or Ministry of Finance. Fifty percent deduction is implemented for permission, rent, and right of access and usage permission in the investment period. Following the enactment of the first Renewable Energy Law, investors showed an increasing interest in Renewables, especially in relation to the generation of electricity through hydro plants and wind farms (Saygn & Çetin, 2010). However, the interest in renewable energy projects was hindered by the lenders' reluctance because of the uncertainty in the purchase guarantees. As a result, the government introduced an important series of amendments in 2007 and 2008(TR, 2007; TR, 2008). The amendment to the Law in May 2007 secured a constant purchase price for all types of renewable sources (Saygn& Cetin, 2010). Together with the Amendment in 2008 entered into force following incentives are offered by Renewable Energy Law to promote renewable energy (TR,2008; EUMS, 2009; Gümüş, 2011; Kolcuoğlu, 2011).

For Renewable Power Plants (PPs) in operation for not longer than 10 years:



During the first 10 years of operation, an 85% deduction is applied to fees related to permission, rent, and right of access and usage permission over the investment and operation period, in the event of the use of the property under the possession of the General Directorate of Forestry or the Treasury.

85% deduction is applied to fees related to investments in the transportation infrastructure and power lines until the connection point to the grid.

Exemption from the special fees charged to contribute to the development of woodland villages, promotion of forestation and erosion mitigation.

Free use of state-owned estates located within the reservoir of Hydroelectric Power Plants holding a RES Certificate.

Following the enactment of the Amended Renewable Energy Law in 2007, investor interest in the renewable energy sector has risen distinctively, and a significant progress has been made. The efforts successfully resulted in an appreciable increase in the share of renewables excluding large- hydro in total especially in the wind and geothermal capacities, as seen from Figure 9.

Despite this hopeful development in hydro, wind and geothermal energy, solar capacity has not developed and clearly needs further promotion. By this aim, a New Amendment to Renewable Energy Law was supposed, therefore, to the National General Assembly on June, 2009. It was suspended until recently since it would create an extra burden on the treasury (Saygn & Çetin, 2010).


Table 2. Turkey's installed capacity and power generation by fuel (Çetin, 2010).

By 2009, renewable sources provided 37.8 TWh of electricity, or 19.6% of the total power generation in Turkey. Hydropower accounted for 95 % (35.9 TWh) of this total, wind power for 4 % (1.5 TWh), biomass and geothermal for %1 (0.5 TWh). The Country is the 12th highest share among the 28 IEA countries (IEA, 2009).


During the first 10 years of operation, an 85% deduction is applied to fees related to permission, rent, and right of access and usage permission over the investment and operation period, in the event of the use of the property under the possession of the General

85% deduction is applied to fees related to investments in the transportation infrastructure

Exemption from the special fees charged to contribute to the development of woodland

Free use of state-owned estates located within the reservoir of Hydroelectric Power Plants

Following the enactment of the Amended Renewable Energy Law in 2007, investor interest in the renewable energy sector has risen distinctively, and a significant progress has been made. The efforts successfully resulted in an appreciable increase in the share of renewables excluding large- hydro in total especially in the wind and geothermal capacities, as seen

Despite this hopeful development in hydro, wind and geothermal energy, solar capacity has not developed and clearly needs further promotion. By this aim, a New Amendment to Renewable Energy Law was supposed, therefore, to the National General Assembly on June, 2009. It was suspended until recently since it would create an extra burden on the treasury

**[TWh] Share, % Capacity,** 

**Natural gas** 94.4 48.6 16 345.2 19.4 **Domestic Coal** 42.2 21.7 8 691.3 19.4 **İmported Coal** 12.8 6.6 1 921. 4.3 **Hydropower** 35.9 18.5 14 553.4 32.5

**(Oil)** 6.6 3.4 2309.7 5.2

**TOTAL** 194.1 100 44 782 100

By 2009, renewable sources provided 37.8 TWh of electricity, or 19.6% of the total power generation in Turkey. Hydropower accounted for 95 % (35.9 TWh) of this total, wind power for 4 % (1.5 TWh), biomass and geothermal for %1 (0.5 TWh). The Country is the 12th highest

Table 2. Turkey's installed capacity and power generation by fuel (Çetin, 2010).

2.2 1.1 961.2 2.1

**{MW]** 

**Share, %** 

their domestic market share.

Directorate of Forestry or the Treasury.

holding a RES Certificate.

from Figure 9.

(Saygn & Çetin, 2010).

**Liquid fuels** 

**Wind & Geothermal, Biogas** 

**Energy source Generation.** 

share among the 28 IEA countries (IEA, 2009).

and power lines until the connection point to the grid.

villages, promotion of forestation and erosion mitigation.

Fig. 9. In Turkey, evaluation of a) installed wind power capacity, b) installed geothermal capacity, c) the share of renewables excluding large- hydro ( MENR, 2010).

A total of 601 renewable projects with a capacity of 15500 MW had been licensed by 2009(Saygn & Çetin, 2010) .This number has reached to 645 by 2010. The number of licensed power plants according to energy sources is given in the Figure 10

Fig. 10. Number of the power plants licensed by 2010, total 645(Çetin, 2010).

As can be seen from this figure, Hydroelectric, and wind power plant hopefully left behind the others. This implies promotion policy for renewable energy started to be effective. Despite these progressive steps forward, most of the huge renewable potential of Turkey has not been used yet, as can be seen from Figure 11.

Fig. 11. Utilization Rates of Renewable Energy Potential in Turkey[6]

On 29 December 2010, the Turkish Parliament finally passed this Amendment Law upgrading and differentiating feed-in tariff structure with regards to sources. As seen from the Table 3, the Law guarantees prices of 7.3 US cents per kilowatt-hour for hydroelectric and wind, a price of 10.5 US cents for geothermal energy. a price of 13.3 US cents for solar energy as well as waste products (such as biomass or municipal solid

Fig. 10. Number of the power plants licensed by 2010, total 645(Çetin, 2010).

Fig. 11. Utilization Rates of Renewable Energy Potential in Turkey[6]

has not been used yet, as can be seen from Figure 11.

As can be seen from this figure, Hydroelectric, and wind power plant hopefully left behind the others. This implies promotion policy for renewable energy started to be effective. Despite these progressive steps forward, most of the huge renewable potential of Turkey

On 29 December 2010, the Turkish Parliament finally passed this Amendment Law upgrading and differentiating feed-in tariff structure with regards to sources. As seen from the Table 3, the Law guarantees prices of 7.3 US cents per kilowatt-hour for hydroelectric and wind, a price of 10.5 US cents for geothermal energy. a price of 13.3 US cents for solar energy as well as waste products (such as biomass or municipal solid waste-to-energy projects). As can be understood, it has been especially aimed to promote solar energy by this amendment. Under the last Amended Renewable Energy Law, individuals and legal entities generating electricity from renewable resources are able to benefit from this feed-in tariffs, provided that they allocate any excess amount of generated electricity to the national electricity distribution system. This will be applicable for a period of 10 years for generation license holders who are subject to RES support mechanism and have commenced/will commence operations between 18 May 2005 and 31 December 2015 (TR, 2010).


Table 3. Feed in Tariff for Renewables (TR, 2010).

The Law also offers add payment for components made in Turkey. If the mechanical and electro-mechanical equipment used in renewable energy facilities that have started operation before 31 December 2015 are manufactured in Turkey, an additional incentive of 0.4-2.4 USD/cent for five years will be provided. In addition EMRA will give priority to facilities generating energy from renewable resources in evaluating generation license applications. In addition, The Amendment Renewable Law offers Incentives through the Pooling of Payments: It envisages a pool managed by the Market Financial Settlement Centre (MFSC) whereby the electricity suppliers will make the payment of the renewable energy and the renewable energy generators will collect their fees (TR, 2011; Kolcuoğlu, 2011).

Other incentives provided in the legislation are as follows:


If the price of electricity generated at facilities based on RES is equal to or lower than the sales price of TETAS, the state owned wholesale company, and if there is no cheaper alternative, the retail licensees are obliged to purchase the electricity generated at facilities based on RES for the purposes of resale to non-eligible consumers.

With the passing of the amendments to the Turkish Renewable Energy Law in December 2010, more progressive development in renewable energy sector can be expected. Although none of the legislation fully met the needs of renewable energy investors – until now and the incentives provided for renewable energy investments are criticized by the investors since the feed-in tariffs are lower than expected, a certain progress have been made. The efforts made so far are hopeful; however it seems there are more steps to be taken.
