Saturday, December 09, 2017
Total
installed power in our country is 82GWe by the end of 2017. We
expected that the share of renewable energy plants in total
production would increase over time. The share of imported and fossil
fuels would decrease, and the import and fossil fuel dependency would
decrease. That was not so.
It
is estimated that the total installed capacity of solar power
generating power plants will reach 2400 MWe by the end of 2017. Total
licensed Solar projects during the year was 52 MW.
This
amount could be taken into operation as 13 MW, the remaining are on
hold. Non-Licensed projects are too many in numbers, whereas the
licensed projects are very few. We have made the license procedures
so hard that nobody wants licensed business. The investors prefer
that it is better to form dozens or even hundreds of companies each
with 1-MWe capacities and connect them.
Solar
investment costs are now very low. In 2005, incentives were
introduced by Law No. 5346. Guaranteed sale prices then were at
5.00-5.50 EuroCent per KWhour in 2005, while it is at $Cent 13.30
per KWhour in 2010. Solar maps were released. Transmission capacities
were determined. In 2014-2015, 6 different tenders were released and
600 MW new solar capacity was created. In year 2017, a new Solar
capacity of 1000 MWe was created through the competitive renewables
tender.
Solar
cells and panel prices have been excessive cheaper. in time. By the
end of 2017, 24-25 $ Cent per Wp prices were received. Import
incentives given by the Ministry of Economy to Solar panel imports in
2012 were deleted in 2016. In 2016, domestic production could be
replied in the amount demanded by the internal market. With Anti
Dumping and additional VAT application, foreign panel import prices
have reached to 60 $ Cent per Wp level. Then Domestic producers have
increased their prices to 50 $ Cent per Wp to take advantage of the
market prices.
In
2014-2015, transmission authority opened 6 tenders and allocated
Solar projects to 49 companies with a total capacity of 600MW.
Companies have committed to pay TL 1.23 billion of contribution to
the allocation. The two companies have completed their operations and
have been operating the Solar investments at a capacity of 13 MW. The
other companies received the incentive certificates at a capacity of
120 MW, but due to cost increases, the remaining 480 MW capacity
projects were locked and are on hold. Because the conditions before
the tender were changed after the tender. Initially there was
incentives, then incentives were unfairly removed.
In
2010, the new renewables law set the electricity purchase price for
Solar investments as 13.30 $Cents per KWh for 10 years.
The
winner of the 1000 MWe renewable Solar bid in 2017 reduced this price
to 6.99 $Cent per KWh.
The
winning group accepted local investment for 500 MWe per yr production
capacity and 500 million US$ investment- budgeted production facility
in the country.
On
the other hand, in 2017 we observed similar tenders abroad.
In
Saudi Arabia, the price is 1.79 $cents per KWh, in Germany 4.30
EuroCent, 2.10 $Cents in Chile and 1.77 $cents in Mexico. We are
observing big discounts on Solar tenders. However, the Ministry of
Economy tax collection efforts deter our investors.
On
the other hand, we have gone so difficult as to license the work,
that everyone is trying to invest under unlicensed 1-MW projects. In
2005, unit MW cost Solar investment was 4,000 US Dollars, while in
2017 Solar investment cost per unit KW decreased to 700-800 US
Dollars. In 2017, market observes only 13 MW licensed Solar, whereas
unlicensed Solar at 2400 MW. Public regulatory authorities were a bit
indifferent at the beginning. But when they enter the system, the
investor feels to regret their applications.
For
example, they may ask to use 50% of the electricity produced in
investors auto consumption. Continuous storage may be required. They
may limit the possession of company shares.
Solar
sector currently employs around 20-thousand workers. Currently, 26
different enterprises assemble with Solar PV panels. The majority of
fabricators are undergoing simple construction, cabling, framing
work, whereas 75-80% of total investment is still imported. The
actual production renewable coverage will be made at the last 1000
MW renewable facilities. Others will finish their work in their hands
and close their businesses. Then 20-thousand people could be
unemployed.
On
the other hand, in the recent Solar facilities in operation,
installed power loss is observed to be 20-25% within a few months.
At
home scale Roof-top Solar installation should be well examined. House
sizes are limited to 10kW capacity, that is not feasible. On top roof
of existing structures, an additional load of 25 kg per square meter
is to be added. The current roof structures are not enough to carry
this additional load. The duration of use of summer houses are 3-4
months, and the roof Solar investment return is not enough for this
period. Billing is difficult to deduct. There is a high risk of fire,
so insurance coverage is difficult.
There
are those who bring the fertile agricultural land to the barren land
by saying that they will build a solar energy plant. Let them God to
show them the right way.
There
are three different associations in the local Solar market, GÜNDER,
GENSED, GÜYAD. Why are there three separate associations? Why is not
there one single association to cover all interest groups? This is
another important question.
We
started with good intentions, but we have a lot of work to do.
---
Haluk
Direskeneli, is a graduate of METU Mechanical Engineering department
(1973). He worked in public, private enterprises, USA Turkish JV
companies (B&W, CSWI, AEP), in fabrication, basic and detail
design, marketing, sales and project management of thermal power
plants. He is currently working as freelance consultant/ energy
analyst with thermal power plants basic/ detail design software
expertise for private engineering companies, investors, universities
and research institutions. He is a member of ODTÜ Alumni and Chamber
of Turkish Mechanical Engineers Energy Working Group.
This
article is written for the "EurasiaReview" news web site.
http://www.eurasiareview.com/author/haluk-direskeneli/
Ankara,
10 December 2017
Monday, December 04, 2017
TURKEY: Energy & Infrastructure Forecast 2018
Risks
and Opportunities
Economies
and businesses are always shaped by expectations, just as market
expectations are important in economic forecasts themselves. Within
our professional capacity, we have tried to outline a draft forecast
for the upcoming days. While it may not necessarily foresee the
future in all its detail, it is better to have one, rather than none.
Here are our short term new year predictions:
Energy
supply security is within our prime concerns. Our installed capacity
has reached to 82 GWe, and peak demand at 45 GWe in August 2017. Our
local lignite production was about 50+ million metric tons in 2017.
Hard coal production was 2 million metric tons. Imported hard coal
was 30 million metric tons.
Earlier, S&P and then
Moody's rating agencies have lowered our financial credibility to
junk level, the other international rating agency (Fitch) is clever
to postpone their Turkish ratings, however we all know that their
late declaration is also meaning low rating for our investment
environment. Rating agencies ask for transparency, rule of law, fair
competition in our local market.
European Union has frozen
accession meetings completely for participation since all remedy
requests are returned with futile responses. Luxemburg, Germany,
Austria, Sweden, Denmark have already voiced necessary applicable
counter measures. Death penalty, unavoidable bribery and public
corruption, sexual abuse under 15 are unacceptable for Europeans.
The
recent tax as imposed on imported coal was a deterrent figure for
future investments for imported coal firing thermal power plants.
Anyhow the latest thermal power plants are exclusively built by
Chinese companies due to their ultra low lump sum turnkey prices,
covered by cheap PBoC project financing. However these plants have
poor design, they have low spares, short life span. If you
desperately need electricity generation, then price is not so
important. The tax will be collected by our Treasury, and end price
is also taxed so our Treasury will get all money from both ends, all
other parties are intermediaries in the long run.
On
the other hand, 5-6 US cents per kwh electricity purchase guarantee
by public enterprises for local coal firing energy generation is a
good booster for newcomer investors. However it is not so pleasing to
place power plant construction orders to Chinese contractors just
because of their ultra cheap turnkey prices for new local coal firing
thermal power plant investments. These plants do not meet national
standard, norms, rules, regulations, laws. They have poor design
which are not applicable for local coal, they have limited or
almost no spares and high breakdown, low availability and low life
span during operation.
New
tenders for local coal firing thermal power plants are in Cayirhan-2,
Eskişehir Alpu, Konya Karaman, Trakya Saray. Soma and Çan thermal
power plant investment projects are ongoing. Local people are not so
comfortable with new local coal investments. There will be growing
public reactions expected to stop these investments.
There
are still imported coal firing investment projects in Çanakkale,
Aliağa, Amasra, Iskenderun bay although imported coal is not
encouraged any more..
On
the other hand, 1000 MWe each wind and solar tenders were completed.
We expect to have more of these investments in future.
Common
consensus as created by independent foreign military commentators
openly and frankly say that USA (and Nato forces) should leave
Incirlik air base for the long term and they should move to
relatively more secure or tranquil place such as Southern Cyprus,
Northern Iraq, wherever they would feel more comfortable, more
independent, more free to maneuver in the Middle East. USA will
follow their indifference policy towards international events due to
transfer of power after US Presidential elections.
On
negotiation table behind closed doors in Moscow and Ankara (and
Sochi), there were negotiations for new prices on natural gas sales,
more concessions on 63 bcm capacity Turkish Stream underwater
pipeline construction project and better terms for 4800 MWe nuclear
contract etc. We should note that in the long term Mersin Akkuyu
nuclear project may also serve as a new Russian military seaport on
Mediterranean coast to reinforce Russian presence on hot seas.
Arab countries are
completely ignorant of the events which took place at our environment
since they have worse incidents they face every day. We have good
deals with Iran due to our favorable gas purchase agreements. However
due to their increased internal gas demand, they stopped sending gas
to our system as of December. We have gas supply and energy
generation drop in our energy markets.
National
Security is to be reinforced since SouthEast insurgency may get
worse. As seen everywhere in the world, such as in Ireland, Scotland,
Bask in Spain, if minorities are not fairly represented in the
national parliament, then they may look for their alternative
solutions.
Bankruptcy
postponement epidemic in the local markets spreads to low capital-
small companies. that will be a high impact on our economy despite of
unrealistic pictures as pronounced by public officials. People has
lost confidence to public declarations. Foreign exchange rates may
dive low in time.
There
is a wide range consensus for low profile public appearance. People
deactivate their accounts in social media. They are not interested in
any public expression. Newspaper columns are repetition of earlier
articles. People are indifferent to every event since so many nasty
things have happened in the near past with no reasoning no meaning we
can name. Immigration applications among academics and young
professionals are on high rise. Similarly capital move from local to
international markets are getting increased.
We
believe that these are a few warning indicators, of which you will
seldom read such candid forecast from a local source for our home
environment anywhere else. We
would be pleased to receive your comments and feedback over the
course of the upcoming year.
Happy
New Year and Merry Christmas to you all !!
---
Haluk
Direskeneli, is a graduate of METU Mechanical Engineering department
(1973). He worked in public, private enterprises, USA Turkish JV
companies (B&W, CSWI, AEP), in fabrication, basic and detail
design, marketing, sales and project management of thermal power
plants. He is currently working as freelance consultant/ energy
analyst with thermal power plants basic/ detail design software
expertise for private engineering companies, investors, universities
and research institutions. He is a member of ODTÜ Alumni and Chamber
of Turkish Mechanical Engineers Energy Working Group.
This
article is written for the "EurasiaReview" news web site.
http://www.eurasiareview.com/author/haluk-direskeneli/
Ankara,
04 December, 2017